We are emerging from a period where consumer confidence in the banking sector reached new lows. We are seeing class-action suits filed for inappropriate overdraft fees, credit card fees, and ATM fees; mishandled TARP loan modifications; pension funds that are misleading about risks taken; and the list goes on. Congress is currently grappling with “tougher bank regulations,” both as a result of the near economic collapse and the attention to “inappropriate fees.”

Where does this leave banks and credit unions with regard to cleaning up the financial system’s image and providing reasonable returns? Our recent discussions with CFOs and COOs and our work in the industry have led us to the conclusion that the remainder of 2010 and the beginning of 2011 will be all about improving operating efficiencies. What gains will be made on the revenue side will result from improved effectiveness of new business processes and practices. It is time to get back to a common sense approach to developing market strategies and delivering products and services.

Where should banks start? The key is to take time and effort out of the new business process, which delivers the joint benefit of keeping the transactions simpler for customers and freeing up time for the new-business staff. Also, we see a more critical view of the service channels, one that allows customers access to necessary information in a self-service mode or through a simple bank staff contact. Another opportunity for improvement will be restoring the integration of channel alternatives for both service and sales. The electronic delivery channels have offered this opportunity, and we are now seeing innovations that make the delivery seamless.

The industry is in dire need of a public relations campaign to win back the confidence of customers but making sure that bank policies and practices follow common sense will be a pre-requisite of such a campaign. There is no room for arguments defending inappropriate fee practices, poor service delivery, or fine print in selling products that customers do not need. It is time to get back to using basic principles to design delivery that you can be proud of. We see the next 18 months as a time to move forward on the tangible improvements and let the regulatory headlines and class-action suits take a back seat.