WHITE PAPERS Search White Papers by: All Functional Skills and Lines of Business Functional Skills:  --  Corporate And Business Strategy  --  Organic Revenue Growth Strategies, Value Propositions, and Pricing  --  Acquisition Support including Strategic Due Dilligence and Pre/Post Merger Integration  --  Marketing Segmentation  --  Business Product And Customer Profitability  --  Performance Measurement  --  Enterprise Risk Management  --  Joint Ventures/Outsourcing  --  Distribution Planning And Tactics  --  Customer Experience And Sales Effectiveness  --  Payments e-Commerce Strategy  --  Expense Management, Process Engineering, and Benchmarking  --  Technology Strategy and Systems Architecture  --  Organizational Design  --  Incentive Compensation Lines of Business:  --  Retail Banking  --  Credit Card  --  Payment Services  --  Mortgage Banking  --  Small Business And Commercial Banking  --  Capital Markets And Derivatives  --  Corporate Banking And Finance  --  Cash/Treasury Management  --  Insurance

To request a white paper, check the box to the left of the paper(s) that interests you, and click "Enter Your Delivery Information" at the bottom of the page. "Keep it Simple" Planning Works Best (May, 2008)   In many financial institutions, the strategic planning process gets mixed reviews at best.  In some firms, a prior attempt was so poorly received that the notion of trying again is a non-starter.  However, when we examine powerhouse financial business units that are gaining share, we inevitably find that strategic clarity and executional alignment are key underpinnings of their success. Direct Deposit Gathering for Nonbanks: It's Not Just About Price (May, 2008)   Many nonbank financial institutions are searching for funding sources with more reliable liquidity characteristics.  Some are considering entry into or expansion of direct bank deposit gathering activities as an option.  What will it take to be successful? Has your Bank "OD'd" on OD Fees?  Should your Deposit Product Line Be Redesigned? (May, 2008)   Overdraft fees have become a material source of revenue growth for many banks.  Some bankers worry they have gone too far.  This concern is warranted, and so thinking through what new approaches and decisions are called for. Some Banks Are Winning with Superior Service.  Some Are Not.  What Does it Take to Be Distinctive? (April, 2008)   Many banks have chosen a customer value proposition of "superior service" in some form.  However, many of these institutions have had disappointing results due to a lack of focus. Are There Diamonds in the Rough After the Mortgage Meltdown? (March, 2008)   Disaster will inevitably spawn rebirth and provide high return opportunities for savvy players. Focusing Payments Strategy in a Complex Environment (March, 2008)   For most regional banks, payments strategy should center on the checking account. Strategy and Execution are Powerful Stock Price Levers (January, 2008)   Banks have made various “bets” in retail distribution. Variations in strategic choices and the quality of execution have resulted in surprisingly material differences in stock price performance. How do you choose and execute well? A Shocking Tip on A/L Risk Assessment (December, 2007)   In our consulting work with treasurers and other finance and risk executives, we often uncover potentially serious flaws in A/L risk assessments.  In this white paper, we provide FMCG's viewpoint on one of them: we show that using interest rate shocks - instead of ramps - creates more accurate information for A/L risk measurement and hedging purposes. Is Your Front-Line Dancing to Music that Would Not Make the Hit Parade? (November, 2007)   Front-line incentive plans aim to drive value-creating behavior.  However, not withstanding good intentions, many cause unintended and undesirable behaviors.  Where do the problems lie and how can they be fixed? Mortgage Banking: Surviving the Shake-Out (October, 2007)   In the aftermath of the mortgage industry’s 2007 version of the Perfect Storm, even some of the largest players will be struggling to survive. Many of the “giants” have already shut, or severely restricted sub-prime, non-GSE products, third-party lending, and warehouse financing. For the vast majority of companies, “How do we survive?” is the question. Bank Retail Brokerage: Is it Time to Review Your Strategy? (September, 2007)   Management at some banks is wondering if retail brokerage is worth the effort, or worse yet, a distraction from opportunities in core banking and a source of compliance and reputation risks.  The complications are that retail investment services meet financial needs for some valuable customers, and brokerage firms are competing for more of their banking business. Technology Management: Moving to the Next Stage of Success (August, 2007)   Many senior executives feel that their IT team "doesn't get it." Such feelings are not one-sided: IT executives have frustrations in supporting business units that "don't have a clue" about being effective users.  