Conquering Your Core System's Shortcomings


While reading about the Naval Academy freshmen attempting the Herndon Climb recently, we couldn’t help but liken it to how bank marketers have to face major obstacles—like their core system—to be successful.

If you aren’t familiar with the Herndon Climb, it’s when the Naval Academy freshmen (also known as plebes) work to scale a greased, 21-foot stone monument to capture a cap that has been placed on top. It is the ultimate test of the teamwork and perseverance taught during the Naval Academy’s plebes’ first year. They don’t quit until they accomplish it – and it is a major milestone that leads them to their subsequent training and future military career.

So, what’s the connection?

Sometimes, a core system can feel like a steep, slippery, uphill climb requiring great strength and creativity to find a way over, around or through the challenges in order to achieve customer satisfaction and robust organizational growth.

If this is the challenge that you are facing, take a minute and find comfort in knowing that you aren’t alone. In fact, a recent NTT research study found that 2/3 of bankers identified at least one major challenge with their existing core deposit banking systems. Now, let’s consider how you can use teamwork and perseverance to find your way to greater success.

 Here are a Few Ideas for Getting Over, Around, or Through the Obstacles of your Core System

Claim a Seat at the Core System Table Don’t let your core system be seen as simply a technological or operational function. Make sure it does what EVERYONE needs it to do. It’s a key driver in marketing and customer experience, and all interested parties and users should be present and have a voice when core system decisions are being made.

One of our clients recently proceeded with a new version of core software that also included valuable service screens to help diagnose and solve customer service issues. However, they didn’t involve the frontline staff in the plan and implementation—and went live with the new system, but without changes to the service screens in place.  This resulted in problems ranging from fixing payroll issues to difficulty opening CDs.  Customers were impacted, productivity was affected, and the bank employees were uninformed and frustrated. With the right people involved, this wouldn’t have happened.

Probe. And Be Persistent. When your core is managed by an Operations or IT department, valuable information often ends up siloed within the core and within the bank. We know of a high-performing credit union in the Midwest that actually created a corporate initiative to counteract that. It involved all areas of the organization, with each department creating a wish list. An expert from the core provider then interviewed the participants and discussed what existed—or what could be built to address the company’s needs.

The credit union discovered new functionality, as well as better ways to use what they had. For example, the marketing department expressed its desire to add a cross-functional communications preference field to satisfy operational needs while also improving targeted marketing efforts. The core representative confirmed the limitations of the operationally-oriented solution offered, but then gave advice on a simple and smart way to program a broader solution within the system.

A process like this can be valuable to your provider as well, as their evolution is essential.  If they are paying attention to the changing competitive environment and your unfulfilled needs, they can be improving their offering—and communicating it more effectively. 

Find the Suppliers who are Doing What the Core System Can’t. For all of the things that your core system provider can’t offer, there are many other companies out there ready to successfully address those challenges. Online account opening, an expert digital offering, automated onboarding and “next best” cross-sell: There are other suppliers for all of that. With the right approach, success can be found. (We’ll share tips on how to select the right supplier in a blog post next month.)

At a recent Galapagos Marketing customer forum, one of our outside presenters speculated that we may soon get to a place where a financial institution simply shops a series of cloud-based apps that can truly connect and offer the required functionality, making it easier to stay competitive without overhauling an entire core to do so.

Sometimes, a Band-Aid is the Answer. As an example, there are “online account opening tools” that look like an online experience to the customer but require your operations team to actually open the account.  Before going this route, it makes sense to explore online account opening tools that will actually integrate with your system.  But if none of those are feasible, there are times when a band-aid beats the alternative of no viable offering on the horizon.

Don’t underestimate the value of your involvement in core selection, operation, enhancements, and even replacement. It could make a significant difference in the value your system offers (or, on the flip side, the challenges it creates).

Striking The Right Balance: Smart Overdraft Solutions


A financial institution in the Midwest engaged Galapagos Marketing to analyze their checking product line-up. Because one of the goals for the redesign was to increase fee income, we broadened our analysis for this effort to include a review of their overdraft fee strategy. 

