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Being a Bull among Bears

July 26, 2010

As an investment banker, my grandfather used to say to me, “Jeff, buying stock is a strange game.  It is the only thing people refuse to buy when it’s on sale.”  As a young person, the meaning of that saying was lost on me.  Now, as a business person, I understand that the true message in his words was not about the volatility of the stock market.  Instead, my grandfather was attempting to give me an object lesson in being a forward thinker.

In today’s market numerous financial institutions are foregoing investments in the future of their business; instead, hoping they simply weather the storms of today.  For many, new-found risk aversion is a direct consequence of foolhardy risks taken in the past.  For some, caution is borne out of uncertainty, concern for what lies ahead.  Despite popular caution or general unrest, there are a few organizations that act as bulls among bears.  Rather than weathering the down market, these institutions are taking advantage of unique market conditions and growing their business as a result.

Two distinct consequences of the worst financial condition in the last 80 years are widespread bank failures and rampant consolidation.  While many organizations struggle to keep leaky balance sheets afloat, others are acquiring new assets at fire-sale prices.  One of the latent or unforeseen consequences of these trends is the erosion of trust in financial institutions by consumers.  While this is an impediment to some traditional organizations, progressive, client-centric financial institutions are using this volatility to sell a new model.

The rewards of new, organic growth are available to any organizations acting bullish in this bear market.  Unlike any other time in recent history, financial institutions have the opportunity to reassert themselves, selling trust in the face of uncertainty.  Rather than scaling back services or lowering head-counts, bullish firms are investing in new delivery channels and coaching consultative sales behaviors at the branch level.  The progressive organization isn’t looking to weather the storm; they are looking to harness its energy.

In an effort to work smarter, as well as harder, financial institutions must align themselves with technology partners with a proven track record of success.  The evolution of remote deposit capture, remote cash deposits, online and mobile banking, and the branch as a primary delivery channel all demand partnerships with technologists wielding a wide breadth of knowledge and experience.  The time to act is now.  After all, why hibernate with the bears when you can take charge of your future and run with the bulls!

~Jeff Hauser

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