tag:blogger.com,1999:blog-235433516644980443.post650313798803747619..comments2024-02-26T06:51:11.584-05:00Comments on Jeff For Banks: Small Bank-Big Bank: Spending on People, TechnologyJeff Marsicohttp://www.blogger.com/profile/12153599647481141591noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-235433516644980443.post-34080017230547035922017-08-24T09:32:31.969-04:002017-08-24T09:32:31.969-04:00This comment has been removed by a blog administrator.londonhttps://www.blogger.com/profile/01601204307987594534noreply@blogger.comtag:blogger.com,1999:blog-235433516644980443.post-19157202022275897092017-08-22T11:06:02.667-04:002017-08-22T11:06:02.667-04:00Ron,
You are observant beyond your years. Smaller...Ron,<br /><br />You are observant beyond your years. Smaller banks would gravitate to a larger proportion spent on comp and tech due to their size.<br /><br />When I hear "bank personnel" or some variant mentioned as strategic strengths as often as I do, one would assume that a bank spends more to get better people. Not so in the comp/fte stat. <br /><br />I think what community banks should strive to do is have relatively fewer people that get paid more. To automate repetitive processes. Because paying for an IT solution to auto-balance suspense accounts, for example, is less expensive than paying a staff accountant to do it.<br /><br />That's when you'll see DP expense as a % of op expense go up, Sal+Ben as a % of op expense remain steady, and Sal+Ben per employee trend up for community banks.<br /><br />As a point of reference, USAA Federal Savings Bank, lauded by many for their tech distribution system, dedicates 15% of their total operating expense to DP expense (2nd quarter). <br /><br />Thanks for the comment!<br /><br />~ JeffJeff Marsicohttps://www.blogger.com/profile/12153599647481141591noreply@blogger.comtag:blogger.com,1999:blog-235433516644980443.post-73689574984217631862017-08-22T10:46:06.877-04:002017-08-22T10:46:06.877-04:00Thank you for mentioning me in your post. I mean, ...Thank you for mentioning me in your post. I mean, I know you didn't mention me by name, but when you said you've been poked for using 70s phraseology, I assume you meant me. :)<br /><br />I have a couple of problems with this post. It has to do with your judgement calls. For example, when you say...<br /><br />"The initial news was good. Smaller banks, either under $10 billion in total assets or the smaller group, under $1 billion, dedicate a greater proportion of their total operating expense to salary and benefits" <br /><br />...I wonder, why is that "good"? Couldn't a higher % of spend on salary/benefits be an indication of inefficient, manual (i.e., not automated) processes?<br /><br />You also call out smaller banks' larger % of spend on IT as a good thing. Doesn't it strike you odd that smaller banks are spending more on BOTH people and IT?<br /><br />Jeff, I've looked at bank spending on marketing, and I've found that, as a % of assets, marketing spend is remarkably similar for banks and credit unions over $500m in assets, but actually larger for smaller FIs. <br /><br />I think the reality here is that smaller banks have less line items in their expense sheet, and therefore the % of spend on people, IT, and marketing is therefore higher than it is for larger FIs.<br />Ron Shevlinhttps://www.blogger.com/profile/03329100429467977434noreply@blogger.com