Five 2022 Budgeting Tips for your Community Financial Institution
Budget-setting is a challenging task for any business due to the problems inherent to making decisions based on imperfect and incomplete information. Projections often end up being based on past results, which may be accurate enough during periods of stability (which feel rare enough these days), but the future tends to hold surprises. Still, there are a few smart directives that’ll help illuminate even the broadest scope of budgeting.
1) Know your Objectives.
Stay focused on your strategic objectives and do a thorough scan of the options that can deliver on those objectives. Be sure those objectives have a returns case (investments should be contributing toward institution growth) and absolutely build out those cases. This linear planning will help provide a clearer, vision for fulfilling business needs.
2) Be on the Same Page
Department leaders will generally know where to focus resources within their departments or projects, but budget-setting is an organization-wide endeavor! An organized, cohesive effort will help ensure each team can maximize impact spending on the vision for the whole institution.
3) Problem-Solving Inside AND Out
Community financial institutions will always need to bring in new cardholders, new accounts, and new deposits; those are goals that can be written in Sharpie instead of Expo. As goals increase, so do expenses – every new employee brings in costs beyond salary, including training and benefits. Can we get the same (or better) outcomes with less cost?
4) Get the Most for your Money.
Don’t hesitate to be a demanding negotiator when dealing with vendors and partners. When considering a new product or service, demand the best deal — don’t entertain vendors who aren’t up front with their pricing. Also, be sure to check current contracts, as there may be new price breaks, available discounts, or opportunities to renegotiate.
5) Don't Let 'Risk' be a Swear Word!
Many veterans of the banking space will note the complicated relationship between financial institutions and fintechs. Innovation can be scary in a traditional banking environment, but it is the leaps in technology that often drive innovation and cardholder behavior (mobile banking is a must-have, but as of writing, the iPhone hasn’t even celebrated its fifteenth birthday!)
Unfortunately, there is no single correct playbook for budget setting. To read the full eBook on Setting Your Best Budget, download here!