How can this be fixed?  The key: identify and deliver on business outcomes. Winners in Same-Store Deposit Growth: What Drives Their Success? (August, 2007)   Our Street Corner Excellence award winners include some familiar names and some new ones.  They share common characteristics that drive their superior growth performance and value creation for shareholders. Improving Risk Committees Productivity and Effectiveness (July, 2007)   Our discussions with senior executives involved in risk committees often uncover their frustrations as to the time and effort spent versus value added. In this white paper, we provide FMCG’s perspectives from numerous assignments where we have helped to create more effective risk committee meetings. Beating the Odds in Bank Acquisitions: Avoiding Value Destruction in Branch Consolidations (April, 2007)   New analysis shows that the majority of branch consolidations result in a negative NPV due to customer attrition well beyond levels typically assumed. Direct Banking: Should Banks Play Offense, Defense, or Stay on the Sidelines? (March, 2007)   Could this "disruptive" business model put 30% of banks' stock price at risk?  What should your strategy be as more competitors offer high rates via this approach?  The answer depends on your bank's situation. Less Is More: Reducing Complexity Can Lower Costs and Boost Revenue Growth (December, 2006)   Striving for too many "best practices" can actually compromise revenue growth and increase cost.  Here's why. "The Relentless Margin Squeeze and Implications for Maintaining Profitability" (2006)   New techniques are needed to enable continued productivity improvement while driving revenue growth simultaneously. Goals Can Be Important Motivators, But What If They have Little Credibility? (2006)   You have taken steps to grow deposits, yet your branch network keeps missing its targets.  Meanwhile, everyone is complaining about their goals.  What went wrong and what can be done? "Keep it Simple" Strategic Planning Works Best (2006)   The essence of effective strategy is defining a value proposition for attracting and retaining customers, as well as the means to deliver that value to customers while earning an attractive ROE. Achieving Organic Growth: The Importance of Eliminating Low-Value, Costly Distractions (2006)   Making key strategy-to-execution choices correctly is the difference between strong organic growth and organizational frustration. Direct Marketing Can Support Profitable Organic Growth when Measured Using Lifetime Value (2006)   Proper measurement and use of advanced segmentation leads to competitive advantage. Small Business Banking: No Longer the Forgotten Segment (2006)   Many banks have added resources aimed at small businesses.  This investing to what we describe as Level II has often worked, but will moving to level III or IV soon be necessary? Managing Commercial Customers for High Profitability and Growth (2006)   How a relationship approach combined with customer-level and industry segment insights can win. Looking in the Rear-View Mirror? Focusing on the Wrong Road Signs? (2006)   This white paper describes an approach to tuning your performance dashboard to measures valued by shareholders and to report leading indicators of your strategy's effectiveness. Can Direct Marketing Techniques Be Effective in Originating Attractive Deposits? (2006)   Direct mail has been used for attracting low balance customers to free checking offers.  Can it be used for gaining share of higher balance customers? Capturing Share of the Affluent (2006)   New approaches to segmenting the market can improve marketing and lead to share gains. The Unintended Complexity Consequences of a Best Practices Obsession (2006)   Too much "best practices," although designed to implement top-notch functionality, processes, and procedures, can get in the way of effective frontline execution, resulting instead in subpar revenue growth, excessive cost, confused customers, and poor frontline morale. Drivers of Bank Shareholder Value and implications for Top Management's Agenda (2006)   New analysis of bank stocks highlights Revenues per Share and Same-Store Deposit Growth as key measures that drive shareholder returns, and reveals a wide variations in banks' organic growth performance. Is Your Retail Bank's Positioning Resonating with the Right Customers? (2005)   Over half of the market capitalization of many banks is retail deposits.  This is how one bank diagnosed and fixed their momentum problem. The Efficiency Ratio: Should It Be a Key Performance Metric? (2005)   Notwithstanding the emphasis of sell-side analysts, FMCG finds the efficiency ratio to be a problematic performance measure.  Over-emphasis can be counter to shareholder value. Call Centers in Retail Banking; What Balance of Priorities is Best? (2005)   Most retail banking call centers seek to minimize cost-per call and maximize cross-sales.  