Organizational Structure and the Growth of Your Financial Institution
Financial Institution Organizational Structure: Challenges Abound Within the Financial Services Industry
As credit unions and community banks grow, staffing tends to expand along with the FI's total assets, and this can sometimes lead to a counter-intuitive segregation of duties. This is not a problem that is specific to only financial institutions, but one that is often faced as many kinds of businesses expand and add new staff.
We’ve seen many medium to large FIs where digital responsibilities were grouped with mobile banking staff, programers or other IT personnel, outside of marketing or communications departments. We’ve also seen FIs with too many staff in the mix, leading to a lack of a clear chain-of-command and thus failing to adequately follow-up on what is or is NOT being accomplished.
Unfortunately, there’s no template for how a community bank SHOULD be organized, but with greater number and specialization of staff comes the potential for inefficiency and decentralization of responsibilities. Both of these can lead to larger marketing and sales campaigns that are disjointed and lack clear implementation.
Further, Financial Institutions often grow based on the skill sets of existing employees. They tend to promote from within, which is a great strategy for building a positive work culture, but this can lead to challenges in other areas. And CUs often don't hire from outside the institution unless someone leaves the organization. This can sometimes leave an institution with a lack of technical expertise in areas of innovation or change.
It is essential that FIs periodically restructure staff based on skill sets, assessing areas of need and then filling those gaps, rather than simply letting departments grow and change over time via staff attrition. Departments that remain organized as they have always been for the sake of preserving the status quo is a dangerous habit, though one that is all too common.
Be wary… when evaluating FI organizational structure, the ‘path of least resistance’ may lead to inertia and stagnation.
We recommend that financial Institutions keep all forms of member communications and marketing within ONE department’s chain-of-command. However, it is also essential that marketing goals and objectives are tied and coordinated directly with sales and lending staff, so that digital sales leads from one department are then properly follow up on through the other and in a timely manner.
Credit Unions and community banks should also have some form of Service Level Agreement (SLA) between marketing and sales, so that individuals understand their roles and expectations with regard to the buyer's journey. If, for example, marketing is driving leads in the form of email or phone numbers for potential new loans, but then member service is failing to adequately follow up with these leads, you will see frustration and lack of success.
Some FIs group Marketing and Business Development staff into one department to better connect leads to follow ups and conversions. This is potentially a very good practice, but depending on the size of the CU this may or may not be practical.
Remember that it's easy to tell people they should be doing some kind of specific sales or marketing activity, but if these staff members don't have the time in their day or the best practice training to implement a new idea or approach, they will likely fail, and again this will lead to staff frustration and lack of growth.
We also recommend a CRM be in place and utilized by BOTH Marketing and Sales/Business Development, so that relationships with new member leads can be better nurtured over time.
About Meredith Olmstead
Meredith Olmstead is the CEO and Founder of FI GROW Solutions, which provides Digital Marketing & Sales services. Since 2013 Meredith has led the FI GROW team, working exclusively with Credit Unions and Community Banks, taking staff step-by-step through the process of launching all of their Digital Marketing efforts, as well as implementing full Inbound Marketing campaigns and providing Sales Enablement training and support. Meredith recommends a very clear and measurable strategy to all of her clients, and then works with them to re-evaluate the success of these efforts on a continuing basis, all with an eye on moving toward a clear return on your online sales and marketing investment.