Inside the Mind of the Bank CFO
May 3, 2015 9:00 PM
In March, American Banker Research conducted an in-depth online survey of 52 bank chief financial officers from American Banker's readership as part of our inaugural C-Suite Series. The respondents were from banks with less than $10 billion in assets, with vast majority coming from banks with $100 million to $1 billion in assets. They were asked how they spend their time, where they would like to take their careers and how they are handling the unprecedented challenges of today's banking environment. Among the insights revealed from the survey: Basel III hasn't been a big deal for the top line yet; few CFOs are focused on mergers and acquisitions; and many of them consider their roles strategic. Highlights from the research follow.
Age Is Nothing But a Number
Age Is Nothing But a NumberAlthough nearly half of the respondents were more than 50 years old, 20% were 40 or younger. The youngest respondent was born in 1982 the year that Penn Square Bank failed.
Basel's the Least of Their Worries
Basel III is a hot topic, but the vast majority of bank CFOs say Basel III has no, little or only a moderate effect on their banks' ability to increase revenue. The results may be unsurprising given that the respondents were from smaller institutions. Larger bank CFOs may have had a decidedly different take.
Slicing Up the Schedule
CFOs spend more than half their time, on average, on accounting, financial reporting and analyzing and modeling the financials. Surprisingly, while M&A is a hot topic, CFOs allocate a very small portion of their time to it. Information technology was another area where CFOs are spending their time.
Heightened Priorities
The importance of regulatory compliance has increased since a year ago, two-thirds of CFOs said. Respondents were also asked to consider the priority of things like corporate governance, budget management and serving as a strategic advisor. Very few said that any of their priorities had decreased.
Keeping up with the Regulators
Overwhelmingly, CFOs say the biggest challenge they face is keeping on top of new regulatory expectations. Adapting to changing information technology requirements outpaced the other choices for the second biggest challenge.
Primping while the Fed Ponders
Nearly all of the CFOs said their bank is doing something to prepare for higher rates. About three in four of those say they are trying to get more core deposits, while more than a quarter say they are leaving loan business on the table and several others said they are also doing the same with investments.
A CFO by Another Name
"Financial" might be in the title, but CFOs clearly view their positions as strategic. Slightly more than a third picked either leader of strategy execution or strategic advisor as the term best describing their role. Roughly a fifth of the respondents see their job as a problem-solver. The CFOs were offered "visionary" or "risk taker," but no one picked those options.
Job Satisfaction
Looks like most of the CFOs plan on staying CFOs, but 13% say they want to be a CFO of a larger organization. A good chunk of the remaining respondents say they are gunning for the top seat while a similar amount are looking at something different or entrepreneurial. Of course, a couple of CFOs are eyeing retirement, too.
Piece by Piece
Banks are subject to a lot more capital requirements these days (Basel III, the Collins Amendment, etc.) and half say they are looking at each requirement on a standalone basis. A small group is taking on a matrix approach, but 38% are still determining the best way to handle it.
