Are You Prepared for the Banking Revolution?

Are You Prepared for the Banking Revolution?

Residents of Rochester, NY, like me, remember all too well when Eastman Kodak discovered the new world of digitized photos, which was revolutionary compared to actual film. As both forms of photography were compared, Kodak management decided to stay with the use of film as their standard product given stronger profit margins over digital. We all know where that led. The companies that developed and brought digital to market—in ways we never thought possible—flourished, especially when quality digital cameras were added to smart phones.

Similarly, the landscape of banking is changing at a rapid pace—and in ways that we would have never imagined.

Let me be clear, the way we bank in the future will not be the same as we know it today. The type of banking institutions will change as did the companies in the world of digital photography.

Apple CardFor starters, who would have imagined a few years ago that tech giants Apple, Google, and Facebook would enter the world of banking? Who would have foreseen the revolution of blockchain technology? Changes like these could mean a shift away from brick-and-mortar bank branches. Many traditional banking services andinstitutions could very well change beyond our imagination.

I fully expect the largest banking institutions will play a major role in this revolution. However, they will have to be strategic, forward thinking, and open to change. A perfect example is Goldman Sachs’ role in managing Apple’s new credit card. Personally, I questioned why an institutional-oriented bank would have agreed to roll out, qualify, and manage retail clients; it just seemed to be a mismatch, which has proven to be the case.

On the other hand, combining the forces of Google and Citibank does make sense to me, given their similar retail focus. Working together, they anticipate offering checking accounts to Google clients next year.

Names that are now appearing in the financial marketplace are not the ones we’re used to seeing as related to banking services. Similarly, a dozen years ago, who would have ever guessed Apple would make the number one device used in taking pictures?

It should be noted that more and more millennials, who make up over 84 million of the US population, would prefer to bank with Amazon, Apple, Facebook and Google over a traditional financial institution, if such an option was available. This in stark contract to the way baby boomers and Generation Xs conduct their personal banking today.

The way we bank is going to become far different than we know it—and at a cheaper cost. How the Fed and bank regulators deal with these changes is going to be interesting to watch.

At three+one®, we’re poised to help you navigate through the anticipated changes in banking. Our liquidity and treasury analysis programs, coupled with rfpPrep®, can help you become aware of how changes will affect you and your organization. This will be reflected in both the institutions you deal with, and how your taxpayers/students will transact with you.

While the world of banking will likely change significantly, the team at three+one® will be consistent, always committed to proactive and forward-thinking technology, liquidity analysis and customer service.

New rfpPrep Site Launch!

New rfpPrep Site Launch!

We are excited to share with you the launch of our new rfpPrep® website!

 

rfpPrep® is the first-ever digital RFP (request for proposal) for public sector & higher-ed financial services.

Reduce the RFP process time by 75% while evaluating financial services options for your entity using an error-free & fair bidding platform. rfpPrep® is an entirely online tool for your needs in BANKING, INVESTMENT, MERCHANT SERVICES & E-PAYMENTS.

Visit rfpPrep® by three+one® to learn how this tool can work for you.

 

5 Must-Do’s to Maximize Shared Services

5 Must-Do’s to Maximize Shared Services

Across the country, local public entities find themselves in the same predicament: trying to do more with fewer resources, smaller staffs, and greater demands.

In today’s environment, these issues are virtually universal, in cities, towns, villages, and school districts within a given county—and adjacent counties.

On top of these constraints is a steady stream of unfunded federal and state mandates that public entities must implement, with ever fewer dollars to cover day-to-day overhead expenses.

It should come as no surprise that more and more entities are looking to work together to eliminate duplication of services and reduce unnecessary overhead. As a result, shared-services initiatives are gaining popularity, ranging from public works, public safety, self-insured healthcare plans, and cooperative purchasing programs.

The ability to join forces can have an immediate and beneficial financial impact. The one impediment is jurisdiction of control. Entities involved in sharing services should have a long-term perspective of outcome and address this clearly upfront—and in writing.

The need to consider or expand shared services may not be desirable, but rather an absolute necessity to survive. This is especially true for smaller entities within larger jurisdictions. In the minds of taxpayers, a proper business attitude is to be applied, rather than an emotional wrestling match over control.

Under a shared-services agreement, the concern of lost identity should not be raised; the initiative is a joint effort in providing/receiving services for the participants’ mutual benefit. In general, the initiatives should focus on saving money and/or generating revenue.

Here are 5 financial shared-service initiatives to consider: 

1. Conducting a universal banking services Request for Proposal. A banking RFP would create a large volume of buying power to use in negotiating competitive pricing on bank fees and deposit rates. A collaboration like this could include villages, towns, cities, school districts, and the county government, all at once. The end result could lead to hundreds of thousands—if not millions—of dollars in savings and or additional interest income. rfpPrep® by three+one® is the first-ever electronic banking RFP (Request for Proposal) service, entirely online and specifically designed to facilitate the bidding of banking services. Visit our rfpPrep site for more resources. 

