More banks are finding ways to put their data-gathering abilities to good use.
Citizens Financial Group, Bank of America and Live Oak Bancshares are among the institutions that have recently introduced blogs, podcasts and other reports to showcase proprietary data. Those efforts are intended to show clients and prospects that the banks possess a level of expertise that competitors may not be able to equal.
The initiatives come at a time when wealth management and commercial clients are hungry for in-depth analysis of economic data, experts say.
"There's an arms race on in the industry to bring this type of commentary and publish this type of forecasting," said George Calhoun, who teaches business strategy and finance at Stevens Institute of Technology in Hoboken, N.J.
Citizens, of Providence, R.I., introduced its quarterly Citizens Business Conditions Index in late August. The $164 billion-asset company timed the release of its first report with last summer's creation of a
The index "really does help reflect a national profile,” said Tony Bedikian, Citizens' head of global markets. "We've gotten great feedback. The data is very granular, down to the state level. Many of our clients have not seen data as specific as this."
The $4.6 billion-asset Live Oak, in Wilmington, N.C., launched its quarterly Live Oak BusinessPulse report last year. Live Oak reaches out to nearly 3,000 companies, said Huntley Garriott, the bank's president.
“We’re always looking for ways to try to add value, so providing some insight and analysis, whether it’s economic conditions, credit outlook, things like that, felt like a natural extension of what we do,” Garriott said. “It’s been really well received.”
Creating an economic index using internal data can "be a very powerful instrument," assuming a bank can distinguish its research from the array of reports that investors and clients can already access, Calhoun said.
“Only a handful" of indexes "manage to break through public consciousness," Calhoun said. "With any new product, you’ve got a long, hard path to create a brand that's going to penetrate the broad market consciousness.”
A number of banks already offer market indexes.
Comerica in Dallas regularly compiles indexes for states in its footprint, including Michigan, California and Texas. Bank of the West in San Francisco publishes a quarterly economic outlook for California, while Wells Fargo offers a monthly national outlook.
At Bank of the West, Chief Economist Scott Anderson and a team of four economists issue daily and weekly reports, in addition to the quarterly California Economic Outlook. The work keeps them busy, but Anderson said he is confident that offering broad-based economic commentary helps differentiate the $91 billion-asset Bank of the West from rivals.
While Wall Street firms largely emphasize macro issues, Anderson said his team's research caters to small and midsize businesses that are concerned about issues such as retail sales, consumer confidence, population shifts and market-based comparisons.
"This is a product you usually don't get on Wall Street," Anderson said. "They're focused on trying to figure out whether the Fed is going to raise or lower interest rates by a quarter point."
Citizens is targeting many of the same types of customers with its report, and Bedikian said the index could also help the company's bankers.
“It helps our bankers understand how things are going within their territories,” Bedikian said. “Everybody wants to know how we're doing."
Smaller banks are also offering more robust research to remain competitive in commercial lending and wealth management.
The $4.8 billion-asset Bryn Mawr Bank Corp. in Pennsylvania has been retooling the presentation of its research under new Chief Investment Officer Jeffrey Mills, who joined the company in August. Bryn Mawr, which already has a strong private wealth business, wants to make its commentary more accessible as it aims to fatten its share of the institutional wealth market.
“We do things in the institutional space, but we feel there’s a lot of opportunity there," Mills said. "We want to demonstrate to those sophisticated clients that we're similarly sophisticated. Putting together high-quality research is a good way to do that.”
Mills immediately pushed his team at Bryn Mawr to produce shorter, more incisive commentary. In October, he formatted Bryn Mawr’s quarterly Market Insights report as a top-10 list, something the bank had never done. Beginning this month, the company’s weekly market summaries will feature more tightly focused bullet points, along with more charts.
“Sort of easier to digest, at least in my opinion,” Mills said. “I feel like today, people consume information in different ways. It’s very unusual that someone will sit down and read a 10- or 15-page document that discusses the market, however interesting it may be.”
The effort also sharpened Bryn Mawr's data interpretation.
“It really helps us intellectually stress-test our ideas internally,” Mills said. “Just the act of writing the pieces really helps us vet the way we’re looking at the markets and, in turn, how we’re going to be positioning client portfolios.”
Live Oak is working with Barlow Research Associates in Minneapolis to produce its BusinessPulse reports. Partnerships make more sense for a smaller bank than attempting to do it all in-house, Garriott said.
“We don’t have economists on staff like the big banks,” Garriott said. “Barlow is really good at doing this kind of stuff, so it made sense to partner and leverage that expertise."
Digital channels are becoming more a prevalent way to showcase this sort of insight.
Bryn Mawr is planning a podcast tied to the release of its next quarterly report, Mills said. And more webinars are in the works.
“I think you can reach clients in many different ways,” Mills said. “You need to try to explore those avenues. ... It’s not all just paper.”
“We’ll be doing more video and audio broadcasts,” Anderson said of his plans for Bank of the West. “I think people’s attention spans are probably narrowing. Our inboxes are inundated with millions of reports and marketing materials. We don’t want to get lost in the shuffle.”
Banks are not only competing with each other as reliable online data becomes more accessible.
“There’s a lot of very good free material,” Calhoun said. “You have to approach it critically, but I’m impressed … at how much high-quality material is available.”
“There’s a lot noise out there and everyone’s a blogger these days, publishing their thoughts and views," Anderson said.
"I feel there’s a thirst for quality," he added. "One of the reasons people gravitate toward economic research is we try to be a fair arbitrator of the facts. … That's something I think our clients appreciate and value.”
