For private equity investors, commercial finance companies, and banks FIC has taken the lead role in due diligence activities related to assessing a target’s marketing effectiveness, sales potential, risk management procedures, operational integrity, and reputation within the target’s industry and with its customers. Our years of experience and extensive industry contacts turn “six degrees of separation” into one or two, providing our clients with the background required to make the most informed decision regarding a target company.
Despite the initial analysis many acquirers believe “you don’t know what you’ve bought until you buy it.” We work with acquirers to avoid unpleasant surprises and, as required, focus on the making specific recommendations related to the organization, personnel, strategic, and related issues that cause an acquisition to succeed or fail.
We possess extensive experience in working with management to develop strategic plans that emphasize the practical and include specific implementation. Strategic plans without detailed implementation planning usually result in lackluster results. FIC’s flexible operating model also allows us to remain involved in the implementation process, following up on a part-time but regular basis to make sure that implementation remains on track.
Organizing to allow increased productivity and bottom line growth has long been a challenge at many banks. Banks often make their organizational decisions around the interest of their current staff rather than the bank’s long-term requirements. However, today’s slower growth environment demands that banks achieve more with lower personnel costs and requires banks to challenge the traditional organization with its often-outdated roles and responsibilities. FIC can evaluate the current organization, compare it to industry best practices and the needs of the bank going forward. We provide highly specific recommendation s concerning the optional organizational structure and the responsibilities of key positions. Our aim: improved productivity, job clarity, and enhanced customer service.
Banks cannot afford to be “all things to all people.” Our experience demonstrates that the best performing banks pick their spots, emphasizing certain market segments, industries, product strengths, or other capabilities. Examples include:
City National Bank – Entertainment industry
First Republic – High end mortgages
Liberty Bank – Time share financing
Signature Bank – Equipment Finance and Commercial Real Estate
Banks seeking higher returns need to distinguish themselves from the pack; strong segmentation can provide that difference. FIC works with banks in assessing possible segmentation options and in building the internal infrastructure and approach required for sustainable growth.
While no one activity offers a “secret sauce,” developing excellence in cross selling may be as close as it comes to that goal. The attached article (Put in BAI I can forward if you do not have it) summarizes some of the critical issues related successful cross sell. Product simplification and prioritization, account planning, metrics, and compensation are among the key elements of this effort.
Big Data Analytics
FIC has established a partnership with a Big Data firm that has operated for 30 years in the commercial space, and we believe has the most extensive and relevant information for the analysis of small business and middle market opportunities. Working with their databases and a bank’s internal data, FIC can improve banker productivity by:
- Identifying the 8-12% of small businesses using consumer DDA accounts
- Determining wallet share opportunities and the amount of business leaking out to other banks
- Targeting prospects based upon screening criteria developed by the bank, including industry, risk rating
- Providing screened marketing lists aimed at specific branch catchment areas
- Highlighting customers and targets based upon their propensity to use certain priority products
- Identifying customers and prospects that “look-alike” high profit customers
We have worked with multiple vendors – IT firms, investment banks, private equity firms, alternative lenders, among others – assisting them in developing business relations with banks. Some vendors wish to sell their products to the end customer with the bank acting as a partner and intermediary. Given bank concerns over privacy and their need to address an increased number of regulatory requirements, vendors must be very buttoned down in their offer, provide a turnkey solution for banks, and be both patient and persistence in dealing with banks. FIC provides both guidance and introductions for vendors hoping to lever banks’ relationships with their customers.