Chris Nichols—Director of Capital Markets at SouthState Bank and author of the “Banker to Banker” blog—recently addressed the critical need for product managers in community banking. He analyzed the organizational importance of this role in an interview conducted by Keith Daily, Principal, Banking & Fintech, Travillian.
According to Nichols, a major issue in the banking industry is the lack of emphasis on products and customer experience. He states, “Most banks don’t focus on the product and don’t focus on the customer experience. As a result, they lag.”
The Role and Importance of Product Managers in Banking
Nichols highlights the strategic dangers of underperforming. “If you produce under your cost of capital, you can’t attract new capital. It’s one of those signs that you’re going to go out of business,” he explains.
He asserts that having a dedicated product manager who focuses on profitable products and customer needs can drive success. “If you have that accountability at the product level, all else follows,” Nichols maintains.
Overcoming Resource Constraints in Product Management
For smaller community banks that may struggle to afford a dedicated product manager, Nichols suggests looking for talent within or hiring individuals with proficiency outside of traditional banking. “No matter what your size is, hiring for proficiency in something other than banking can be a step in the right direction,” he advises.
Training and development are also crucial. Nichols emphasizes the importance of thinking holistically about sales, marketing, and product applicability.
Building a Culture of Innovation in Community Banks
Nichols points out that many banks underutilize their core providers’ capabilities. He encourages banks to be proactive and explore all available features. “Work with your cores to figure out what you need, whether it’s card controls or better payments.”
In assessing the current menu of capabilities, Nichols identifies one as key in today’s environment. “Instant payment is a game changer for everyone,” he says.
Moreover, fostering a culture of innovation and adaptability is essential. Nichols advises banks to engage with new technologies to stay relevant. “Encourage your bankers to go hands-on with new technologies like AI,” he suggests.
Getting Started with Product Management
To start implementing product management practices, Nichols recommends focusing on high-return areas like deposit accounts. “You’re not going to lose that on a monetary basis,” he assures. Identifying current employees interested in product management can be an initial step before building a full team.
Product Management for Community Banks
Nichols concludes by emphasizing the strategic importance of product management in community banking. “If you look at the success of Chime or Apple in banking, you see the innovations they’ve done and how they’ve driven growth. All else follows.”
By adopting product management practices, he infers that banks can significantly enhance their performance and customer engagement.
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