The focus of bank, savings and loan and financial services income improvement consulting studies differ somewhat because the product mix and product focus of the organizations differ. However, the techniques that generate additional profits are very similar. In many cases they are virtually identical.

There are essentially two basic approaches to bank Income or Profit Improvement engagements among financial services consulting firms: the ratio analysis method and the detailed analysis method.

Ratio analysis involves comparing key ratios of the organization against similar ratios of financial services organizations of similar asset size. The organization’s ratios not in the top quartile are identified and the fundamental factors affecting the ratios’ poor results are identified.

The detailed analysis method involves reviewing up to 500 different functions throughout the organization, depending on the bank’s size and the services offered to determine if each is operating optimally from an income perspective.

While CCI is experienced in both types of Income Improvement studies, both approaches have fundamental shortcomings. Ratio analysis can miss opportunities for significant Income Improvement because opportunities associated with the institution’s ratios in the top quartile of similar sized organizations are not identified. Detailed analysis, while usually more encompassing, can be expensive to conduct. In both instances, the study may wane once “guaranteed” amounts have been met. And, when the study has been completed the Income Improvement expertise leaves the organization.

CCI has completed income improvement, reserve requirement reduction and cash vault modeling studies at over 30 banks and savings and loans.

CCI has developed an alternative Income Improvement approach that costs less than half the cost of a typical detailed analysis study but includes all of the analysis involved and leaves a considerable amount of Income Improvement knowledge with the client’s staff. CCI partners with the client’s staff to perform the most extensive Income Improvement study possible. Since Work Plans are developed and published prior to the beginning of the study, the study continues to completion. Effort does not diminish once a “guaranteed” amount is met.

The basic steps associated with the approach are:

1. Work Plans for each functional area (Retail Banking, Lending, Operations, Accounting, etc.) that include up to approximately 500 applicable areas of analysis are developed by CCI and approved by the client.

2. An incentive system for the identification of Income Improvement opportunities is developed, approved by the client and published.

3. Members of your staff are trained by CCI in Income Improvement techniques and the identification of various types of Income opportunities.

4. Your trained staff in conjunction with CCI reviews each item on the Work Plans within their area of responsibility to identify Income Improvement opportunities.

5. CCI ensures each Income Improvement opportunity identified is cost justifiable.

6. Your staff and CCI develop implementation plans for each Income Improvement opportunity identified.

7. CCI oversees implementation as required.

8. Once implementation has been completed meetings are conducted. Functional areas that have identified unique opportunities to improve income share with other members of your staff how the opportunity was identified and the applicable benefits.

9. CCI remains available on an ongoing basis to answer questions and support your Income Improvement efforts.

Once your staff has become familiar with Income Improvement opportunities and techniques, analyzed their areas of responsibility and implemented opportunities for improvement, the principles become second nature and are incorporated into their decision processes. Staff is aware of the impact their decisions and actions have on income and they become much more income conscious.