The goal was to ensure that they had a solid overdraft strategy in place, that it was being applied appropriately, that it was operating within the current regulatory environment, and that it was a successful configuration for the bank while also remaining a reasonable program for the customers.


To ensure a thorough review, we began by understanding what the current process was, as well as the strategy behind it:

  • What are the rules?
  • How did it align with the bank’s overall customer strategy? 
  • How often are fees overridden…and why? 
  • Do these reviews involve manual processes?

Once we understood the bank’s current procedure, we looked at:

  • The competitive environment
  • The bank’s desired approach, in terms of both philosophy and value
  • Customer behavior and needs

Then, we dug deep into the data:

  • Our calculations and analysis were designed to find opportunities and consider a broad range of scenarios that were in tune with the bank’s larger customer strategy, that satisfied the current regulatory environment, and that would be intuitive to both the internal staff and the customer.


  • The bank was waiving more overdraft fees than expected. Top-performing community financial institutions have collection rates of 95%; they were below that average, and also continuing on a downward trend.
  • There was a significant level of arbitrary and discretionary waiving of fees not guided by procedural rules.
  • Waiving those fees involved a time-consuming, manual process that further eroded profitability.
  • There was an opportunity to increase fees and, correspondingly, income—while still maintaining competitiveness and the integrity of the overall customer strategy.

We understand the desire to balance increasing income with being as customer-friendly as possible. It was no surprise that differing opinions existed within the organization regarding how the fees should be handled, as well as how fee changes might be viewed from a regulatory standpoint. To effectively address this, we considered multiple calculations/scenarios and provided a middle-ground recommendation, along with other options, to ensure we effectively represented the impact of the different decisions being considered.

The bank is finalizing their decision, and we will be working with them to implement their updated fee strategy effectively.  This straightforward analysis will increase the bank’s fee income. In fact, with minimal effort, they could be on track to increase it by more than 10% annually.

Interested in exploring your organization’s fee income opportunities? Wondering if it’s time to explore a product redesign?

We would be happy to discuss our thoughtful approach with you.

What to Do When Mortgage Production Falls: Six Strategies for Growth


Mortgage originations were down nearly 20% in the first quarter of 2018. This followed a decline in 4th quarter of 2017 and represented the lowest quarterly production level since the end of 2014, according to Inside Mortgage Finance.

We can talk about the “whys,” but none of the reasons are likely news to you: higher interest rates, first-time home buyers scared away by higher home prices, and the dread of participating in what can be a cutthroat process in a sellers’ market—as just-listed homes receive multiple cash offers on the first day and end up selling well above listing price. Add in the fact that annual mobility rates within the U.S. seem to be stuck at a postwar low rate of 11%, and the listless market is no surprise (Source: U.S. Census).

Even before this downturn, you may have found yourself facing a more competitive selling environment.  Mortgage providers have gotten more aggressive in their acquisition programs in recent years, leaving you working against more competitors, more attention, and that ever-present issue of enhanced technology.  How can you compete?

Many of our clients are successfully doing so, despite the factors noted, with the implementation of strategic and tailored solutions that reflect the conditions in their areas and the people in their market.


