Financial Institution Organizational Structure: Challenges Abound Within the Financial Services Industry
As credit unions and community banks grow, staffing tends to expand along with these total assets, and this growth can sometimes lead to a counter-intuitive segregation of duties.
HR growing pains are not a problem that are specific to only financial institutions, but rather this is a challenge that is faced as many kinds of businesses expand. We tend to find ourselves trying to design the growth of a business around existing staff, melding positions to people who are already in place. And this can become a real problem.
We’ve seen many medium to large financial institutions place digital responsibilities with mobile banking staff, programers or other IT personnel. Keeping this area of control outside of marketing or communications departments. We’ve seen FIs with too many staff in the mix, all in various departments. These decentralization can cause the lack of a clear chain-of-command, and thus teams fail to adequately follow-up on what is or is NOT being accomplished.
Unfortunately, there’s no template for how a community bank or credit union 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, missing specific goals, and lacking a clear plan for implementation or measurement of results.
Community-Based Financial Institutions also 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. CUs often don't hire from outside the institution unless someone leaves the organization. This practice can sometimes leave an institution with gaps in technical expertise in areas of innovation or change.
It is essential that financial institutions periodically restructure staff based on skill sets, assessing areas of need and then filling those gaps, rather than simply letting departments expand and change over time via staff attrition and organic growth.
Keeping departments 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 frontline 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 financial institutions 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. This will only 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.
Read more about how to GROW your Credit Union or Community Bank in our recent e-Book! Or contact us and we can tell you all about it in person! Thanks for Reading... Happy Growing!
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