Category: Bank Director

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Push, Push… Push, Push

Last October, I journeyed to Austin, Texas, to watch my first Formula One race. Like many, Netflix’s wildly popular Formula 1: Drive to Survive drew me in. That series dramatically increased the popularity of the sport in the United States, with plenty of drama on track — and off. 

Inevitably, the show takes viewers inside a showdown between two cars jostling for points, separated by mere milliseconds.

While being out front has its advantages, so too does drafting your competition. Personally, I love watching/hearing a team’s crew nonchalantly imploring its driver to “push, push… push, push” over the radio. This call to click the push-to-pass mechanism on a race car —which provides a temporary jolt of speed — typically results in the hunter becoming the hunted.

So yes, speed, competition and risk-taking is on my mind as we prepare to host Bank Director’s Experience FinXTech event May 5 and 6 in the same city as the Circuit of The Americas (aka COTA).

Much like Formula One brings some of the most ambitious and creative teams together for a race, Experience FinXTech attracts some of the most inspiring minds from the deeply competitive financial services space.

Now in its seventh year, the event connects a hugely influential audience of U.S. bank leaders with technology partners at the forefront of growth and innovation. Today, as banks continue to transition towards virtual or digital strategies, fintechs become partners rather than just competitors in the race to succeed. 

We’ll look not only at fintechs offering efficiencies for banks, but at fintechs offering growth and improved performance as well. As fintech guru Chris Skinner recently noted, “If you only look at technology as a cost reduction process, you never get the market opportunities. If you look at technology as a market opportunity, you get the cost savings naturally as a by-product.”

We’ll consider investor appetites, debate the pros and cons of decentralized finance and share experiences in peer exchanges. 

Throughout, we’ll help participants gauge technology companies at a time when new competitors continue to target financial services.   

Most Formula One races are won on the margins, with dedicated teams working tirelessly to improve performance. So too are the banks that excel — many of them with dedicated teams working with exceptional partners.

*I am delighted to return to Texas and see so many of my former friends and colleagues at Bank Director. Heck, I’ll tease Naomi Snyder (the editor-in-chief), that I found a way to use my original title for this piece I authored for BankDirector.com.

In addition, I’ll be on stage, rep’ing the team as a member of the company’s board of directors (and as a minority owner), perhaps in boots, maybe without a tie… Saying hello to so many friends from across the industry — like the team at Nymbus who graciously hosted me and some incredibly awesome folks in our industry last October at F1’s COTA race… and yes, flying the skull & crossbones for the team at Cornerstone Advisors.

This is an awesome annual event, and one worth following on social media if you’re unable to join in person. Check out @Fin_X_Tech on Twitter to keep tabs on the provocative conversations that inevitable take place.

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What To Expect at the 2022 Acquire or Be Acquired Conference

When Robert Iger joined The Walt Disney Co. as its new CEO in 2005, the company’s storied history of animation had floundered for a decade.

So Iger turned to a competitor whose animation outpaced Disney’s own and proposed a deal. 

The relationship between Pixar Animation Studios and Disney had been strained, and Iger was nervous when he called Pixar’s CEO, Steve Jobs.

The two sat down in front of a white board at Pixar’s headquarters and began listing the pros and cons of the deal. The pros had 3 items. The cons had 20, as the now-retired Iger tells it in his this Masterclass online. 

“I said ‘This probably isn’t going to happen,’’’ Iger remembers. “He said, ‘Why do you say that?’”

Jobs could see that the pros had greater weight to them, despite the long list of the cons.

Ultimately, Disney did buy Pixar for more than $7 billion in 2006, improving its standing, animation and financial success. In the end, Iger says he “didn’t think it was anything but a risk worth taking.” 

I read Iger’s memoir, “The Ride of a Lifetime,’’ in 2021, just as I began planning the agenda for our annual Acquire or Be Acquired Conference in Phoenix. Widely regarded as the premier event for the financial industry’s CEOs, boards and leadership teams, we are preparing to welcome nearly 1,400 to the Arizona desert this weekend.  His story resonated, and not just because of the Disney/Pixar transaction.

I thought about that line of risks worth taking… and was reminded of the leadership traits Iger prizes; specifically, optimism, courage and curiosity.