  1.  If home prices are rising in your area, look for prospects who might refinance to eliminate their PMI, lower their payment, or shorten their term. The financial benefit you can provide to these customers often outweighs a higher interest rate.
  2.  Increasing home equity also gives you the opportunity to find customers who would like to access extra cash. (A recent HELOC expansion program we implemented delivered an ROI of more than 3.0, and a separate program to spur use of inactive HELOCs resulted in a phenomenal ROI of 99.0.)
  3. Even if the interest rates aren’t reflective of a great refi market, you likely have pre-retirement customers and prospects who are realizing that it’s time to get more aggressive about paying down their mortgage. Look for ways to help them lower their rate and shorten their term.
  4. Watch for short-term opportunities—and have a campaign or program waiting on the shelf. When mortgage rates hit 5%, ARM products typically become immensely popular.  If you plan now, you can be first to sense the altered demand and quickly have your program in the market. Alternatively, in some markets, Jumbos afford opportunity.
  5. Increase outreach to centers of influence–particularly realtors and builders. Strong relationships with these individuals can boost pipelines of profitable new business.
  6. Commit to your course and promote, promote, promote!  Make sure your name is out there and your value is communicated. (Recently, for example, a client launched a campaign stressing the value of their experience and expertise to consumers struggling to understand and react to the changing market—a welcome opportunity to promote value beyond just rate.) Have access to a library of content in your CRM system? Encourage your team to launch automated touchpoint campaigns that target prospects and previous customers in meaningful ways–with messages that are relevant to their particular circumstances. Leverage digital campaigns, with lower acquisition costs. Do everything you can to ensure you will be top of mind when the customer is ready.

It’s helpful to note that success can often be achieved through straightforward programs that don’t require elaborate efforts to implement. We have seen strong results and positive ROIs (a 6.0 on our most recent effort) when we work with clients and target customers and prospects—even with simple mortgage propensity programs. We’re able to use customer data, P$ycle segmentation data, and other relevant information to target effectively. 

A look at three recent direct mail campaigns executed by Galapagos Marketing.

Not to be discounted is the fact that these programs can also improve the lives of customers by helping them get what they needed: through better rates or terms, access to cash, and increased convenience.  Growing your business and improving your customers’ lives is, of course, a winning combination.

Let us know the greatest challenges you are facing in the mortgage business. Email or call us anytime.

Feeling Buried? A Lesson From the Legendary St. Bernard

TWO out of THREE organizations will fail at implementing strategic plans this year. Here’s how you can be the one that succeeds.

Long before these high-spirited, drool-coated canines found a place in our hearts (and next to us on the sofa), St. Bernard dogs made a name for themselves during the late 1700s by saving lives. Monks used the burly dogs to help them on rescue missions during treacherous snow storms in the St. Bernard Pass, a path that led travelers through the Alps between Italy and Switzerland.


The dogs, working in pairs, continually made rescues for 150 years – saving buried, tired, and injured travelers. One dog would lay on the stranded traveler to provide warmth while the other alerted the monks for help. The dogs became so reliable, that when Napoleon and his 250,000 soldiers crossed the St. Bernard Pass between 1790 and 1810, there were zero casualties.

What does this have to do with your marketing strategy?

While we sincerely hope your corporate hallways are not as treacherous as the St. Bernard Pass, come April every year they may be susceptible to an avalanche of their own - the one that comes with first-quarter strategy stall.

In our 20+ years consulting with community financial institutions, we’ve seen organizations' enthusiasm for strategic execution fade as people get buried by their day-to-day workloads. ‘I’ll start that tomorrow’ turns into ‘Let’s push that to next quarter’, and good initiatives die on the vine.

While you may feel it’s only your organization experiencing this, think again. Two out of every three organizations will fail at carrying out their strategic plans this year. Lack of execution is top-of-mind for every exec. In fact, when Harvard Business Review surveyed CEOs about their biggest concerns, strategy execution topped the list – right along with the economy, innovation, and topline growth.

Many organizations buckle down on strategy with antiquated methods to get back on track that end up further stalling progress – see HBR’s ‘Why Strategy Execution Unravels – and What to Do About It’ video -- but sometimes, it's the simple fact of being buried that stalls progress and points to, if not a brandy cask, then a strategic partner to help dig out and get your agenda back on track.

That’s where Galapagos comes in.

Community banking is our focus. We understand the organizational and market challenges you face in executing effective strategy. We’ve purposely built our team to complement yours, providing specialized help in the areas of planning, market insight, project management, and marketing communications – precisely when and where you need it. 

To get a better idea of how we help, take a look at some of the projects we're working on for other community FIs.

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