2. County governments can be a source of purchasing the short-term paper of related entities as they come to market. As local villages, towns, and school districts issue Bond Anticipation Notes (BAN) or Tax Anticipations Notes (TAN), a county could be a bidder of such notes, as allowed by legal statutes, for investment purposes. As such, the county can be an additional bidder, helping to lead to lower rates and greater competitive pricing on cash for investment. 

3. Counties can provide additional resources and expertise through their finance offices in helping smaller local entities identify and manage their cash. It would still be expected that associated entities would control their cash, but alleviate the stress associated in identifying and investing cash. 

4. Combining technology efforts can be effective and beneficial both in financial and banking transactions, especially in the flow and protection of collections and payments. 

5. Finally, consider consolidating tax collection. In the future, all tax collections will be automated. The need to have a counter or have the control of check collection will become obsolete. Having one point of contact for tax payment and options payment can lead to major personnel and banking cost savings. 

Sharing services can be pathway to strengthening the financial well-being of all those involved. Let three+one help you in setting up and managing your shared-services initiatives.  What may seem as a major undertaking can be simplified with through our proprietary liquidity analysis and modeling capabilities.

As always, our mission is to help public entities to do more in serving their communities.

 

Introducing rfpPrep®

Introducing rfpPrep®

Over the last four years, we have encouraged public entities and higher Ed institutions to hold off on a banking services Request for Proposal (RFP) due to the low-interest-rate environment and the burdensome process in conducting a RFP. The value was not there, given the time required to conduct a banking RFP.
Well, that is now changing. With higher short-term-interest rates, new technology, and more banks pursuing public and higher Ed clients, the time has come to start taking advantage of the marketplace.

 

 

 

Over the last month, we have seen bank Earning Credit Rates (ECR) jump to as high as 1.90% in a competitive setting, with savings rates on cash balances north of 2.00%. All of this follows a trend that we see continuing in 2019.

In considering a bank RFP, it is essential that you have a forward-thinking document that reaches the greatest number of the banks in your marketplace. The idea of pulling one out of a drawer from a few years back, or from a neighboring entity, will not serve you well. An RFP needs to reflect your own banking needs, now and in the future. With technology changing so quickly, the ability to conduct a banking RFP is now at your fingertips.

The process to conduct a banking RFP no longer needs to be a burdensome paper-intensive process. With threeplusone’s new rfpPrep®—an online RFP process (at www.bankingrfp.com)that includes a custom-tailored threeplusone liquidity analysis—you’ll no longer have to read thousands of pages of responses. In fact, comparing banking services and pricing becomes an easy “apples to apples” exercise.

Just imagine being able to know which banks have the best services and pricing within minutes from a final bid deadline; what used to take months to perform now can take a couple of weeks.

Under this approach, your time in conducting an RFP can be cut down by 75%, while focusing on the relationship rather than figuring out comparative pricing and confusing disclaimers through reams of paper.

The time has come to determine if a banking RFP is a priority for 2019. If so, threeplusone can demonstrate the power of rfpPrep and the ease of conducting a bank RFP right at your desk.

Your time is valuable and so are your banking relationships. If it has been over five years since your last bank RFP, now might be time to consider a new one.

The results may surprise you, both in ease and in value.

One Size Doesn’t Fit All

You’ve heard the expression “one size” fits all. That may work in some areas but it definitely does not apply when you’re talking about a banking Request for Proposal (RFP). Your entity is unique and you deserve a banking RFP that reflects that uniqueness. “Cookie-cutter” RFPs that come from a template will lack any true color or substance, won’t reflect the individual character of your entity, —and will not likely produce the results you’re after.

One Size Doesn't Fit All

Here are four tips that can help you achieve a successful banking RFP:

1.) Ensure your next banking RFP is data rich, forward thinking, and intertwined with your institution’s ability to have the latitude it needs to be creative, with innovative technology and services enabling new levels of efficiency and cost savings.

2.} Insist that all written responses are limited to 25 pages. Who has the time to read several hundred pages of needless filler? Have your responders describe why they should continue to serve as your banking institution—or how they differentiate themselves in the marketplace. Or both.

3.) Have in-person interviews with the three leading candidates. Such conversations are much more powerful and revealing than words on paper. Go with your personal instinct on the chemistry of the team that will best serve you and your entity’s needs—especially regarding response time to your emails and/or phone calls.

4.) Have one sheet that outlines a clear-cut listing of all bank fees, including the Earning Credit Rate (ECR) and recoupment fees on all deposits. Such a listing will enable you to properly compare apples to apples.

If you feel that you don’t have the time or staff to review all banking services or perform a banking RFP, call three+one. We can provide an in-depth analysis to identify your entity’s specific banking needs, requirements, and specific data that will lead to better RFP responses and necessary pricing information.

We all have unique ways in viewing banking RFPs. Let’s make sure it fits your entity’s size and needs.

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See Us At These Upcoming Events and Conferences:
Ohio GFOA – September
GFOA SC – October
PA GFOA – October