Profitability and Process

Progressive financial institutions are making significant investment in technology. Those that delay don’t truly understand the efficiencies gained through implementing software solutions. 

Many appraisal departments are so busy they have little time to create, let alone execute a strategy. What’s your game plan? 

It comes down to technology and process. 

Ability to execute strategy 

Take an audit of your department. Is everyone on the team open to improving their processes? You may be met with resistance by uncovering operational inefficiencies. Will the promise of revenue opportunities facilitate an improvement in your office culture? 

Ability to respond quickly 

Customers inside the bank, the C-suite and lenders, want quick service. Are you currently providing best in class service? 

Uncovering operational inefficiencies 

Net interest margins are tight for many banks. Revenue growth can also be stymied by rising regulatory compliance costs. Key to your success is structuring your processes to maximize revenues and reduce operational inefficiencies. The latter of which drains your resources from other more profitable opportunities. 

Keeping score 

Senior management needs the confidence to know if your department is performing at peak efficiency. It may take a third-party review to give your department a new perspective to identify the bottlenecks. This can serve to highlight areas to improve profit and performance. Appraisal departments don’t always have to be a cost center.  

Having your metrics is step No. 1. This allows you to create specific meaningful projects that can move the football down the field. Metrics are the outline for defining your success. Take the time to write down the successful outcome of a specific project. Resist the urge to just give it a quick thought and not actually take pen to paper. 

Give the project a name and define the success criteria. Identify the best and worst results, this will help visualize the upside and the downside, the latter of which is if you do nothing different. 

What’s the upside? 

1. Financial performance 

2. Achieve growth 

3. Lower operating expenses 

Technology hostage situation 

Sometimes technology implementation can be stopped due to internal employees resisting change. 

Those afraid to change might find an “issue” with a software solution and stop it in its tracks. They complain the software is not able to do X or Y. Unproductively, this is often a red herring so they can go back to their comfortable old ways of doing things. Usually old platforms, spreadsheets or manual processes. 

Uncovering operational inefficiencies and revenue opportunities is a “mike drop” to obtaining significant strides in productivity. In order to not disrupt the workflow, the folks that implement new software platforms need to be cognizant of respecting each organization’s culture. 

Peer comparison 

How do you compare to your peers? Having a distributed workforce and hoping nobody notices your specific performance isn’t a plan for success. Taking ownership of your position will be reflected in benchmarking and peer comparison. Analyzing operating expenses to other financial institutions, highlight opportunities for improved efficiencies. 

Key to scoring a lot of touchdowns is technology utilization. It’s important to match up the capabilities of your appraisal platform to your long-term objectives. Pick up a recent edition of American Banker if you want to see how your financial institution is scored.  

Want to win? 

Professional football teams don’t take the field without a plan. As a valuation professional in your bank’s appraisal department, neither should you. Profitability and process. That’s a winning strategy. This will get you into the end zone every time. Plan to win next Sunday’s game.