Many of this year’s registered attendees wrestle with the same issues Iger confronted at Disney. They represent important brands in their markets that must respond to the monumental changes in customer expectations. They must attract and retain talent and to grow in the face of challenges. 

While some look to 2022 with a sense of apprehension — thanks to Covid variant uncertainty, inflation, supply chain bottlenecks and potential regulatory changes — I feel quite the pep in my step this January.

I celebrate the opportunity with our team to return, in-person, to the JW Marriott Desert Ridge. With so many registered to join us Jan. 30 through Feb. 1, I know I am not alone in my excitement to be with people again in real life.

So what’s in store for those joining us? Conversations around:

  • Capital allocation.
  • Balancing short-term profitability versus long term value creation.
  • Managing excess liquidity and shrinking margins. 
  • Re-thinking hiring models and succession planning. 
  • Becoming more competitive and efficient.

Naturally, we discuss the various growth opportunities available to participants. We talk about recent merger transactions, market reactions and integration hurdles. We hear about the importance of marrying bank strategy with technology investment. We explore what’s going on in Washington with respect to regulation, and we acknowledge the pressure to grow earnings and the need to diversify the business.

As the convergence of traditional banking and fintech continues to accelerate, we again offer FinXTech sessions dedicated to delivering growth. We unpack concepts like banking as a service, stablecoins, Web3, embedded finance and open banking.

Acquire or Be Acquired has long been a meeting ground for those that take the creation of franchise value very seriously — a topic even more nuanced in today’s increasingly digital world. The risk takers will be with us, which is great company to keep. Indeed, “there’s no way you can achieve great gains without taking great chances,’’ Iger says. “Success is boundless.”

To follow along with this year’s event, I invite you to bookmark this blog, visit BankDirector.com and search #AOBA22 on LinkedIn and Twitter.

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Creating Options

Earlier this week, I welcomed officers and directors from across the United States to Nashville, TN. From a stage (and not a Zoom), I asked them:

What are your options as we head into the Fall? No, not your personal ability to buy or sell an asset or security.  Rather, the options you, as a leaders of your bank, see for the institution you are a part of today?

Strategically speaking, this is a fundamental issue for those in a leadership position to address.

Sure, there are topics that will dominate boardroom discussions — such as diversifying earnings streams and differentiating the bank’s reputation relative to others.

But let me ask you: who are your competitors? By extension, who are the peer groups that you should be basing your performance against?  Once answering these, what options do you know are available, right now, that can put space between your bank and their business?  Further, what options do you need to create in order to stay both relevant, and competitive in the months ahead?

Creating “optionality” is a concept that continues to rattle around in my mind. Indeed, it ties into the concept of franchise value and is one that members of a bank’s board need to prioritize. It opens conversations around delivery methods and channels, business relationships and partnerships — and yes, growth opportunities (be it organic or through acquisition).

As we talked about in Nashville, banks are under enormous pressure to prepare for an unknown future. Ahead of this year’s exclusive in-person event, I came up with three basic questions I find timely and relevant. Take a read and let me know if you agree.

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The SouthState Podcast: My Take On Banking, Leadership and FinTech

Last week, I had the pleasure of spending a few minutes with Tom Fitzgerald and Caleb Stevens on their Community Bank Podcast. Produced by SouthState’s Correspondent Division, the two dedicate their pod to helping community bankers grow themselves, their team — and their profits. For about 23 minutes, the three of us explored:

  • The hallmarks of a great business leaders;
  • The biggest trends I’ve observed in banking over the last 5 years;
  • The role of community banks (less than 1B in assets);
  • Who’s gaining traction in the bank technology space; and
  • How I feel about curiosity & empathy.

Oh yes, and I botched my ice cream analogy early on. As someone with a sweet tooth, I meant to reference Baskin & Robbins‘ 31 flavors of ice cream while talking leadership characteristics. As a child in Needham, MA, the idea that I’d have to choose between chocolate, coffee, oreo, cookie dough, etc posed a real challenge — especially as we’d go as a post-dentist treat! So when Caleb asks me about key facets of leadership in banking today, please understand my Covid-brain took me back to those fun childhood memories… which is how I wound up bellyflopping on the analogy!!

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Baseball’s Best… and FinTech Relationships?

