Business and consumer loan products, deposit account products, treasury management products and services, and your institution’s website are all examples of “bank products,” and all these bank products deserve a product manager. This week, we are taking a look at 10 essential roles for a banking product manager.

The problem is that institutions’ marketing departments focus on marketing “all products” but there is no operational owner for the individual products. Therefore, products are like orphans. They are birthed and then are left on their own to go through life. While that may be a drastic analogy, that is exactly what happens with products at most financial institutions resulting in product failures, no accountability to maintain products, or no one knowing each product’s profitability.

The Marketing Committee (if you have one) is a great place to start the discussions of individual product management. Although it’s a good idea to work together as a team on the marketing of products, each product needs and deserves the attention of one non-marketing person accountable and responsible for managing the product through its life cycle.

We recommend formally defining the role of a Product Manager.  What does it entail to be the banking product manager for a specific product or line of products?

Let’s study the overall responsibilities of a Banking Product Manager:

1. Solve Customer Needs with a Solution

Product Managers ensure that it’s always all about meeting customers’ needs! They survey customers and research what’s available in the market as well as competitors’ offerings.

2. Product Ideation and Creation

Once a Product Manager knows what customers are asking for, the next step is to answer the question: Are you going to create/develop a new product or are you going to see what the market already offers? Most institutions don’t have the resources to develop products internally, so they look at market options.

3. Define a Clear Target Market

Product Managers know exactly what type of customer (business or consumers) will buy your new product before launching new products. Furthermore, to sell business products, knowing who inside a business is your target “persona” helps you create a “personalized and customized marketing approach.”

4. Manage Vendor Relationships

Product Managers select the right vendor whose product will integrate best with your core system and is a critical step in the implementation process. Additionally, they must follow the vendor due diligence established on your Vendor Management Program.

5. Manage Product Profitability

For some reason, in the past, community banks and credit unions have offered products that they believe account holders expect for free. Yes, there are some products that, unfortunately, because every other financial institution offers for free, then you feel obligated to give it away. However, you must be very careful to study the actual product cost of development and ongoing maintenance. This includes what the core system provider or third-party vendor charges your institution on an ongoing basis. Once again, bank product management ensures profitability.

6. Collaborate with the Marketing Team

The Product Manager should hold a seat on the marketing team and ensure a marketing plan for each product exists. They can also assist the marketing team with messaging for similar products such as Remote Deposit Capture and Mobile Deposit and educate your customers as to which may be a better fit for them.

7. Ongoing Surveying and Communications

The Product Manager continually requests feedback from product users. That is the only way to continue improving products. Similarly, it may be the only way to discover a specific product is no longer needed/wanted and needs to be sunset. Sometimes you may decide to switch vendors and the existing product will have different functionalities or a new look.

8. Product Reporting

The Product Manager collects data and report to the Marketing Committee as well as to the leadership—especially if the institution made a significant investment in a new product. There should be an ROI for each product.

9. Product Life Cycle Management

Product Managers ensure the product is launched successfully, monitor the life cycle of each product, and recommend if, at any time, it’s time to end a product. Often, retiring an old product and creating a brand new one gives the institution an opportunity to create awareness about services that your existing clients didn’t even know you offered.

10. Product Training

Product Managers are responsible for making sure the sales and operations teams are fully trained in each product. Everything from results, benefits, features and onboarding procedures need to be trained to the staff.

Bonus Item: The Right Talent

Banks and credit unions need to allocate the right talent and experience to fill the position of a Product Manager. Some of the key talents needed are project management, leadership, ability to communicate with customers, peers, technical staff, operations, and sales teams. In addition, you need someone who can handle multiple priorities and work with the various teams on different parts of the project simultaneously.

Many financial institutions see the Product Manager position as an expense because they don’t necessarily bring sales to the institution. However, having a Product Manager will ensure that your institution is on top of new products, that your products are solving customers’ problems, and that products get the individual attention they deserve to live through the life cycle successfully. Defining, developing and staffing the Banking Product Manager role shows your institution is trying new things and continuing to look for solutions to your customers’ needs.

