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NEW RESEARCH: While Mid-Size Banks Gain Efficiencies Through Scale, They Come Up Short on Delivery of Digital and Automated Services

Scottsdale, Ariz., March 30, 2020 — Cornerstone Advisors today released the Cornerstone Performance Report for Banks 2019, the thirteenth in a series of benchmarking studies published by the firm. According to the report’s findings, despite a “relentless focus” on deposit growth among mid-size banks in 2019, this goal has proven elusive for many institutions.

Thirty-two banks with median assets of more than $4 billion participated in the study, which collected nearly 300 spending, operations and staffing benchmarks across dozens of bank areas.

“In reviewing the benchmarks, it is very clear that mid-size banks are gaining efficiencies through greater scale,” observed Ron Shevlin, director of research at Cornerstone Advisors and author of the report. Study findings reveal that compared to Cornerstone’s 2017 report, bank assets grew 30 percent, total number of employees rose by 5 percent, assets per employee increased 18 percent, assets per branch grew 23 percent, and return on assets improved by 19 percent. And yet, the study shows, the median bank opened just 2.17 percent of total deposit accounts online in 2019.

In the face of disruptions brought about by technology, customer expectations and shareholder value, mid-size banks are moving “too slowly” with the shift to digital delivery and stronger productivity through automation, the report maintains. “Even with a commercial focus, mid-size banks have hundreds of thousands of ‘eyeballs’ logging into mobile and online banking each month, but these same institutions are doing very little to leverage or monetize this activity from a sales or customer engagement standpoint,” it states.

The report highlights a number of friction points that it says are preventing banks from generating more online deposits:

  • Low interest rates and the lack of a deposit price war
  • Compliance and security concerns
  • “Clunky” first-generation technology solutions
  • Inadequate promotion from marketing departments

Moving into 2020, “bankers need to make sense of the environment, and how and where they want to compete in that environment,” the report concludes.

The data for the Cornerstone Performance Report for Banks 2019 was collected by PeerMetrix, an affiliate software company recently formed by Cornerstone Advisors.

Cornerstone Advisors is a management consulting firm focused exclusively on helping banks and credit unions improve profitability and elevate performance. For more information, visit crnrstone.com.