Why Are Banks Struggling to Measure Banker Productivity?

Gabe Stengel says the majority of firms are seeing a huge amount of individual productivity and are trying to figure out how to turn individual productivity into firm productivity they can measure.

A banker at a bank where he is deployed will say life is great and that the banker is 100 times more efficient than before. An MD sent five pages to a client in 10 minutes, work that before meant going back and forth with an analyst over three days. The bankers have not done any analysis in 25 years, have not opened an Excel file in 20 years, and can do the work themselves. Winning more deals, transacting more, or servicing a part of the market the firm has not seen is still an open question, so the gap is a firm strategy problem. The plan is either to cut costs or to enter parts of the market that before did not make sense to serve. JP Morgan just announced the bank will try to do a lot more M&A work for SMBs, markets skipped before because the deal fees were probably too small and the deals needed too many people to staff. He leaves open whether a banker who can be a deal team of one can enter markets that before made no sense.

The bottleneck at some point will be the creativity of the customer. Unlimited capability still leaves the customer figuring out what to do. A hundred great investors starting tomorrow would take a while to structure, including whether they all work on different things.