It’s been too darn long since we wrote a Gonzo column directed at all of the newbies in the financial services industry. Welcome! One of the things we were talking about recently in the Land of Gonz is how much more complicated the industry is than when we were first employed and how much more there is to understand. Back in the day, we used to get a lot of help in this area through orientation programs, management training programs and, in particular, handy glossary books that helped us understand key terms and definitions we would hear.
But while orientation and training programs are still there, where’s the glossary? Where’s the freakin’ help for the bankers that need a quick glance at something that can bring them up to speed on what’s being discussed? Well, the answer is … … the industry let you down. Ain’t there. You got nothing. You’re hosed, right?
Wrong. We at GonzoBanker never, ever identify a problem without immediately obsessing on providing the solution. So, here we go. What follows is a list of key terms it will be imperative to understand to navigate the tricky financial services industry. Of course, we have tried to focus on “working” definitions rather that the highly theoretical ones that won’t help move anyone’s career forward. We have conveniently divided it into general terms, customer terms, and technology terms.
Key Banking Terms
Strategic Plan – a document created annually by management that simply tries to predict what’s going to happen in the next three to five years with the national economy, the local economy, politics, interest rates, consumer behavior, technology, channels, old competitors, new competitors, borrowing demand, jobs, regulation, and five to 10 other key factors then outlines what the bank will do if the predictions are exactly right.
SWOT – an important part of any strategic plan that identifies senior management as a Strength, sales culture as a Weakness, big bank customers as an Opportunity, and regulation as a Threat.
Senior Management Committee – a highly secretive meeting that occurs at least one a month. No details are ever revealed, no written record allowed, no discussion outside the meeting itself. Attempts to crack this meeting have been dealt with through shunning and banishment.
Loan Committee – a weekly meeting where new and renewed loan deals are presented for approval or denial. The agenda includes an extreme review of copious loan details, terrorizing of junior officers who did not do the analysis well enough, loud and heated arguments over the merits of the loan, a red-faced decision by a narrow majority coupled with furious dissention by the minority, and a genial lunch where the committee catches up on family and vacations, and schedules golf.
ALCO Committee – a weekly management meeting at which the CFO says there is no money to be made at the proposed margins and the heads of retail and commercial banking reply that if the bank wants to grow at all it had better match competitor rates.
Regulators – Permanent residents of one of the meeting rooms on the executive floor who take regulations thought up by legislators that the legislators don’t understand, turn them into requests that the regulators asking for don’t understand, produce a report that the bank doesn’t understand and, as a result of the report, require the bank to do things that nobody understands.
Regulatory Audit Report – see definition of “hallucinogen.”
Employee Downsizing – staff reductions.
Employee Right-Sizing – staff reductions.
Employee Talent Optimization – staff reductions.
Production Capacity Modeling – staff reductions.
Management Consultant – a highly trained, deeply knowledgeable, third-party resource who can offer pragmatic, hands-on advice on how to improve performance, maximize employee effectiveness, and reduce costs whose only required qualification is that they cannot have worked in a branch, loan, finance, or I.T. department for at least 15 years – if they ever did at all.
Consultant Project Analyst – an assistant to the management consultant whose job is to participate in all calls with the bank and, if any deliverables are late or not acceptable, say it was their fault.
Key Customer Delivery Terms
CRM System – a sales support system that does quantitative, Boolean analysis of customer demographics, behavior, previous buying trends and propensities, then the next time the customer is in the bank sends a message to the front line employee to sell them a debit card and a loan.
Customer Profile Sheet – this term has actually grown to have two distinct definitions.
- Management definition: An automated tool that is used by the front line to continuously grow and institutionalize customer information and use it to more successfully target cross-sales and relationship expansion.
- Branch definition: A manual form that must be filled out with uncooperative customers at least five times a week to avoid negative comments on performance reviews.
Sales Tracking System – technology that completely automates the gathering of all sales activity and results and produces detailed reports on employee sales effectiveness, requiring the sales employee to do nothing more than track it all again in an Excel spreadsheet so he/she can let management know that the automated monthly report is wrong.
