With megabanks struggling to achieve profitability, the opportunity is ripe for savvy banking entrepreneurs to create nimble and modern community banks from the ground up. Unfortunately for banking customers around the country, the pace of bank start-ups has actually slowed down rather than ramped up. Several issues are to blame, but a significant obstacle is the challenge of finding and recruiting willing bank organizers. The same challenge can throw a wrench into an organization group’s plans to purchase an existing bank as well.
The team of organizers provides the de novo bank with insights, contacts, talent, direction and, of course, organization capital. The right team can turn the vision of a banking start-up, or a purchased bank, into a profitable and satisfying local community investment.
When the business plan is solid, the arguments for becoming a bank organizer are compelling: the experience can greatly enhance the organizer’s position in the community as it helps the community thrive and grow. The ability to become part of such a project at the ground level and, ultimately, create a powerful investment are often reason enough for the right personalities to jump on board.
In today’s world, however, potential organizers have been reluctant to commit. In general, they’re nervous about dedicating the time and resources to the project. That nervousness is likely rooted in a few different issues, including:
• Excessive media coverage about the supposedly unstable state of the banking industry
• The performance of the prospective organizer’s own business; organizers who are struggling to keep their own businesses afloat in this economy won’t want to dilute their focus by committing to a new bank project
Sweetening the pot
To be successful in recruiting qualified organizers, the individuals spearheading the project must recognize these challenges and address them with prospects immediately. Some talking points that might be helpful in this regard include:
• The media’s coverage of the banking industry is over-simplified; the majority of community banks and balance sheet lenders are effectively managing through this current economic cycle.
• The new bank has the opportunity to operate at a significant competitive advantage, because it opens its doors with a clean balance sheet.
• Devoting time and capital to a new bank project is an investment and, as such, adds diversification to the organizer’s assets.
• The success of the new bank can add stability to the organizer’s existing business by solidifying that organizer’s position and visibility within the community.
Finally, while it is important to build an organization team quickly, it’s also crucial to select organizers who will be committed and involved throughout the process. Overselling the opportunity and understating the commitment when recruiting organizers is a strategy that’s likely to backfire.
Next week I’ll discuss the primary responsibilities of the organizer and what characteristics might qualify an individual to be an effective bank organizer.
The team of organizers provides the de novo bank with insights, contacts, talent, direction and, of course, organization capital. The right team can turn the vision of a banking start-up, or a purchased bank, into a profitable and satisfying local community investment.
When the business plan is solid, the arguments for becoming a bank organizer are compelling: the experience can greatly enhance the organizer’s position in the community as it helps the community thrive and grow. The ability to become part of such a project at the ground level and, ultimately, create a powerful investment are often reason enough for the right personalities to jump on board.
In today’s world, however, potential organizers have been reluctant to commit. In general, they’re nervous about dedicating the time and resources to the project. That nervousness is likely rooted in a few different issues, including:
• Excessive media coverage about the supposedly unstable state of the banking industry
• The performance of the prospective organizer’s own business; organizers who are struggling to keep their own businesses afloat in this economy won’t want to dilute their focus by committing to a new bank project
Sweetening the pot
To be successful in recruiting qualified organizers, the individuals spearheading the project must recognize these challenges and address them with prospects immediately. Some talking points that might be helpful in this regard include:
• The media’s coverage of the banking industry is over-simplified; the majority of community banks and balance sheet lenders are effectively managing through this current economic cycle.
• The new bank has the opportunity to operate at a significant competitive advantage, because it opens its doors with a clean balance sheet.
• Devoting time and capital to a new bank project is an investment and, as such, adds diversification to the organizer’s assets.
• The success of the new bank can add stability to the organizer’s existing business by solidifying that organizer’s position and visibility within the community.
Finally, while it is important to build an organization team quickly, it’s also crucial to select organizers who will be committed and involved throughout the process. Overselling the opportunity and understating the commitment when recruiting organizers is a strategy that’s likely to backfire.
Next week I’ll discuss the primary responsibilities of the organizer and what characteristics might qualify an individual to be an effective bank organizer.