Gonzo readers, we’re all limping to the end of 2011 and trying to figure out this year – what exactly went on here? We have 2011 pegged as a yin and yang kind of question where you can analyze it with rose-colored glasses or blood-shot eyes – and there are arguments for both.
Loan growth was tough, but credit quality encouraging. The big banks looked like goons on occasion, but community banks kept their shine. Profits are below historical averages but they sure look better than in ’09.
And on the personal front, we survived. Yes, it might have been better to not have a balance on the equity line after the Vegas trip, but can’t you rationalize to the spouse that it had something to do with scoring those last minute Manilow tickets? Sure, you shouldn’t have moved all the 401(k) money to the fund that shorted gold, but that story about the Russians dumping is probably still going to play out. Maybe the smell coming from the kids’ room wasn’t really a new kind of incense, but do we want to go too far with that? OK, the daughter getting the tattoo in Mexico wasn’t her best move, but after all it’s only one arm and Gargoyles have to come back into fashion at some point. And we’ll give you that Aunt Gertie shouldn’t have hired the local Rotary Club to do a Speedo-sportin’ all-male review at the Church Christmas party, but you have to admit those guys had some moves for being over 60. Hey, you can decide it’s all too much or you can decide it’s all good. It’s all good here!
There was one area where there is no debate – this industry worked hard, and we mean hard, this year. Everybody is tired. Time for a refresh, both physical and mental. The physical you have covered. The ingestion of all manner of solids and liquids, all from the mineral food group, will occur until the last bowl game is played and the last bet lost … … er, won.
The mental side of the refresh? We have it covered – the 2011 GonzoBanker Awards! Sit back and take a minute to hear our take – good, bad, or just weird – on the industry this year. We promise to be discreet and reserved in our awards – not.
Bank Deal of the Year – BBT takes Banc Atlantic
This will be a great distribution pickup for BB&T in a recovering south Florida market. The cherry-picking of branches and good loans will also lower BB&T’s risk of the deal backfiring. A solid, large regional institution for the next era of banking.
Runner Up Deal of the Year – Capital One Buys ING Direct
While not lacking scrutiny, the mass affluent deposit base of ING could be interesting cross-marketing pickings for the analytic wizards at Capital One. Watch for a national remote retail checking strategy to grow.
The Still Fearless Award
Buffalo-based First Niagara for its aggressive purchase of 195 HSBC branches. Though it created capital pressures, there should be the opportunity for John Koelmel and his gang to drive value as a market leader in the Northeast.
Credit Union Merger of the Year
No winner. With so much value waiting to be unlocked with smart combinations of branch networks, it’s a shame credit unions didn’t demonstrate the ability to execute solid mergers in 2011. Some nice announcements in 2010 but nothing big in 2011.
The Wake-Up Award
Goes to Technology Credit Union for its announcement to apply for conversion to a mutual savings charter. While this may not be an industry trend, it certainly sparked a necessary debate about charter powers and strategic options for credit unions.
GonzoBanker of the Year
We have to agree with American Banker and give this award to M&T CEO Bob Wilmers. Wilmers calls it like he sees it and isn’t afraid to point out what’s wrong with the financial services industry. A wise banker who at 77 years old continues to chart a great future for M&T.
A Banker We Love
Mark Tryniski, Community Bank System, DeWitt, NY. In the middle of all the weirdness of the past few years, Mark and his bank (like many great community bank peers) avoided the mortgage mess, avoided the derivatives mess, and focused on being the dominant bank in small towns in New York and Pennsylvania with focus and passion. The bank’s numbers show the wisdom of this strategy.
The Gonzo Career Move of the Year
Goes to SVB Financial’s Chairman Ken Wilcox for leaving his post in Silicon Valley to move to Shanghai and start a joint venture bank with Shanghai Pudong Development Bank Co. Ltd. Talk about not being content with success!
