Volatility management is a component of banking that should always be on management’s radar, especially after recent bank collapses. David Sayers, Chief Financial Officer at Maine Savings, believes by prioritizing internal and external continuous education and improvement, credit unions will optimize and become more trusted by members. 

Join us as we discuss: 

• Volatility management in banking
• Stability and education fostering trust with members
• A culture of continuous internal improvement

Volatility management in banking

For Sayers and his team, creating symmetry throughout their balance sheet is key during volatile periods in banking. 

“Two years ago, we would have been hard-pressed to find anyone in the CFO role across the end stream that would have predicted that rates would have gone up close to 500 basis points in 15 months,” Sayers said. “And so being able to anticipate that and prepare for that is difficult.” 

Sayers' philosophy has been to match assets and liabilities to reasonable extents. “We don't speculate on what could happen tomorrow, we try to make decisions that are in the best interest of the institution and our members based on what the circumstances are today,” he continued.

Stability and education fostering trust with members

No one could have predicted that SVB would have a substantial run in such a short period, losing high percentages of deposits in seemingly the blink of an eye. Almost any ALM running “What if” scenarios would tag that occurrence as a low possibility. 

All “What if” scenarios aside, it’s the trust built with members that counts the most. And for that trust to take root, there must be education and stability regarding expectations. Credit unions may be in an excellent position to catch consumers on a flight to safety as other institutions feel the strain of the current climate. 

“I think this could be something that pushes members or consumers, pushes deposits, towards credit units,” Sayers said. “That could be something that alleviates what is currently a liquidity situation going on for most.”

Being transparent with members

Providing that safe place to land takes transparency. For Sayers, that means consistent messaging to current members alongside marketing material. 

“Transparency is important whenever we have the opportunity — whether it be through social media, print media, annual meetings, newsletters, etc.,” he said. “We try to be as transparent as possible and put the message out to members, always trying to educate them on what's going on in the industry.” 

A culture of continuous internal improvement

Building trust starts with team members and branches into consumers. At Maine Savings, they don't measure success based on widgets sold. Instead, they focus on the number of assisted members.

“When it comes to goals and objectives, we've tried to steer away from giving somebody a hard goal,” Sayers said. “We know what the expectations are, we explain to all of the staff in production roles, ‘This is what we would hope for this position that we can generate for volume,’ but we don't focus on quotas.”

By switching to a key performance indicator system, they hone in on what is most critical to the establishment and what makes the most impact for both employees and members. 

“The most important one is we want member feedback,” Sayers said. “So after certain transactions, the member would receive a survey from us that says, ‘Tell us how we did, how well did you feel that you were served?' And they’re able to rate us on that.”

Internally, Maine Savings' employees have a similar survey geared towards co-workers to ensure healthy support and collaboration cross-departmentally. 

“We want to enhance the member experience, internally and externally,” he continued. “And if we do that, and we become known, we have a strong presence — our members rate us highly in terms of the service, but we're trying to say, ‘How can we be better? How can we be better tomorrow than we were today? And how can we make that a positive experience for you?’”

With that data, they can determine where their processes fall short and how to improve processes to align with member expectations to move towards an overall more cohesive internal framework, ready to be that safe landing.

Stay tuned for new episodes every week on the Leaders in Lending Podcast.