Welcome to the Age of Raging Change

The 2000s promise all the fun and excitement of the 1990s, plus the likelihood that the economy will slow down, plus the changes wrought for the industry by the Gramm-Leach-Bliley Act. Add it all up and you've got the makings of a gutbuster ride. Opportunity knocks Community bankers have long proven themselves to be adaptable sorts that find a way to survive, even thrive, over the long haul. The secret in the 2000s will be sorting out the smart new idea versus the merely trendy. Learning what to let go from the past--and what to hold fast. Forming partnerships with companies, people, and technologies that bring customers the best of the old and the new. The picture that comes through many of the individual sections of this, the latest ABA Banking Journal/American Bankers Association Community Bank Competitiveness Survey, is of an industry that is still wrestling with the transition from the Way Things Were to the Way Things Will Be; an industry deciding what to bring on its trip into the new century and what to leave behind. Some highlights: * Who will follow the old guard? As the Executive Suite section, p. 5, sets out, the early years of this century of change will benefit from the leadership of a seasoned cadre of bankers. However, there is a worrisome lack of preparation in some banks for the next stage. * What yardstick--and whose? As the section Performance Picture, p. 8, illustrates, there is a considerable gulf between how the pundits think performance excellence should be measured and how most community bankers do so. * Whose job is it, anyway? In the Sales Culture section, p.10, you see an industry that speaks very highly of the need for a sales culture, but which often still declines to recognize that selling requires an incentive. Yet many banks are finding that they must spend more on employee compensation or they'll watch their people file out the door to nonbank, nonfinancial employers. * Brother, can you spare a deposit? An on-again, off-again problem of funding loan growth appears to have become so institutionalized by the financial industry's evolution that the widening of Federal Home Loan Bank System funding didn't come a moment too soon. The case for this is made in Funding Picture: An Evolving Tapestry, p. 16. * One foot in virtual banking: As the section, You and Your Bank On The Net, p. 13, and Exhibit lower left, accompanying this summary, illustrate, community banks are trying to coexist in two worlds, the real one and the one that exists somewhere beyond your modem. Just as much as websites for community banks are becoming something close to an assumption, the branch system appears to be more important to community banks than ever. * Hell bent for new powers: Anyone who thought community bankers weren't really interested in what Gramm-Leach-Bliley would do for them wasn't talking to them. As shown on p. 22, even before the law passed banks were expanding into insurance and securities areas, to the degree they legally could, at a tremendous rate. Now the process will be simpler, cleaner, and, likely, faster. ABOUT THE SURVEY This is the fourth Community Bank Competitiveness Survey conducted by ABA Banking Journal and the ABA Community Bankers Council. The purpose of the surveys is to establish a series of rolling benchmarks regarding community banks' ability to maintain their competitive edge, while also exploring new ground as the issues dictate. For the 2000 edition, 6,770 top-management subscribers to ABA Banking Journal were mailed a four-page questionnaire. …