Gonzo Credit Union Leader of the Year
Kristen Christian, a struggling art gallery owner from Southern California who sparked the Facebook-infused Bank Transfer Day Movement, wins the Gonzo Credit Union Leader of the Year Award. It was nice to see a take-off-the-gloves approach to the too-big-to-fail slugs, but credit union leaders should have driven this spirit long before a twenty-something with social media did.
Fonzi’s Too Cool for School Award
Pioneer Credit Union for turning its lunch room into a ’50s-style diner.
GonzoBanker Marketer of the Year Award
Goes to Jeffry Pilcher at The Financial Brand for developing one of the industry’s best blogs and resources for retail and marketing professionals. Way to bring focus and insight to a scattered area of banking!
The Emily Litella ‘Never Mind’ Award
Goes to Bank of America for the $5 monthly debit card fee that was soon swept off the table in a wave of controversy. Boy, I’d hate to be the product manager who came up with that idea.
The ‘Time to Pucker’ Award
Goes to all the OTS-regulated banks that are facing their first round of exams from the self-appointed “big boys” at OCC. Keep the Xanax handy.
The Pandora’s Box Award
Goes to the Dodd Frank Bill for slipping the horribly vague language regarding “unfair, abusive and deceptive” practices into legislation and directing a new bureaucracy called the CFPB to torment financial institutions with this language. Ugh!
The Use of Social Media That Wasn’t Lame Award
Goes to JPM Chase for its online and Facebook Community Giving program, which attracted nearly 400,000 active Facebook fans and directed more than $600 million in charitable giving from the company.
The Lamest Hope for Revenue Growth Award
Goes to all the platform, teller and CRM systems that create “Next Best Product” prompts. What a lot of trouble and integration effort just to have employees ignore something. We have the next best product for every front-line retail employee in banking. After Durbin, it’s called the credit card!
The Repeal of Which No One Speaks Award
Goes to every bank in the country’s head-turning ignoring of the repeal of Reg Q. With the exception of Capital One and a few niche players, the entire industry is doing its best to not rock the boat and preserve legacy commercial account analysis revenue.
The Growing Storm Cloud Award
Goes to Walmart and Green Dot for their growing strategies in pre-paid cards. Walmart continues to issue its MoneyCard, and Green Dot recently shook the walls at bank offices with its approval from the Federal Reserve to buy Bonneville Bank in Provo, Utah.
The Gutsy Cost Move
Goes to International Bancshares Corp for announcing the closure of 55 in-store branches to allow the bank to keep offering free checking accounts in a post-Durbin world. Expect harder looks at low-performing branches and overall branch square footage from lots of players in 2012.
The Information that Every Bank is Missing Award
Delivery channel costs and customer usage data. It’s amazing as we strive for profitable relationships and lower efficiency ratios that our industry hasn’t made the investment in knowing how much it costs to deliver our product through different channels and customer relationships.
Bank CEO Most in Need of Hiring a Food Taster
Brian Moynihan, Bank of America. Bri-Bri has been pretty publicly “incensed” at the criticism his bank has recently garnered. The nerve of us all! After reading Happy Moynihan’s quotes on how picked on his bank has been, we feel terrible for our past encouragement of throwing bricks through Bank of America windows.
Technology of the Year
Mobile Application Paradigm. Is there an App for that? Probably. This year it felt like the mobile app reached a tipping point. Mobile apps to help you find your way, find your friends, find your car, do your business, interact with your house, are all becoming commonplace. One could argue, and Wired Magazine did earlier this year, that the way we, as individuals and consumers, interact with the Internet has changed for good. Marketing and sales strategies will need to change to meet the consumer where they are – on their smart phones.
Technology Buzz of the Year
Tablet-Wielding Mobile Bankers are transforming the sales process at financial institutions. Imagine business bankers or branch managers, armed with tablets, making sales calls. Mobile browsers directed to, or mobile apps installed for loan origination, or account opening, at their fingertips. Scan or take pictures of supporting documentation. Minimize follow up calls and documentation requests. We started “geeking out” thinking of the possibilities.
