And, our bank (for now) will not be taken over by the FDIC. We ended with some liquidity issues, but...what's a funding issue between friends?
The simulation required our class to be divided into teams: 7 banks competing against each other. We spent a lot of time meeting just as our team, so I can only speak to our team's dynamics. However, based on the success of each bank in our class, I'm sure the experience was similar for everyone.
Our team was made up of people with a variety of complementary backgrounds, from non-competing areas. While we had about a month to pour over the initial set of financial statements, once we began making decisions for the simulation, we had less than 2 hours to review and decide our next move. This is where having everyone's diverse background was beneficial. In our team, one person would make a recommendation for a decision. Another person would bring up some considerations. All of us discussed, contributed, and arrived at a consensus. We even had time for people who might be unfamiliar with a particular area of the bank (ie maybe they didn't handle deposits, loans or investments) to ask questions and get them answered by other teammates more familiar with those particular areas.
Personally, I find I learn more from this informal type of learning.
The biggest challenge with the game, and our biggest points of discussion, is that the simulation is not the real world. So, some people in our team made suggestions that were very valid in the real world and their real markets, but not in the game. Again, it was a great opportunity to discuss how things happen in the real world and how they differ significantly (on some items) from the simulation.
I'm not going to reveal all of our winning strategy here (as the child of educators, I would hate to deny you your own learning experience!), but I will say that we had two ground rules that helped keep things moving for our team:
1) It's just a game. (This was repeated multiple times a decision period, especially as time drew closer to meals or end of day)
2) No arguing over pricing decisions that were 5 basis points (bp) or less apart (ie should our rate be 7.99 or 8.00?).
Also, it's important to remember that the simulation is designed to help you think like your finance department, not your marketing department. You only make two marketing decisions: how much to spend on marketing and what priority you place on each of your products to receive those marketing dollars.
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| Ok, maybe 3 marketing decisions: how to position your bank to sell it to your classmates so you can hang out by the pool on a beautiful afternoon. We had no takers because we priced too high. My strategic advice to you: Sell your bank as "free to a good home." |
Seeing the bank from this other perspective helps you understand how you can justify your marketing budget in terms of overall bank profitability, and helps you understand why your bank may be making certain decisions about products/sectors to pursue.
Note: The views presented here are the personal views of our ABA School of Bank Marketing & Management participants and do not reflect the views of their respective banks.
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