Professional associations have always touted the benefits members receive when they pay their dues. But America’s Community Bankers will offer a new benefit that may actually help banks increase their bottom line.

The Peak Performance Network will take the ACB’s two-year-old, paper-based financial analysis tool one step further into the Internet realm.

On an annual basis for the last two years, the ACB Partners, a subsidiary of ACB has provided to its members a 75-page financial analysis taken from members’ call reports to help them compare what they are doing in relation to peer institutions. The analysis helps member banks enhance strategic plans by analyzing what high-performing banks are doing. The new offering available on the Web, besides enabling 24-hour access to the information, will be updated quarterly.

According to ACB Partners Chief Executive Officer Mike Potter, “For the rest of the year, they will be able to go online at any time and compare themselves to a defined group of high-performing, strategically similar organizations. Or they can go in and name their own peer group. They can set up multiple peer groups and save them for future reference and do an even more extensive analysis – financial diagnostic – than was provided for them over the last two years.”

In order to provide this product, ACB has partnered with BancIntelligence.com, a spin-off of U.S. Banking Alliance, which generated the paper reports for ACB.

According to Steven C. Cotton, president and CEO of the company, the site – launched in October – provides “a consultative tool that gives [bankers] an overall view of where they are deficient,” he said. Clients have access to four main products, including BancAnalyst, which Cotton describes as “a decision support product that allows [bankers] to come in and have their strengths and weaknesses analyzed.” That occurs through comparison with other peer organizations. The BancChannels product on BancIntelligence.com provides information to the bank that can be customized. The information provided includes news items, stock quotes and loan and deposit rate reports.

Although there are a number of peer analysis services available for sale to financial institutions, the service provides a level of detail that is very important in determining strategy, said Potter.

“One of the challenges for a banker in evaluating peer-based financial information is that you have to be very careful who you’re comparing yourself to and why,” said Potter. “Most of the peer information that’s out there in various forms is generic. If you’re a $200 million community financial institution, you might be comparing yourself with people that were between $100 and $500 million and it would all be lumped in together. A couple of thousand banks in that asset-size range are all along a continuum of various strategies.”

The results of such a comparison can be disastrous, said Potter. “Let’s say your strategic emphasis is that you’re a retail bank. You have a broad product range, you have a large branch structure, you have a high brick-and-mortar cost and personnel cost. You’re comparing yourself to other banks just because they’re the same size but might have a totally different strategy. They might be a wholesale bank … they might be heavy into securities or insurance or leasing or have an entirely different focus. When you do that type of analysis, unfortunately you can be drawing, potentially, a dangerously wrong conclusion,” he said.

The value of the Peak Performance Network product, said Potter, lies in the client’s ability to structure its own peer group with its own set of attributes.

Potter predicts the online version of the financial analysis tool ACB had previously provided to its 1,200 member institutions will be successful when registration packages are received by members around the first of the year.

“This has been a very popular benefit of membership for the last two years. Members have come to sessions in conferences that have been built around that once-a-year paper version,” he said.

Another portent of success is what sets it apart. “If I had to sum it up, we think we’re very differentiated in terms of our analytics,” said Cotton, adding that other portals don’t provide such customizable options.

ACB Expands Analysis Tool, Puts Performance Net Online

by Banker & Tradesman time to read: 3 min
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