Geegaw of the Year
With apps emerging to do anything from checking your balance to picking your nose, mobile apps are all over the news. One we think could have a future is the latest from the ever-pragmatic Mitek. Mitek’s latest allows banks to offer mobile credit card balance transfers using similar OCR technology to its mobile bill pay and mobile deposit products. Take a picture of your credit card bill with your phone, send it to the bank, and the bank makes you a competitive offer and handles the balance transfer.
The ‘We Don’t Know What it Means But We’re Nervous’ Award
Goes to the Google overlord for the release of the Google Wallet. The collision of smart phones, retailing, loyalty and payments could create some real shock waves across bank payments.
The Tech Disrupter Award
Goes to Mobile Shopping. Smart phones loaded with QCR readers, bar code scanners, e-wallets, locational services and real-time offers could change everything in the consumer market. Are Best Buy and Barnes & Noble simply the free “show rooms” for Amazon now?
The ‘Do it Yourself’ Technology for 2012
Enterprise information management and reporting. There are plenty of point solutions out there but unless you are big and flush enough to afford SAP-level solutions, the real enterprise answer is nowhere. The task of getting data under control and turned into actionable information is going to require that IT groups knuckle down and start executing a long-term internal information plan.
The Technology that Solved the Problem that was Only Part of the Problem
Single sign-on. We have to give vendors and internal IT groups high marks for coming up with single sign-on solutions that work pretty well, and everybody was yelling at them to do it. It still leaves the issue that users have to access, understand and use multiple systems in a single encounter with a customer of a single process.
The Voldemort Award – He Whose Name Must Not Be Spoken
A new spooky name is echoing through the darkened halls of banks across the country – PayPal! Shhhh. Don’t say it too loud or they may crush our industry just like Walmart would have done if we didn’t squash their charter. Scary or not, PayPal is hitting the banking market HARD, and quite frankly, bankers should be scared of this aggressive competitor who executes on its plans better than most. As soon as we heard PayPal say, “We’re not trying to take banks out of the payments system; we’re trying to beat VISA and MasterCard,” we all knew that their sights were locked and loaded on banks. What will our banks and vendor friends do? Roll up their sleeves and compete with PayPal, or wuss out and try to use the very regulation we so publicly hate to keep PayPal out of the market?
Core Deals of the Year
The ‘Big Mo’ Award
OnBase. You have to admire a company that took what is admittedly not the sexiest part of bank technology – imaging and ECM – and built a powerhouse product that dominates the market. When you factor in all of the private labeling agreements they have, they’re everywhere. A nice validation of a niche strategy and customer focus.
The Can You Speak Up a Little? Award
Salesforce.com. With CRM now a 4-letter word, banks and credit unions would be happy just to get their act together when it comes to solving sales tracking and contact management. Salesforce.com and its competitors are poised to make an absolute killing in our market, but the company has been surprisingly quiet in its marketing efforts. Buy an ad or something, dudes, because this is a seller’s market.
The Big Mo Ancillary Award
Goes to the team at MeridianLink. This privately-owned, Orange County, Calif., solution was one of the hottest things in loan origination technology during 2011 and helped financial institutions everywhere better focus on the potential of the online lending channel. MeridianLink is walking the walk when it comes to delivering branch and online loan origination solutions on the same platform, and the industry has noticed. Well done.
The Lost Mo Award
Core-based Internet banking products. Through their as-little-as-possible R&D approach, core vendors have squandered the price and integration advantages they worked for so long to build.
The ‘and God’s Not Too Thrilled About Unisys, Either’ Award
This pic was sent to GonzoBanker from a rabid fan in the Minneapolis/St. Paul area just because she knew we’d think it’s funny. We dig you, Miser, and you’ve won plenty of deals with the mother ship at Cornerstone. But we just couldn’t resist a little core vendor humor.