Baby Boomers – a key demographic group whose members, born between 1946 and 1960, have many different characteristics but three similar attributes: (1) they have not saved enough for retirement, (2) the boomers born before 1954 can’t remember significant gaps of their lives (from eight hours to two months) between ages 17 and 22, and (3) the ones born in 1952 and earlier all distinctly remember physically being at Woodstock in ’69 and hearing Hendrix play the National Anthem. This last piece obviously can’t be true, although it is interesting to note that every boomer at GonzoBanker was actually there. I sure know I was! … wasn’t I?
Gen Y – a key demographic defined as customers born between 1980-1996 who save less than other customers, borrow less, use more channels, are fee-averse, are no more loyal to their financial institutions than anybody else, and for these reasons are highly coveted by every bank.
PFM – personal financial management tools that let customers, particularly Gen Y, download every expense item, categorize them, and produce reports that tell them they spend too much on drinks and restaurants and should save more.
Durbinitis – a twisted form of paranoia that can inflict employees of larger banks. The condition manifests itself in the form of loud, repeated claims that they used to have 45 cents in their pocket and now they only have 21.
Key Technology Terms
Technology Steering Committee – a group of bank managers, usually senior, who meet quarterly to prioritize technology projects and ensure that the “Required” list never exceeds 150% of available I.T. resources.
Chief Information Officer (CIO) – see definition of “Piñata.”
Vendor Sales Representative/Account Manager – see definition of “CIO.”
Vendor User Conference – an annual meeting hosted by a vendor that has four required sessions: (1) a really good keynote speaker, (2) a consultant presentation that hints at potential engagements they are available for, (3) a last-night theme party (usually Polynesian) with a buffet, and (4) a breakout session on new print drivers.
Vendor CIO/Board Conference – the same definition as a Vendor User Conference except the buffet and print driver session are replaced with a sit-down dinner and a golf tournament.
System Selection – a process a bank goes through, often aided by a consultant, to select a new system for the bank. The actual process is very detailed, but the essence of it was captured very accurately in the chariot race scene in Ben Hur.
Software Warranty – a contractual commitment by the vendor that maintains that the software bought by the bank will perform 100% according to how it was presented and how it is documented and stipulates that the only circumstance that excuses the vendor from this commitment is if it doesn’t.
Limitation of Liability – an additional contractual item that states that if there is any condition under which the vendor might ever owe the bank money, a pre-condition of that payment is that Beelzebub himself must appear from the sky, click his hooves six times, and smote the vendor account representative.
System Integration – the use of new technology that ensures a front-line employee will never have to enter the same customer information more than three or four times.
Cloud Computing – New infrastructure that replaces the server in the branch that had slow response time with centralized blade servers that match the pervious response time.
So … reviewing once … reviewing twice … yep, this is about it. Keep a copy of this list in the hip pocket and sail through orientation, employee meetings, performance reviews, sales rallies, audits, committee meetings, and any other form of corporate activity with nary a concern in the world that you’ll be caught unprepared.
Of course, if any intrepid reader thinks we might have missed a key term or two and wants to add it to the glossary, let us know. The fortunate few whose suggestions pass muster with our highly selective review committee might actually receive a GonzoBanker T-shirt or cap. We want this to become a living, breathing industry document (as opposed to most written documents that sit and gather dust, a “living, breathing” document is actually dusted).
So, new industry employees, you are prepared. You are armed with information. Go forth and prosper.
Winning submission from a loyal readers:
“A two-week session where 30 somethings tend to act like 20 somethings, 40 somethings also act like 20 somethings, 50 somethings act like teenagers while still retaining their legal drinking age & expense report privileges, and 60 somethings wonder why they are still in the banking game.”
–Submitted by Jeff Brower, senior sales executive, Fiserv‘s Bank Solutions Group
You Ain’t Seen Nuthin’ Yet!
If you enjoyed the wisdom imparted by Mr. Roche in today’s missive, you should see what happens when he and all the talented folks at Cornerstone Advisors (that’s GonzoBanker’s mother ship) get seriously down to business. With a whole host of offerings to help banks increase efficiency and improve earnings, Cornerstone Advisors has helped hundreds of financial institutions become and remain profitable.