This paper suggests modifying this mindset to reduce costs and increase revenues. Retail Deposit Growth and Same-Store Sales Performance (Parts 1 & 2) (2005)   Retail Banking is less volatile than generally perceived.  However, market share shifts are more dramatic than previously thought.  To understand this, refinements to FDIC data are necessary to understand "retail" deposit growth trends and who is winning share on the street corner. Is Striving for More Fee Income Advantageous? (2005)   Should increasing the percent of revenues from fees be one of top management's agenda items? Risky Securitization Residuals Warrant New Management Techniques (2005)   New analysis shows how seemingly benign securitizations can deliver nasty and unanticipated write downs if not dynamically reassessed. Negotiating the Risk Mosaic (2005)   Thirty leading financial institutions from around the globe joined a study by the RMA and FMCG to agree on a useful definition for Enterprise-Wide Risk Management.  This article discusses best practices for EWRM and implementation/measurement strategies. Can Regional Banks Compete on IT? (2005)   Many banks perceive they are being outgunned in technology spending.  We find little evidence of this being the case in most core lines of business.  The key is to have a focused business strategy that guides IT investments. Market Share Mythology (2005)   There is a perception that banks with strong retail market share will enjoy superior stock price performance.  Do the facts support such assertions? Shopping to Buy a Bank? Should Your Due Diligence Be More Diligent? (2005)   Acquisition premiums are typically justified by analysis prepared by investment bankers.  However, many major deals end up destroying value.  What's the problem? Innovations in Branching: What Approaches Fit your Strategy? (2005)   Break-out competitors of all sizes are emerging in Retail Banking.  What they all share is a focused. readily perceivable value theme. Creating More Effective Risk Committee Meetings (2004)   Staffing the direct requirements of risk committees can often add 10-15 FTEs, which, given the remuneration of skilled risk staff, can be quite a cost.  Using only these five observations, financial institutions can often turn their ineffective risk committee processes around. Cross-Sell: Different Channels Require Different Techniques (2004)   Bank CEO presentations reveal that revenue growth in retail is a top priority, and that cross-sales are a critical pathway to hoped-for gains.  Will success be achieved this time? Achieving Sustained Growth in the Investment Management Business (2004)   The U.S. economy has helped mask an overall weakness in generating sustainable revenue and earnings growth among U.S. banks.  Beneath the cover of a robust economy and low loan charge-offs, many banks are feeling the pinch in profits from declines in primary business lines. Modeling Business and Event Risk (2004)   Over the past several years, banking regulators have recognized that many banks are well equipped to model risk and estimate economic capital requirements.  In deference to banks' increasing sophistication in this area, regulators are moving toward implementing internal capital model approaches that would allow larger institutions to differentiate capital requirements based on their assessment of risk. Is It Strategy, Execution, or the Alignment of the Two? (2004)   We have found that "execution alignment" is a critical determinant of achieving powerful revenue and profit momentum.  This article describes why execution alignment is so critical, yet elusive, and offers ways to find and fix its weaknesses. Will the Pursuit of Better Service Quality Pay Off? (2004)   Based on our extensive field research, the in-branch customer experience varies widely and influences market share. Measuring Same-Store Deposit Growth Performance: What Other Retailers Teach Bankers (2004)   Other retail industries obsess about same-store sales growth.  Should bankers adopt this point of view?  The answer is "yes." The Drivers of Bank M&A (2004)   Structural forces in the financial markets point to continued strength in bank M&A. Debit Card Rewards: Did the Wal-Mart Settlement Kill the Business Case? (2004)   Prior to the Wal-Mart settlement many banks had free rewards programs for signature-based debit cards.  FMCG's recent revenue modeling suggests there is still a case for the selective use of "free" rewards to stimulate checking account growth. How to Succeed as a Solutions Vendor to the Banking Industry (2004)   What is more essential... technology sophistication or understanding customer needs?  This paper examines the underpinnings that have enabled the best positioned solutions vendors to win.  Understanding market segments and getting in early are consistently key. Reinvigorating Direct Mail in Financial Services: Capitalizing on New Insights into "Why" Consumers Buy (2003)   Moving beyond responder models can generate breakthrough improvements in campaign ROI. The Power of Specialization in Consulting (2003)   During the 1980s and '90s, career opportunities in management consulting skyrocketed, and college and graduate school graduates flocked to consulting firms.  