Jen Megee
Director of Process Improvement

1. Deposit and Loan Product Review
Banks should review their product lines to ensure that appropriate and competitive fee and rate structures are in place. It’s an important exercise to ensure that the institution’s products meet customer expectations, which have changed over time.

Often, products are set up, and years go by without an honest evaluation of their profitability. Refresh and revisit product offerings, always with a lens of improving the customer experience. Now is a good time to tweak the product set to reduce expenses or increase income.

2. Develop a Robust Debit Card Program
The debit card program is the bank’s primary source of non-interest income from a deposit perspective. Analyzing the debit card program and ensuring it is as robust as possible is a strong investment in profitability. This process involves:

• Measuring transaction growth, penetration, activation and utilization (PAU) to determine whether the trends are up and to the right.
• Marketing the value propositions of the debit card program to ensure the bank’s debit card is “top of wallet.”
• Investing in technologies such as contactless cards to increase usage and cardholder engagement.
• Educating staff on the value proposition of the debit card so they can communicate it to customers.
• Reviewing the card brand, electronic funds transfer (EFT) card processing and personal identification number (PIN) network agreements for maximum profitability.

3. Capitalize on Your Biggest Asset: Your Employees
A quote attributed to billionaire entrepreneur Richard Branson says, “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”

Leveraging employees to help the bank deepen relationships with its clients is essential to growing the business and increasing profitability. External business development programs for frontline staff as well as training will help them evolve from seeing themselves as order takers to seeing themselves as relationship builders. That will help the bank expand existing client relationships and develop centers of influence that can refer new clients. This approach has the added benefit of increasing employee engagement, which PRI partner Mikelle Brady highlighted in the article, “Preparing for a Focus on Process and Efficiency.”

4. Review Your Operational Effectiveness
Operations departments have been overlooked over the years for automation opportunities, and now is the time to review processes and system utilization.

Technology has come a long way in recent years. Bankers need to look at what they do daily and ask if there’s a better way. There are usually several opportunities to save time in operations, which is like finding hidden treasure in terms of profitability.

The article “Wasting Time: 8 Opportunities for Improving Operational Efficiency” examines the eight top areas where excess time is spent in bank operations and why it’s important to focus on these inefficiencies now.

5. Have a Sound Vendor Contract Management Program
To improve profitability, monitor vendor contracts regularly. Often, banks have contracts with multiple vendors to provide products and services, and they fail to effectively track renewal dates. Implementing a tracking mechanism ensures that renewals don’t occur automatically with unfavorable pricing. This allows the bank to negotiate and potentially bring new, more progressive vendors into the mix for better servicing, automation and pricing.

Taking these five relatively simple actions proactively will optimize the bank’s profitability at a time when they may be experiencing a squeeze on profits.

Additional Resources 
The Retail Initiative for 2021: Improving Debit Card Portfolio Performance, PRI 
Improving Debit Card Activation Boosts Profitability, PRI 


Jen Megee

Director of Process Improvement

Jen Megee, PRI director of process improvement, brings over 25 years of banking experience from midwestern community banks and large national banks. A skilled engagement manager, Jen brings expertise as a retail banking and deposit operations executive. Profit Resources Inc. specializes in identifying profitability improvement areas for community banks through revenue growth, cost control, streamlining processes, and effective use of technology.