Local FI’s ‘trade deadline’

If you’re a sports fan, you may know that Major League Baseball’s trade deadline just passed. Each season as the deadline approaches, teams look at their current roster and map their best shot to reach the playoffs with their sights set on the ultimate prize – winning the World Series. Where can they make improvements? Is there a gap in the roster or a position that could use improving? Perhaps the missing piece is a left handed power hitter, another bullpen arm, or a veteran catcher who calls a great game.

The trade deadline is a period of elevated risk and uncertainty; a high-stakes, multi-dimensional game of chess. Baseball’s best general managers are committed to winning and do not rest on their records or wait and see what everyone else is doing; they play offense. When this time of the season comes, wishful thinking is not enough. The best teams have a strategy and are ready to attract the desired skills and talents to position them for success, without taking a significant hit to their current roster and farm system (their bottom line!).

Let’s shift into a thought experiment and see if we can gain some clearer perspective on how this analogy relates to the banking industry. Imagine yourself as a General Manager of your banking team. Your team seems to be off to a good start this season. Your lending portfolio is steady, your call center volumes are in control, and you’re online and mobile banking is stable. With your current roster and history of service, you know you’re in the game. But is your strategy to ‘hang in there, to just ‘make it’? Of course not. You have bigger plans on the horizon. However, you just looked at your budget and the trade timeline. Money and time are getting tight! Does that mean you skip out on participating and hope your current team will keep you relevant this season?


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