Over the past few years many of the job offers, often from the larger management and IT consultancies, have dried up.  Underpinning this decline has been an economic slowdown, client's tighter budgets, and ever-increasing demands for bottom-line results. New KPMs Should Play A Role In Being Customer Focused And Revenue Driven (2003)   "You can't manage what you don't measure." It's an old adage, and particularly relevant to improving customer focus while increasing profit per household. Operational Risk on Trading Floors: Why Dangerous Ailments Go Undiagnosed and What Is the Cure? (2003)   FMCG is frequently asked to review enterprise-wide risk management at leading U.S. and international financial institutions.  Our experience suggests that notwithstanding the complex and costly risk control frameworks in place at many trading floors, significant operational risk vulnerabilities remain. De Novo branching: Pathway to Profitable Growth? (2003)   Many banks have announced branch expansion plans.  Only a few will "beat the odds." Beating the Odds in Outsourcing (2003)   Surveys indicate almost two-thirds of banks are dissatisfied with their internal IT support, but they also show that over two-thirds of outsourcing deals fail to meet expectations.  If you are part of the two-thirds dissatisfied, how can you become part of the one-third that succeeds at outsourcing? Deposit Share Shifts: Who Is Winning... David or Goliath? (2002)   "Smaller banks" as the story goes, have been suffering due to: (i) lack of scale to invest in technology and infrastructure, and (ii) less branch convenience.   The reality differs from the theory. Keys to Success in Franchise Retail Banking (2002)   This study uses acquisition-adjusted growth to identify those who are capturing profitable market share.  We then examine the underlying strategies used by these high-growth banks. Better Service: Can It Add Points To Your P/E Ratio? (2002)   It's not news to assert that service quality matters. But how much is it worth?  FMCG's new analyses of high versus low performers in customer service shows that the typical regional bank holding company can increase stock price by 10%-15% through better quality. Pricing Competencies: They Key to Balancing Revenue Growth and Margins in Retail Banking (2001)   The need in retail banking to move beyond current pricing approaches is amplified by several findings from FMCG's recent analyses and other client works.  While some banks are better at pricing than others, very few would claim that they have yet amassed a sophisticated understanding of demand elasticity. Pathway to Profit Growth - Realign Promotion Spending Using Financial Personality Segmentation (2001)   Survivors of the economic decline will be those firms with both the good fortune to have avoided significant losses and the skills to capture profitable market share from weakened competitors. The Revenue Challenge in Retail Banking: How to Compete in a Mature Market (2001)   If the next three to five years in retail franchise banking play out with the momentum identified during the recent BAI/FMCG study, the competitive landscape will change materially. Making the Numbers... Can Marketing Help? (2001)   Should marketing be cut back, or expanded to drive revenue growth?  In most banks, top management is forced to address this question on a judgment call basis. Wall Street, We Can Save You Millions (2001)   Systematic demand management and creative negotiations can reduce market data, external brokerage, and other expenses. Bank Insurance: The Keys to a Successful Strategy (2001)   Approximately 4,000 banks are now offering insurance products. Banks are looking to bank insurance as a new source of nonvolatile, growing fee income.  Revenue potential is huge; expectations for success have been high. Is Retail Banking Undervalued? (2001)   Retail franchise banking is suffering from the Rodney Dangerfield "I get no respect" problem. Has Liquidity's Time Come? (2001)   Balance sheet liquidity management - the task of maintaining sufficient cash to fund ongoing operations - has historically proven to be a key determinant of survival in times of stress. The Revenue Growth Challenge in Retail Banking (2001)   The path to profits in retail financial services will require providers to excel in their customers' minds on some combination of price, convenience, advice, customer recognition, and personalized service.  The question is, "What should my bank stand for?" The Perils of Diminishing your Value Proposition: A Study of the Drivers Of Deposits (2000)   Our analysis of the products that dominate retail franchise profits shows that on an acquisition-adjusted basis, balance growth has been low.  As usual, however, there is considerable variation.