The premier slugger and center-fielder for the Los Angeles Angels is an eight-time All-Star and three-time American League MVP — winning the award in 2014, 2016, and 2019 while finishing second in the 2012, 2013, 2015 and 2018 votes.

According to ESPN, he’s the best player going into this new season, based on his record for nearly a decade.

So, how did Mike Trout fall to the 25th pick in the Major League Baseball draft in 2009?

*And yes, I am still a die-hard RedSox fan… hello Big Papi!

Sure, there were some can’t-miss prospects alongside him. The Washington Nationals pegged Stephen Strasburg to be their ace — and selected him with the first pick. He’s no slouch himself — 112 wins, three All-Star games and a World Series title later, the organization has no regrets.

But back in 2009, 24 names were called before Mike Trout, this once in a generation player, heard his. Many of them never reached the majors, let alone Trout’s level.

Professional sports’ drafts are all about taking risks, dreaming big and building for a franchise’s future. These decisions ultimately impact wins, losses and financial futures of organizations for years to come.

For those charged with improving their teams, technology and delivery models, the implications of Mike Trout’s draft should give you pause. With so many technology companies stealing headlines these days, the question about “who’s next” in the financial technology space parallels what baseball teams go through each year.

Ask yourself: How do you and your colleagues look at what’s available? How do you evaluate a future potential fit? How do you commit to another business that can propel you forward, or leave you lamenting what could have been?

So much of a bank’s future depends on its leadership team’s ambition and appetite to take chances today. Inevitably, I find business leaders returning to two basic questions when it comes to a new potential business relationship:

  1. How can I drive new revenue with their support?
  2. How do I become more efficient with their help?

A baseball appears to have two seams; in reality, they’re 216 individual stitches. Similarly for banks, multiple small decisions add up to a big picture.

Just as baseball teams need to be realistic in terms of allocating capital, so do financial institutions when considering their tech spend. No financial services company can choose a relationship that guarantees success.

Like any good general manager, a banking leader needs to prioritize what’s the right fit for the team. Some banks and credit unions may modernize back-office technology, which has the potential to improve efficiency, reduce errors and free up resources for growth. Others may look at solutions that improve customer experiences or drive sales.

Regardless of where you are in your current approach to technology, you need courage to take the first step — and the discipline to take the next. While your team might miss on a Mike Trout, take comfort that there is more than one way to build a team.

Doing your own homework on who’s out there might just net you an MVP.

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Inspired By The Joshua Tree

WASHINGTON, DC — It turns out, Bono knew something about banking. 

Thirty-four years ago, an Irish band came up with an album that sounded revolutionary for its time. U2’s “The Joshua Tree” went on to sell more than 25 million copies, firmly positioning it as one of the world’s best-selling albums. Hits like “I Still Haven’t Found What I’m Looking For” remain in heavy rotation on the radio, television and movies.

Talk about staying relevant. As it turns out, U2 had some wisdom for us all.

Relevance is one of those concepts that drives so many business decisions. For Bank Director, the term carries special importance, as we postpone our annual Acquire or Be Acquired Conference to January 30 through Feb. 1, 2022. In past years, this special event drew more than 1,300 bankers, bank directors and advisors to discuss concepts of relevance and competition in Phoenix.

While we wait for our return to the Arizona desert, we got to work on a new digital offering to fill the sizable peer-insight chasm that now exists.

The result: Inspired By Acquire or Be Acquired.

Think of this as a new pop-up website, one that disappears after a few glorious weeks. Available exclusively on BankDirector.com, this on-demand package consists of timely short-form videos, CEO interviews, live “ask me anything”-type sessions and proprietary research. Topics range from building value to doing a deal, enhancing culture to addressing competition — and yes, technology’s continued impact on our industry.

Everything within this board-level intelligence package provides insight from exceptionally experienced investment bankers, attorneys, consultants, accountants, fintech executives and bank CEOs.  So with a nod towards Paul David Hewson (aka Bono) and his bandmates in U2, here’s a loose interpretation of how three of their Joshua Tree songs are relevant to bank leadership teams. 

With or Without You

(The question all dealmakers ask themselves.) 

