Lots of Opportunities for Banks this year; lots of Risks, too. “Be quick, but don’t hurry.”

August 10, 2020

By Chad K. Fooshee

This quote by legendary coach John Wooden has been one of my favorites since I discovered Coach Wooden.  I used it with my daughter as her fifth-grade recreational basketball league coach.  She was usually one of the faster players but hadn’t yet learned how to control her dribble at the same pace she was running.  Making good decisions quicker than your competition, not just being in a hurry, applies to sports, family, business, and banking.  There are others worthy of the short list:

  • “Everybody has a plan until they get punched in the mouth.” – Mike Tyson (former boxing champion and stealth philosopher)
  • I can accept failure; everybody fails at something. But I can’t accept not trying.” – Michael Jordan (arguably the greatest basketball player of all time, but wasn’t picked to play for his high school varsity basketball team until his junior year)
  • “If you don’t have time to do it right, how will you have time to do it over?” – also Coach Wooden (who never described himself as a coach, he preferred to be called a teacher)
  • “Be patient, but aggressive.” – Even though my daughter attributes this quote to me, I shamelessly stole this one from my son’s much more talented parent-baseball coach.

All great sports figures, who many people remember because they were what Malcolm Gladwell calls “outliers” – they were given opportunities and had the strength and presence of mind to seize them.  Gladwell also makes the statement, “no one – not rock stars, not professional athletes, not software billionaires, not even geniuses – makes it alone.”  Many of the most successful bankers, investors, and other business leaders have applied these quotes throughout their personal and career journeys.

Our country, our economy, and our financial system is in the middle of an “unprecedented” global pandemic, “never before seen in our lifetime.”  Clearly, we should all be flexible but disciplined in how we respond to this COVID-19 outbreak, but the idea of panicking over something that has “never before been seen in our lifetime” may be an indicator that we weren’t financially, physically, emotionally and spiritually prepared when “it” came.  If we hurry too fast, without maintaining control, we may cause more harm than good.  It takes great effort, and the ability to create strong relationships, to become disciplined at being flexible.

Fifteen years ago, I was holding my 7-month old daughter (same daughter, 15 years earlier) one morning when my wife asked me if I was ready for breakfast.  I heard her, but I didn’t respond; I tried but I couldn’t form the words.  I was lapsing into a grand mal seizure, “never before seen in [our family’s] lifetime.”  My wife and “heroine of the Justice League” sprang into action:  first she picked up our daughter (yes, I dropped her) to make sure she wasn’t injured, then she dialed 9-1-1 (thank you, paramedics, for being so responsive), then she started down our list of friends who might be available to stay with the baby and our other two children while she rode in the ambulance with me, then started calling our parents, extended family and church ministerial staff.  My Wonder Woman was quick, but she didn’t hurry; she didn’t rush; she knew the risk was too great to not do it right the first time!

To make a long – story, short: I had a baseball- size tumor extracted from my right frontal lobe and spent several years ingesting what amounts to controlled rat poisoning to fight an incurable disease.  The earliest documented cases of cancer were believed to have been over 2,000 years ago noted by Hippocrates (the Greek “Father of Medicine”).  The greatest medical minds in history haven’t been able to find a cure, but since that frightening event, our family has created a new type of normal and are working diligently to leave our children in a better place than our parents left us – we’re all better prepared for the next time.

In almost every decade since the founding of America, we’ve had multiple “unprecedented,” “never before seen crises”:  World War I, Black Tuesday, the Great Depression, the Dust Bowl, World War II, the Atomic Bomb, the Cold War, the Cuban Missile Crisis, the OPEC Oil Embargo and Energy Crisis, HIV/ AIDS, the S&L Crisis, Black Monday, the Dot-Com Crash, September 11th, Hurricane Katrina/ Rita, the Great Recession, Ebola, and many more.  I’m sure you see the similarities and themes in retrospect, but we cannot forget what got us through those events.  As the heart of our country’s system of financial intermediation, our country’s banks were and are on the front lines for each of these crises (while often receiving blame for not having seen each of them coming).

With every great success story, there is great effort; and there is no effort without error and shortcoming (the U.S. Government vs. NASA vs. Boeing vs. SpaceX competition is a great example).  Four U.S. banks are among the very largest in the world: historic institutions, the Boeings of banking, with average total employees of more than 150,000.  I’m thankful these companies helped build America, and I personally know very-intelligent, balanced, and innovative people at each of these institutions (including Boeing) but it’s hard to get that many employees to move together consistently, with discipline.

We are supremely confident our country will find a way through the COVID-19 pandemic.  We are also confident the next “unprecedented crisis that we’ve never seen before” is on the horizon – regardless of what “it” is or when exactly “it” is going to be here.  In the midst of every crisis, lies great opportunity. And, with every great opportunity, great effort is required; and with great effort, the risk of failure is also great.  In a political landscape that swings from extreme to extreme, high-touch, high-tech, high-growth banks are required to maintain governance that optimizes sustainable profitability while maintaining strong risk management oversight, all while the business of banking keeps pace with digital innovation and cybersecurity, and unprecedented changes in operational, legal, regulatory, accounting, and compliance requirements (all without the deep capital pools much larger banks have).

As our country and financial system must adapt to an ever-changing environment, so should our business.   Ensuring that our firm can offer a holistic approach and skill to address all the changes, ZipTie has made a strategic alliance with Everett Advisory Partners (a financial services firm led by Lisa Narrell Mead). The strategic alliance of ZipTie with Everett Advisory Partners has created one organization with the experience and ability to assist your bank in building your own Financial Crisis and Disruption Management program, so that you are in a position of strength when the financial services industry or your consumer and business customers are threatened by the next unprecedented crisis.  We can assist you and manage implementation and hand-off with today’s most pressing opportunities and risks:

  1. Corporate Governance and optimizing the connectivity of your Business Strategy to key Risk Management, Technology, Operational and Human Resources processes and areas;
  2. Banking as a Service platform to serve more profitably your unbanked and underbanked geographies;
  3. Cutting edge intelligent automation forensic analysis platform to more quickly identify and mitigate high-risk financial transactions, including CFT (for all cash-centric activity);
  4. Implementation of Current Expected Credit Loss method for your allowance for credit losses (from data collection and quality to accounting consultation to reporting and monitoring);
  5. Finance and Accounting Control Framework FDICIA assessment for material business processes, key judgments and estimates, and consistent evaluation of significant, unusual transactions;
  6. Assistance with Human Capital, including training existing staff and/or Executive Recruiting to fill identified gaps.

Be quick, but don’t hurry?  Be patient but aggressive?  Whatever quote motivates you, don’t accept not trying!  And when you do, get the right Team to assist.   We have the Team and Experience that can ensure your success.

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