Ways CEO’s and CFO’s Can Realize Cost Savings
Written by: Bill Dolan, CMB, AMP
As more and more CEO’s push for greater efficiency, CFOs are being squeezed on all sides. Many of the finance teams in 2024 were already working with tight budgets and were stretched thin due to multi-tasking coupled with high interest rates making it far more challenging and costly to have cash on hand and available, compared to prior years.
Both the requirements and the responsibilities of the CFO position have changed dramatically over the years. They are no longer considered just number crunchers but today, are the strategic engineers and trusted planners to their CEOs as well as the chief communicator to their Board of Directors. It is no longer about just budgeting for their institutions, managing their expenses, and growing their banks, credit unions, and mortgage companies profitably. Today, CFOs in 2025 must reduce expenses while maximizing their profitability. To do so, CFOs should consider the following:
Think Strategically
CFOs tend to look to cutting costs in the most logical areas. Take for example, easy targets that include administrative and operational overhead costs. Minimizing these areas makes perfect sense. Reducing budgets in the most logical areas across departments and cutting down on expensive dinners, conferences and retreats to free up the budget will allow you to allocate elsewhere, right? Well, yes, but really, for the short term only, not something sustainable for the long term.
CFOs need to be sure that every quarter, they’re thinking outside the box, exploring new and innovative ways to save money – and that this way of thinking aligns with their overall business strategy and goals. Is a new mortgage product or service you’ve invested in providing value and ROI? Are you wasting time and money by complicating processes that could be streamlined or outsourced to a third-party vendor by taking a totally different approach? These are the types of questions that CFOs should be asking themselves to find new ways of reducing and cutting expenses.
Focusing on a core set of products and services may seem contrary to the goal of using digital technology to personalize the customer/borrower experience. It isn’t. Personalization should mean offering your customers, borrowers, or members, a product or service at the right time and through the right channel. Personalization should be a matter of how products are delivered, not what the products are. Simplifying the processes can deliver significant cost savings. Many, however, fall down in this area and sometimes are challenged in taking the necessary steps needed to reduce their costs and improve their profitability. There is a better way!
The lending landscape is tough at this time and many believe it will remain tough for a while. Institutions are losing money operationally as their strategy does not mirror what “they need to do” …. reduce their workforce. Strategies for many are not being executed successfully. But what are these strategies? What is your strategic workforce plan? Do you have one? How can you utilize these full-time 40-hour per week individuals more efficiently? After all, they are paid no matter what your current volume may be.
At Spillane Consulting Associates (SCA), we combine deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. We work with clients to enhance their mortgage lending products, platforms, and services, improve their operations and risk profile, and advance their organizational performance. We bring industry experts in every relevant discipline and partner with financial institutions on their most significant challenges. Our senior consulting strategists draw on years of lending experience allowing them to develop sustainable strategies and create value for institutional banking firms, credit unions, and mortgage companies throughout the industry.
If you are looking for solutions to your challenges, and honest and straightforward guidance, contact Bill Dolan, Director, at: (617) 694-2617 or by email at: Wdolan@scapartnering.com. Let SCA show you ways to shape your own sustainable future.
