The goal of the BC-SME program is to help bank's increase and generate greater returns of capital allocations on its SME business portfolio.
The business environment within community banks traditional markets is most challenging. Many bankers understand that the problems evident in the subprime mortgage lending market are indicative of the emerging heightened risk factors in the consumer lending market as a whole.
These pressures are pushing local banks to develop new ways of attracting customers and capital, and many are targeting the SME market as a business growth engine. According to the IFC, the SME market in the United States is estimated to approach 6 million businesses.
BC-SME offers local banks business development vehicles that drive the sale of commercial financial products. BC-SME offers numerous opportunities for client and prospect engagement. The current BC-SME program consists of three professional service products. The three products offer an in-depth financial health
assessment of the SME company's balance sheet and income statement as measured by best practice metrics of industry segment peers; and a risk management reviewof corporate governance and regulatory compliance within a best practices framework.
James McCallum, President of Sum2 observed, "Sound Practice products and services are usually associated with larger private companies and publicly listed firms. Indeed, the better managed firms have been using sound practice tools and programs for some time. It is clear that SME firms need to incorporate sound practice initiatives and tools as a strategic imperative to strengthen their businesses. Small businesses benefit through the implementation of sound practices in many ways. Chief among them is the attraction of premium
clientele, increased profit margins, enterprise and regulatory risk mitigation and enhanced returns on equity and investment capital."
BC-SME Key to Profitable Growth
The benefits of the BC-SME program to the banking institution are numerous. Bank calling officers can engage clients and prospects on a deeper forensic level. The bank is in a position to offer its client's unique insights into the risks in the prospects business model and financial condition. The bank is also armed with a
clear understanding of a company's asset quality and the potential risk associated with the commercial relationship. Financial product sales are also highly correlated to its commercial deployment while potential loss events are further mitigated due to the enhanced due diligence and heightened corporate and transactional transparency.
Investors and bank regulators have sharpened their focus on how economic/regulatory capital allocation strategies are managed and how credit risk and potential loan losses are mitigated. This is particularly true for hedge funds and private equity firms that may find community banks attractive equity investments and as potential originators of high quality credit portfolios for loan securitizations and structured investments.
Participants in the BC-SME will be able to articulate a clear message to investors how it is differentiating its product suite, high grade credit portfolio and market positioning within an ultra-competitive market segment.
BC-SME Program Enrollment
Sum2 is currently reviewing candidates for the BC-SME program. The program offers local branch managers; marketing professionals, compliance and risk officers, investor relations and C Level executives' opportunities for program engagement.