Longest Title/Shortest Magic Act Award
Steve Koss of Unisys. Steve, whose actual title is longer than most resumes – Distinguished Engineer and Chief Architect of the ClearPath MCP Program Office (no lie) – does a 10-minute magic act during his demo. Three cheers for Steve’s approach and attitude! (No news yet on whether the pastor at Bethel Baptist Church has issued a fatwa on Steve.)
Golden Cufflink Awards
This year, your GonzoBanker staff saw many, many awesome core vendor demos, and the presenters were re-energized after a few nail biter years. In fact, the presenters were so good this year that we couldn’t pick just one. This year’s Gonzo Golden Cufflinks go to:
The Growing Up Award
Goes to commercial loan origination vendor Custom Credit Systems, which created growing buzz in the industry and began to penetrate the mid-size community banking space. It’s nice to have hard-working, honest competition in this space.
The Kid Brother Who Just Might Be Able to Kick Your Ass Now Award
This one goes to Jwaala’s Internet banking offering quietly but surely growing its user base, especially in the credit union market. Industry scuttlebutt has it that the techie darling of the Internet banking market is (wisely) targeting core-based Internet banking users. Buckle yourselves in, NetTeller, UltraAccess, DNAweb, etc.
Page-Turner Merger Story of the Year
ACI/S1/Fundtech. OK, so here goes … S1 offers to buy Fundtech, but Fundtech doesn’t like S1 as a suitor … then it does … but then it doesn’t … but then ACI offers to buy S1, which S1 doesn’t like … and Fundtech doesn’t like …but then S1 does …but then it doesn’t … but then it does … so ACI and S1 are going steady … but then the regulators say they don’t know if they like this idea … but then they might be OK with it. But NBA Commissioner David Stern won’t sign off on the deal. We feel like freshmen at a high school dance where everybody is trying to get anybody to dance with anybody else with secret notes and everything. Just for grins, we want Fundtech to make an offer for ACI.
GREAT QUOTES IN SYSTEM DEMOS
The “Fuzzy Math” Award
To CUNA, which first announced that 650,000 bank customers had moved their accounts to credit unions between Sept. 29, 2011 (when the toads at Bank of America announced their popular $5 monthly debit card fee) and Bank Transfer Day, but later had to change the estimate to 214,000.
The Oh, So THAT’S Why Everyone is So Pissed at Big Banks Award
This one goes to Matt Taibbi, arguably the most Gonzo journalist alive today. Here’s Matt’s take on what the huge banks did to us:
“This story is the ultimate example of American’s biggest political problem. We no longer have the attention span to deal with any twenty-first century crisis. We live in an economy that is immensely complex and we are completely at the mercy of the small group of people who understand it – who incidentally often happen to be the same people who built these wildly complex economic systems. We have to trust these people to do the right thing, but we can’t, because, well, they’re scum. Which is kind of a big problem, when you think about it.”
―Matt Taibbi, Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
Nothing like a little well-aimed venom to kick off the holidays, GonzoBankers!
Bankers, vendors and, yes, even consultants worked like sled dogs this year to right the ship. It’s good to know that good ol’ brute force, focus and sheer will can still get us through some highly troubling times. But we’d all be sleeping better tonight if we were even mildly confident that the fruits of our labor in 2009 – 2011 got us a little closer to preventing a future outbreak of Toobigtofailitis. Toss. Turn.
Ah, but hell, GonzoBankers, that’s a worry for 2012. Right now, it’s time to be proud of ourselves for gnashing through. The asses of 2011 have been kicked, and the names have been taken. As a great sage of our times has often said –Winning! It’s time to take off for a week or two, blow out the pipes. We all need to get our heads out of numbers and process. Let’s free our mind blissfully and maybe a little drunkenly from integration and Reg frickin’ CC. The past due reports will wait until January. Let’s all take some time to focus on what’s really most important to us all.
College football bowl season. Smart money’s on LSU, Texas and OK State. Check you in 2012, GonzoFreaks!
–Your pals at GonzoBanker