Looking for ideas to expand your Treasury Management reach to new business customers? Look into the TMClarity Framework, our comprehensive and transformative training and Treasury Management business management system that leads to greater sales success, higher margins, and increased customer retention in a competitive marketplace.

Synthetic Identity Fraud Risk Assessment is a key component of your Enterprise Risk Management risk assessment. Identity theft is not new. In fact, is as old as checks being stolen from a mailbox to apply for credit using the victim’s name or to make purchases using the checks. When conducting an Enterprise Risk Management Risk Assessment, ensure to include this new risk category that I call “Customer and Synthetic Identity Fraud.”

The Federal Reserve formally defines Synthetic Identity Fraud as the use of a combination of personally identifiable information (PII) (Off-site) to fabricate a person or entity in order to commit a dishonest act for personal or financial gain. There are two primary ways your institution could be dealing with Customer Risk:

• Identity Theft: Someone stole another person’s identity.
• Fraudulent Entities: A company is completely fraudulent and conducts business as if they were legitimate.

In the most common way of identity theft, your institution provides banking services such as depository accounts or loans to persons who stole someone else’s identity. They use the Personal Identifiable Information (PII) to open accounts and apply for loans.

Dealing with fraudulent entities is a different matter and they are harder to identify as such. They establish the entire scheme from beginning to end. They organize a company, hire real employees, create fictitious sales and produce Accounts Receivable records—including legitimate invoices. They even pay bills just like any other legitimate company—except it’s all fake. Some employees have no idea they are working for a fictitious organization until the Feds show up at their doors after years of investigation.

Protecting Your Institution from Synthetic Identity Fraud/Customer Risk

So, how does your institution protect itself from these two types of Customer Risk? Below are some questions you should include in your Risk Assessment when assessing “Customer Risk:”

• What other risks are impacted when Customer Risk occurs in your institution? Typically, you may have reputational risk as well as earnings, regulatory, and legal risk.
• What mitigating factors do you have in place? Mitigating factors can be your software solutions to automate the CIP processes.
• Is your BSA Program strong and include robust CIP, KYC, OFAC checks, CDD, and EDD (see key below)? Your BSA Program must include all these elements.
• Do you have an ongoing training program for your employees and how often do you train them? Without the appropriate and timely ongoing training your employees will miss important cues to identify and prevent fraud.
• Do you offer training for your customers? Regulators are increasingly asking institutions to provide some type of identity theft training for your customers.
• Are dual controls and segregation of duties in place for new deposit and loan accounts? For example, one employee opens the account, a second employee makes the deposit, and a third person reviews the core system’s Daily Activity Log?
• Have you implemented a BSA Fraud Software to automate the process? Automation is the trend to avoid the intensive manual monitoring and reporting processes.
• Are procedures in place to monitor kiting suspect activities and filing SARs and CTRs on potential AML activities?
• Do you monitor daily overdrafts regardless of the amount, high risk customers, and mobile banking deposit activity?
• Are monitoring systems in place to alert your employees of potential fraudulent transactions in your customers’ accounts?

As mentioned above, the Synthetic Identity Fraud Risk Assessment is a key component of your Enterprise Risk Management risk assessment. I hope these questions will help you complete a Customer/Synthetic Identity Fraud Risk Assessment. If you need help conducting this type of risk assessment, feel free to reach out to us.

Below is a key to all the acronyms used above for your reference:

• BSA = Bank Secrecy Act
• CIP = Customer Identification Program
• OFAC = Office of Foreign Assets Control
• AML = Anti-Money Laundering
• KYC = Know Your Customer
• CDD = Customer Due Diligence
• EDD = Enhanced Due Diligence
• SAR = Suspicious Activity Report
• CTR = Currency Transaction Report