Curry: Growth Strategies for Banks in Unprecedented Times

Stephen Curry

The unprecedented times of 2020 are having a dramatic impact on the community’s banking institutions. Businesses with proper controls and growth strategies in the following areas will set themselves up for success in the year ahead and beyond.

Optimize digital banking

The pandemic has taught us to work remotely. Both business and private customers expect financial institutions to meet their needs without personal contact.

Banks need to optimize technology to support existing businesses and scalable growth. Although most banks offer some type of online solution, most have limited features and are poor substitutes for personal banking. Today’s customers expect to be able to transact anytime, anywhere. Deploying new solutions is critical for financial services organizations.

Retail lobby services and the associated staffing costs are being replaced by remote/mobile deposit capture, mobile payments, advanced ATMs and mobile account openings. With the right technology, these changes offer opportunities to improve efficiencies, reduce costs, and enhance the customer experience. PPP has proven that customers choose responsive service and business models need to adapt.

credit growth

Credit growth is critical to protect net interest margin (NIM) in 2021. With near-zero interest rates on short-term investments and few prudent long-term investments yielding more than 2%, loans are the only solution to keep the NIM in the normal 2-3% range.

In some cases, credit growth may only be due to new initiatives. Responsive local banks with strong lending and treasury platforms are poised to attract new customers in this environment. In some cases, investing in syndicated loans, aligning and building teams and expertise by industry, or building SBA skills can be effective. Careful balance sheet diversification is imperative.

The pandemic has transformed the business of borrowers across all industries. After the pandemic has passed, it is impossible to estimate the extent of the economic damage and credit risk that banks will face. Commercial real estate valuations in the office, residential and retail sectors have fallen sharply (and will continue to fall) and small businesses are facing painful realities.

Banks need to be proactive in helping clients with innovative restructuring packages, arranging/outsourcing asset management in difficulty and taking action against portfolio risk. Successful banks must skillfully balance simultaneous start/stop strategies.

Regulatory Risk

Special lending programs such as Residential Forbearance and PPP create operational risks even for well-managed banks. Many loans under these programs, or loans that a bank restructures, will remain on the books for some time. It’s important to have a roadmap tracking compliance with each program. The mortgage industry bears the scars of compliance risks in servicing government loans.

Know-Your-Customer rules were designed for personal banking, not for a mobile world. Banks need to rethink compliance rules and security tools in a world where customers manage banking relationships online.

In our new normal, strategic decision-making, continuous innovation, and effective governance are the key ingredients to achieving long-term success. In the future, financial institutions must strive for a well thought-out strategy with disciplined implementation in order to deliver working solutions.

Stephen Curry is CEO of Endurance Advisory Partners (

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