strategic planning Issues
STRATEGIC PLANNING ISSUES:
As you and your team identify and assess key issues, think of these issues not just in terms of "strategic" but also "long range" - actions that you need to take over the next five years or so. An example of a long range issue may be what investments are needed for computer applications over the next five years and how do you prioritize and align with your overall strategic objectives.
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When will current U.S. economic expansion end?
What will happen to economy in 2020 and beyond?
Economy – Positive Factors
Solid GDP growth
Continued job growth and low unemployment
Strong consumer spending
Low interest rate levels
Economy – Risks & Uncertainties
Weak business investment
Global economic outlook and trade uncertainties
Rising federal deficit spending and debt
Inverted interest rate yield curve
How will net interest margins hold up with this flat or inverted yield curve?
What if the yield curve remains flat or inverted for extended timeframe?
2020 Planning Scenario
Bank 2020 Planning Checklist
Community Bank Leverage Ratio framework opt-in decision by Q1 2020 Call Report filing.
Loan growth: slower than 2019.
Deposit growth: with low interest rate environment, moderating growth.
Loan quality: remains solid, except for agriculture.
NIM and spreads: with continued flat yield curve, margins will be under modest pressures again.
De Novo Banking
COMMUNITY Bank Regulatory Relief
Are you preparing for the upcoming LIBOR transition to a new reference rate?
Are any of the drivers of your local and regional economy undergoing any stress? Growth?
Is this a short-run issue - or is this the long term direction?
Commercial real estate
Housing and residential real estate
Population growth or decline
Has the Fed paused its interest rate normalization program for the remainder of 2019?
Or is weak and uncertain economic conditions positioning the Fed to continue to lower interest rates?
And, if yes, how are these weak and uncertain economic conditions going to impact your local market?
How will your strategic plan address key risks identified over your planning horizon?
Increased merger and acquisition activity
Competition from non-financial and fintech companies
Loosening credit underwriting standards and practices
Commercial real estate lending and concentrations
Operational risk due to cyber threats
Reliance on third-party service providers
Bank Secrecy Act compliance
Compliance with multiple new or amended regulations
Interest rate risk with changes in interest rates and the yield curve
Effective change management practices when implementing new regulations, products and services and emerging technologies
Potential LIBOR discontinuation and replacement
How will continued developments in technology impact your customers, your competitors and your bank?
Technology has always been a key driver of change - and success - in banking. And change in technology continues at a rapid pace.
The world that you operate in today is digital, mobile and real time - is your bank positioned for this?
How do you keep up with such continuous change?
Are you or your vendor partner investing adequately in your IT systems and future technology?
How are new fintech companies impacting you today - and what are you hearing about the future?
Most importantly, what are your customers telling you regarding their preferences for product delivery, convenience, mobility and information?
Financially what can you afford to invest in technology? Can you afford not to make these investments? How can you partner to share in technology costs and investments?
Have you developed and documented a 5-year IT plan and "road map"?
Are there areas of significant investment and capital expenditures that need to occur over your planning horizon?
IT systems and applications
New facilities or facilities re-branding / signage