Abound Resources Community Bank Survey Reveals That Regulations, Rates, and Economic Recovery Dampen Optimism

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Abound Resources, a leading bank consulting firm, released the results of its recent survey of community bank executives.

There is a built-up demand for improving bank workflow since so few banks made workflow improvements last year

Abound Resources, a leading bank consulting firm, released the results of its recent survey of community bank executives. The results highlight that community bank CEOs are much more pessimistic going into 2013 than they were going into 2012. The primary driver of the pessimism is an increasingly difficult regulatory environment.

In 2012, despite uncertainty about the economy and regulations, CEOs felt they could plan for the impact of bank regulations. However, going into 2013 they are concerned about increasing regulations, uncontrolled powers of the Consumer Financial Protection Bureau (CFPB) and increasing inconsistency among bank examiners.

“This year bank CEOs are decidedly more pessimistic than they have been since we launched our annual survey four years ago,” said Brad Smith, President and CEO of Abound Resources. More than one-third (36%) of bank CEOs report they are either very or somewhat pessimistic about their bank’s outlook for 2013. In 2012, only 21% were pessimistic and none were very pessimistic. Only about one-quarter (28%) are optimistic or very optimistic about 2013, compared to 45% in 2012.

Other major issues of concern are a weak economy and loan demand. Both of these factors were mentioned by 67% of CEOs as major concerns in 2013.

In terms of setting growth priorities for 2013, growing commercial loans, growing mortgages and mortgage originations and increasing market share among the small business segment were the top three.

On the operating side of the equation, priorities are consistent with prior year surveys in that streamlining work flows and increasing operational and technology efficiencies are the primary focus.

2013 is the year of bank workflow improvements. In 2012, streamlining bank workflows was cited by 45% of CEOs as a priority, second to improving efficiency ratios (64%). This year, improving bank workflow is the number one efficiency and cost saving priority for CEOs (60%), followed closely by improving the bank efficiency ratio (58%). According to Brad Smith, “There is a built-up demand for improving bank workflow since so few banks made workflow improvements last year. Bank workflow improvement projects are tricky as middle management is often resistant to changing how they work, or they don’t know how to make changes beyond a few tweaks.”

A complimentary copy of a White Paper analyzing the complete survey results is available for download by clicking here.

ABOUT ABOUND RESOURCES

Abound Resources is a full service bank consulting firm with the sole purpose of helping community banks achieve their goals - whether those goals are for growth, efficiency, technology or risk management. In fact, we guarantee it.

Abound Resources offers an array of services designed to improve performance and profitability and help community banks cope with an increasingly stringent regulatory environment.

Our seven practice areas are each headed by an experienced practice leader:

  •     Technology – bank technology plans, bank vendor evaluations, core vendor RFPs, bank contract negotiations, bank vendor management
  •     Performance Management – bank workflow improvement, revenue enhancement, bank efficiency improvement
  •     Lending – loan process improvement, loan origination vendor evaluations and implementations
  •     Small Business and Commercial – small business deposit and fee income growth programs, bank cash management programs
  •     Strategic Planning – bank strategic plans, risk tolerance planning, one page strategic plans, competitive differentiation
  •     Sales and Marketing – branch performance improvement, sales coaching and training, e-marketing strategies and campaign management
  •     Risk Management and Compliance – ERM, bank IT audits, information security assessments, bank compliance, BSA review

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Deirdre Grubbs
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