Learning from the Greatest: Tom Brady’s Strategic Insight for Bankers
Tom Brady, the legendary former NFL quarterback, was renowned not only for his exceptional ability to throw the perfect pass but also his strategic prowess in knowing when and where to throw it. His insightful knowledge of his opponents’ dynamics was a key factor in his success, and such strategy holds a significant lesson for the banking industry. As Brady once stated, “It wasn’t how fast I could run but how fast I could diagnose what they were doing.”
Brady’s approach to understanding his adversaries was a critical element in his triumphant last Super Bowl victory against the Kansas City Chiefs. As he revealed in a recent interview, he had studied his opponents so meticulously that he knew their defense strategy better than they did.
The Banking Playbook: Know Your Competition
Brady’s strategy presents a crucial lesson for banking CEOs and their executive teams. To succeed in an increasingly competitive market, banks must not only understand their customers but also their competitors. It is vital to anticipate the next moves of rival banks, credit unions, and AI-driven fintechs before they happen, as they too are targeting your customers. This competitive intelligence is often referred to as the other KYC – ‘Know Your Competition’.
From consulting with several hundred banks since 1970 and serving on community bank boards, I have developed a 10-point, AI-powered ‘Know Your Competition’ playbook to guide banking executives towards success.
1. Engage Your Commercial Lenders and Branch Managers
Your commercial lenders and branch managers are key sources of market intelligence. Regular interaction with them provides insights into market dynamics, including competitor strategies, borrower issues, and rate trends. They can offer invaluable information about who is winning borrowers and at what rates and terms, who is struggling, and who is luring away your depositors with better services or superior digital offerings.
2. Analyze Your Competitors’ Websites
A competitor’s website can offer comprehensive insights into their strategy. Key indicators to look for include new or discontinued products, updated marketing campaigns, changes in management or board, and emerging partnerships with fintech, digital assets, or banking-as-a-service providers. AI tools can be used to monitor these changes, alerting you to key developments before they become a threat.
3. Review Regulatory Reports
Regulatory reports for your competitors and their holding companies can provide important data about their performance and activities. The FDIC’s BankFind Suite, the FFIEC’s National Information Center, and Uniform Bank Performance Reports are primary sources for such reports. AI applications can help aggregate and analyze this data quickly and effectively.
4. Scrutinize Quarterly Call Reports
Quarterly call reports are akin to analyzing game films. They provide a deep dive into your competitors’ financials, revealing key metrics such as problem loans, charge-offs, loan modifications, and more. AI tools can highlight key quarterly changes, enabling you to stay updated on your competitors’ performance.
5. Track Media Mentions and Social Media Activities
Tracking every local, regional, or national article, marketing campaign, and social media mention of your competitors can provide a wealth of competitive insight. AI-driven surveillance tools can help monitor these activities, providing broader and deeper insights than traditional methods like Google Alerts.
6. Review Public Complaints
Public complaints about your competitors can offer insights into their customer service issues and other problems. These can be found on platforms like the Consumer Financial Protection Bureau and various social media platforms. AI tools can help identify patterns and sentiments in these complaints.
7. Follow Legal Filings
Legal filings involving your competitors can give you early warning about potential issues and challenges they are facing. AI tools can help detect developments in these filings early, allowing you to respond proactively.
8. Analyze CRA Performance Evaluations
Community Reinvestment Act (CRA) performance evaluations can provide valuable competitive intelligence. They often disclose donation amounts to specific nonprofits and sometimes community development borrowers. Your CRA officer should collect and report on competitors’ CRA public files, along with their annual HMDA and CRA loan filings.
9. Review FDIC’s Summary of Deposits
The FDIC’s Summary of Deposits can provide insights into your competitors’ branch deposits and market shares. This data can help you identify who is capturing market share and why.
10. Keep Your Friends Close, But Your Enemies Closer
Finally, never miss an opportunity to connect with a competitor at an industry, community, or social event. Just as NFL teams hire rival coaches, banks often recruit lenders and key personnel from competitors to better understand their playbook.
In summary, a winning strategy in banking, as in football, requires knowing your competition. This knowledge is critical for a winning game plan that helps keep your customers and win over theirs. Just as Tom Brady’s greatness wasn’t just about execution but also anticipation, the same is true in banking. The more you understand your competition, the better you can serve your customers and outperform your rivals.
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