BI and Bankers: Shoulda, Woulda, Coulda

Every banker could have benefited from business intelligence (BI) technology.Every Banker: It's true, there isn't a banker alive who isn't worried about the state of the banking business and the weak economy facing every industry. Every banker is up the creek right now even if he never heard of a subprime mortgage or needed a bailout. He's worried about his best customer bellying up, or his "secure" investments losing 50 percent of their value, or how Mr. Obama and the new administration are going to deliver much needed remedies. If this is a recession, how bad can a depression be?

Shoulda: To say every banker shoulda had the foresight to look ahead and use the tools of intellectual technology is wishful thinking. In my opinion, even the Og Mandino (author of "The Greatest Salesman in the World") of the bank tech sales people would have had a monumental task of convincing many bankers that BI technology was as essential as producing a Call Report every day. Most bankers were winging it just as some airlines were winging the inspections of their aircraft. The attitude in both cases seemed to be, "We'll fix it after the crash."

Woulda: Even after the dust settles, which by all indications is projected as the year 2011, and maybe beyond, I don't think many bankers will change their ways. They think of this economy as the Katrina factor-it happens only once in a lifetime.

Coulda: Theoretically, 16,400 financial institutions could have deployed a number of BI capabilities because their primary tech vendor provides scalable, easy-to-use, and inexpensive devices to guide future directions and provide sound decision-making rules.

Let's face it-banking is a business run by mechanics. And good mechanics they are. It's all about moving a transaction from a point of origination through a thoroughly tested network of events and ending up with a perfectly reconciled position. Engineers need not apply.

But banking is now in the tank, as even Ben Bernanke knows. Rate cuts are about as effective as Bondo on a leaking ship. One more rate cut and bankers will be getting paid to borrow money.

Since the human element is what got us into this mess, may I humbly suggest a hybrid solution-pragmatic BI tools plus analytical bankers. But don't expect the tools to be invoked by simply pressing a function key on your computer. It's more than that. Next time your primary tech vendor takes you to lunch, ask the account manager to pitch his BI product capabilities to your people. You'll spend some money but it'll be a lot less than what you've lost in earnings.

As with any new "brainware" there are several caveats that any sensible community banker should heed. The most important one is to shy away from generic BI solutions. That's why I suggested a contact with your primary tech vendor. You are a bank and you need banking solutions. Bank tech vendors have them and they can get you going without first having to learn the banking business. The best people in a community bank to evaluate BI solutions are the CEO, CFO, CIO, CLO and CMO. I will make a special appeal to include the Auditor. As I pointed out in a previous blog, his job is to catch the crooks and the irregularities before the crimes are committed. If you already use an Asset/Liability Management system, it's a start. There's a lot more to BI after that.