The Power of “Stop It”: Eliminating Inefficiency in Banking
Comedy legend Bob Newhart had a classic therapy skit. A patient pays five dollars for five minutes of his time and explains her troubles. Newhart listens, then offers two words that promise to make her the master of her problems: “Stop it.”
It’s a simple message, but a powerful one. And it applies far beyond the therapist’s office.
At Wolf, we see the same dynamic when we work with bank clients on process improvement. I recall standing in a Loan Servicing Department, watching an employee flip through commercial statements. I asked what he was doing. “Looking for mistakes,” he said. When I asked what a mistake looked like, he shrugged. When I asked why, he answered, “That’s how we’ve always done it.”
Our recommendation? Stop it.
These inefficiencies are likely happening at your institution right now. Identify them and stop them. We can’t afford to waste resources if we want to upgrade technology and human capital.
But let’s go beyond flipping through statements. Here are five things financial institutions should stop doing to build a more efficient and strategic future.
1. Stop Deferring to Your Core Processor
Many banks spend significant dollars on their most expensive service provider and accept outdated technology and subpar service in return.
It doesn’t have to be this way. We recently hosted Clay Adams, CEO of Mascoma Bank in New Hampshire, on our This Month in Banking podcast. Clay’s team built their own technology, Stratum, because they refused to settle for the status quo. Stratum is middleware that functions as both an API and a data warehouse, serving as the single source of truth across the institution. Every major system connects to it: core, LOS, general ledger, CRM, and more.
The result? Mascoma can swap out any technology solution for a better one with far less friction. They’ve relegated their core to transaction processor rather than the central brain.
If your core remains the central nervous system of your institution, stop it.
2. Stop Building Onerous Compliance Processes
Regulatory compliance continues to be one of the most significant external challenges facing financial institutions, with many bank leaders citing increasing regulatory complexity and oversight as a key area of concern.
Financial institutions have faced aggressive regulation, and a new administration may bring relief. But to build an enduring institution, you need scalable processes that use technology to its fullest. Driving down the cost of support functions is how you compete with large banks, branchless banks, and specialty banks.
Building “belts and suspenders” processes just to avoid an audit finding or an MRBA creates a culture of inefficiency. Stop it.
3. Stop Prioritizing Your Day Job Over Strategy
Leaders should dedicate at least one solid hour to strategic planning and execution every day. Even front-line employees should have the bandwidth to contribute to project teams that move the bank forward.
Too often, day-to-day work crowds out strategy. When a consultant arrives for a progress report, the excuse is predictable: “We have a day job.”
If your strategy stalls because you had to push a multimillion-dollar loan deal through the pipeline, stop it.
4. Stop Building Your Culture in a Vacuum
Culture is the lubrication in your institution. It differentiates you as an employer, attracts prospects, and retains high-performing employees. It shapes decision-making and directly affects the customer experience, both internal and external.
Culture should make strategy execution easier. If operational excellence is a strategic imperative, your front-line employees should be empowered and incentivized to improve the processes they run every day. If you want better pricing built on stronger relationships and a recognizable brand, your business line leaders should be incentivized to deliver it.
If your strategy is to achieve superior pricing because you’re better, but your primary lender incentive is volume, stop it.
5. Stop Managing What You Are Not Measuring
This is the natural extension of building a culture consistent with strategy. Measuring lenders on volume when you want superior pricing is an unforced error.
To correct it, institutions use loan pricing models and enforce pricing discipline in the officer loan committee. The question gets asked: “Why is this loan priced this way?” The answer is usually to get the deal done, because the underlying culture is volume-driven.
If you want lenders to close deals confidently while remaining accountable, measure the profitability trends of their portfolios. If you want branches to waive fees and adjust deposit pricing, measure the profit trend of each branch. Without measurement, you cannot manage.
If you’re calling your branch manager about yesterday’s fee waiver, stop it.
Building an Enduring Future
You likely recognized a few of these scenarios. The goal isn’t to offend. The goal is to help community financial institutions build something that lasts.
Decentralized decision-making in capital allocation drives new business formation and gives communities a fighting chance to thrive. Let’s build it together.
