Since FIC has existed for 20+ years and I have consulted longer than that, last week I was a bit surprised when a banker asked me the above question. He knew we did some type of consulting but not much more than that. While we are all legends in our own minds, I should not have been surprised, since it is part of the consultant’s job to effectively communicate what we do rather than expect someone else to figure it out. And, despite articles, newsletters, and speeches that broadcast FIC’s perspective on various issues, none answers the basic question of what do we do, and why should a bank use us? Here goes an attempt to address that.
FIC possesses strong subject area and functional expertise that it applies to improving the bottom-line performance of our bank and nonbank financial services clients. We emphasize industry knowledge, a detailed fact-based analysis of each client’s individual situation, and a strong bias toward providing practical recommendations that can readily be implemented. While we have worked across all areas of banking, most of our work focuses on small business banking, commercial banking (lower end and core middle market), wealth management, and various aspects of commercial finance, including leasing. Recent project work has involved some of the areas outlined below. Note that some of these areas overlap. Also note that we do not sell canned products or software, ensuring our objectivity and allowing us to reach out to the best vendors for each client’s need, as appropriate.
* Organization, including: How can banks maximize their productivity? How should banks redesign key positions and establish support roles to provide the greatest leverage to their bankers and reduce costs? What specific organizational issues does a bank operating in the small business space need to address to avoid pitfalls? How can compliance requirements be organized to minimize the use of relationship bankers’ time?
* Segmentation, including, How can banks differentiate themselves and increase profits by focusing on selected segments, whether based on industry, product capabilities, life style, or other characteristics? What best practices exist that the bank should consider emulating? Many banks continue to put little effort into segmentation despite the strong evidence that banks with a strong segment focus outperform others.
* Revenue growth, including, How can a line of business meet the growth goals dictated by the corporate head office while maintaining high credit quality? How can banks make cross-sell into a reality rather than an ever-illusive goal? What actions must management take to break down its intra-bank organizational and compensation barriers? Retention and increased wallet share are two of the keys to excellent performance.
* Strategy, including quantifying market opportunities, identifying priority target customers, recommending sales management approaches, developing pro formas, and creating detailed implementation plans to ensure effective execution. Mickey Drexler, CEO of J.Crew says, “Every business should be creative.” But, creativity at banks is challenged today, given low growth and high compliance requirements. “Practical creativity,” however, results in revenue growth, and we work with clients to exploit those opportunities.
* Cost reduction. Doing more with less is not an option for banks today. The old cliché that you need to spend lots of money to make money (an idea pushed by Ferris Bueller’s hapless advertising salesman father) has also been discredited. Instead, many banks have learned that fewer employees and management layers supplemented by technology can result in better customer service. Also, fewer products not only can decrease costs but can also increase revenues. Old assumptions are increasingly being challenged and dismissed.
* Risk management. Today, many banks are chasing the same set of potential borrowers, increasing competitive activity and squeezing margins as banks operate in a smaller “credit box.” In effect, more banks want to lend to a smaller set of customers. We have worked with several nonbanks and a few banks to look at nontraditional lending opportunities that banks largely ignore. Initiatives of this type require strong risk management and an ability to explore various sales channels.
How do we work with clients? Appropriately, that depends on the client’s needs. We do project work that can require months to complete, run short-term brainstorming off sites that may need only a few days, and have ongoing retainer relationships with others. We complete multiple projects with most of our clients even if a multi-month or year gap occurs between engagements. Many of our new clients result from managers leaving one bank for another and inviting us to work with them.
Our website (www.ficinc.com) provides project history and additional background on FIC.