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Wall Street Journal Reports Major Cuts in Smaller Banks

November 30, 2011

The 11/30/2011 Wall Street Journal article Ax Falls at Smaller Banks by Dan Fitzpatrick and Rob Barry has unsettling numbers.  The article points out that smaller banks are much less efficient than their larger counterparts or institutions with $10 billion plus in assets.  “In the third quarter, about 76 cents of every $1 in revenue at banks with $100 million or less in assets was consumed by expenses, FDIC data show.  At the biggest banks, the figure was 58 cents.  The efficiency gap has widened by 50% in the past decade.”  The article also has an all too familiar quote from an executives expressing the difficulty of the reported workforce cuts.  These are tough times for the financial services industry.  While cutting labor cost is a harsh reality, a more grim reality might settle in for those institutions that sharply reduce branch employee levels without taking into account customer service.  Two recent white papers by FMSI, The 2011 Teller Line Study and The Workforce Utilization Study, reveal the steps required for financial institutions to properly manage their workforce reductions—taking into account customer service.

Significant and sudden layoffs are in most cases a last resort for community institutions.  Layoffs can be avoided by properly managing a workforce with an outsourced workforce management solution.  Using these tools allow institutions to naturally reduce their workforce through attrition.  The in-depth reporting coupled with schedules incorporating powerful forecasting, can help managers with this month-to-month process.

Outsourced workforce business intelligence solutions, like FMSI’s The Teller Management System™, provide a streamlined online scheduling module that optimizes teller staffing based on forecasted transaction volumes.  TMS helps banks and credit unions gain better control of schedule preparation and address the need to minimize labor costs without sacrificing customer service.  On average, banks implementing TMS realize a $30,000 annual savings, per retail branch.

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