If we were to place community banks along a spectrum of analytics sophistication, we'd likely cluster them around the "primarily uses spreadsheets" entry point. But not the Bank of North Carolina (BNC).
A couple of years ago, CIO Michael Bryan attended an IT financial services conference, learned about analytics software from SAS, and came away thinking, "This is what I have to have."
Bank of North Carolina
Many months of due diligence followed, Bryan told me during an in-person interview at last month's SAS Global Forum Executive Conference
in Washington, D.C. One of the first proof-of-concept (PoC) projects focused on a major pain point -- quarterly loan reporting to the US Securities and Exchange Commission (SEC), he said. "Because of the variety of loan types we have, just to do a loan footnote on a 10-Q report was taking three weeks, manually."
As an analytics starting point, BNC built dashboards that give commercial lending personnel access to information like loan growth and profitability growth, as well as risk metrics such as past-due loans and critical-loan exceptions. In the process, the bank has cut the time for that 10-Q report preparation down to four days, Bryan said.
In addition, BNC is defining goals and incentives for the 400 or so people in the production group. Next quarter, these will be added into the dashboards so everybody can track their progress and compare against peers.
BNC is going to start doing what it calls "totem-pole analysis," ranking branches from best-performing to minimum-performing. "We think, if branch managers can see their numbers and where they are on risk metrics, then they'll be more aware of what they're doing on a daily basis and be more customer-centric," Bryan said.
This is a new level of access not just for BNC but for community banks in general, which typically rely on spreadsheets, he added. "This access to data gives us a way to roll out goals and incentives at the community-bank level, and do all the trending and acquisition reporting we have to do for the SEC."
Later this year, BNC will add operational dashboards to its analytics portfolio. These are expected to be particularly useful for the operations managers involved in the bank's merger-and-acquisition business, which is quite active. BNC, which as of this month operates in four regions, does about three acquisitions a year, Bryan said.
As operations have grown more complex, managers haven't been able to do all of the account-level validations they'd been used to doing previously, Bryan said. Availability of the operations dashboard will help. At a glance, they'll be able to see when an account of loan has been set up in error, for example.
Awareness of the analytics capabilities is starting to grow among line-of-business owners, Bryan said. "They look at a dashboard and say, 'Oh wow! I didn't know I could have that data.' This is making their lives so much easier -- and now they're starting to ask, 'Could SAS do that?' "
Bryan hopes to simplify the data reporting even more using data visualization software. Toward that end, this week BNC launched a proof-of-concept test of SAS Visual Analytics, Bryan said.
The expectation, he explained, is that the "plain English and drag-and-drop capabilities" within the software will make running "what-if" scenarios quick and easy. Today, business owners are constrained in the number of ad hoc reports they can run; keeping track of all the appropriate codes to enter is quite challenging, for example. "To us, an 'acquired loan' means 'X,' but in the background, there might be 14 codes that describe that loan type. With the drag and drop, people won't have to know all those codes and we know our data will be accurate."
Visual analytics should prove useful as the bank brings in its acquisitions, too, Bryan said. "With all these acquisitions, we don't always have a lot of time to do a lot of data cleansing. Visual Analytics will help us look for errors and do more cleansing."
As BNC continues its analytics evolution, Bryan said he feels it's become a preferred employer -- not only for future hires but also existing personnel. "If you're in banking, and enjoy analytics and digging around in the numbers, going anywhere else would be a backwards step."
And the C-suite is among the biggest fans. "Everybody in the C-suite saw the potential value in analytics, but were apprehensive that we could pull it off. And now all they can talk about is SAS, SAS, SAS."
Do you think the community banks in your area would do well to think about using analytics, as BNC has? Share below.
— Beth Schultz, , Editor in Chief, AllAnalytics.com