Many aspects of an M&A deal are quantifiable: think dilution, valuation and cost savings. But perhaps the most important aspect — whether the deal ultimately makes strategic sense — is not. As regional banks continue to pair off with their peers, I talked with a successful dealmaker, Bryan Jordan, the CEO of First Horizon National Corp., about mergers of equals.

c/o Inspired By Acquire or Be Acquired

Where the Streets Have No Name

(Banks can help clients when they need it most.)

A flood of new small businesses emerged in 2020. In the third quarter 2020 alone, more than 1.5 million new business applications were filed in the United States, according to the U.S. Census Bureau, nearly double the figure for the same period the year before. Small businesses need help from banks as they wander the streets of their new ventures. So, I asked Dorothy Savarese, the Chair and CEO of Cape Cod 5, how her community bank positions itself to help these new business customers. One part of her answer really resonated with me, as you’ll see in this short video clip.

Running to Stand Still

(Slow to embrace new opportunities? Don’t let this become your song.)

With the rising demand for more compelling delivery solutions, banks continue to find themselves in competition with technology companies. Here, open banking provides real opportunities for incumbents to partner with newer players. Ideally, such relationships provide customers greater ownership over their financial information, a point reinforced by Michael Coghlan, the CEO of BrightFi.


These short videos provide a snapshot of the conversations and presentations that will be available February 4. To find out more about Inspired By Acquire or Be Acquired, I invite you to take a longer look at what’s on our two-week playlist.

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Here’s To The Optimists

Fad diets, self-care recommendations and admonishments to “turn the page.”

We all know what’s coming up in our news feeds. But before we give into these New Year’s cliches, let’s take a minute to appreciate how so many were able to pivot in such unexpected ways.

Knowing that one can successfully change should serve many well in this new year.

While resilience — and perseverance — took center stage in 2020, I find culture, technology and growth showed up in new ways as well.

CULTURE, REVEALED

During the darkest of economic times, I was amazed by examples of creativity, commitment and collaboration to roll out the Small Business Administration’s Paycheck Protection Program. When social issues exploded, proud to see industry leaders stand tall against racism, prejudice, discrimination and bigotry. With work-from-home pressures challenging the concepts of teamwork and camaraderie, delighted by how banks embraced new and novel ways to communicate.

TECHNOLOGY, FIRST

Seeing business leaders share their intelligence and experiences to help build others’ confidence stands out. So, too, does how few shied away from technology, which clearly accelerated the transformation of the financial sector. The rush to digital this spring forced banking leaders to assess their capabilities — and embrace new tools and strategies to “do something more.” As the financial sectors’ technology integration continues, this mindset of finding answers — rather than merely identifying barriers — should benefit quite a few.

GROWTH, POSSIBLE

Many banks considered JPMorgan Chase & Co, Bank of America Corp. and Citigroup as their biggest challenges and competitors entering 2020. Now, I’d wager Venmo, Square and Chime command as much attention. However, competition typically brings out the best in executives; with mergers and acquisitions activity poised to resume and new fintech relationships taking root, growing one’s bank is still possible.

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So here’s to the optimists. Leaders are defined by their actions, and many deserve to take a well-earned bow for making their colleagues’ and clients’ lives better. While we leave a year marked by incredible unemployment, economic uncertainties and political scars, I’ve found a negative mindset never leads to a happy life. Rather than lament all that went sideways this year, I choose to commemorate the unexpected positives. As I do, I extend my best to you and yours.

With appreciation,

Al

*This reflection also appears in Bank Director’s newsletter, The Slant. A new addition to our editorial suite of products in 2020, I invite you to sign up for this free Saturday newsletter here.

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What Is FinXTech Connect?

WASHINGTON, DC — Last month, our team celebrated ten years of “Bank Director 2.0.” As I look back on what we’ve accomplished, a few projects stand out. Today, I’m shining a light on the development of our FinXTech Platform, which we built specifically for financial institutions.

Bank Director’s FinXTech debuted on March 1, 2016 at Nasdaq’s MarketSite in Times Square. Positioned at the intersection of Financial Institutions and Technology Leaders, FinXTech connects key decision makers across the financial sector around shared areas of interest.

We initially focused on bank technology companies providing solutions geared to Security, leveraging Data + Analytics, making better Lending decisions, getting smarter with Payments, enhancing Digital Banking, streamlining Compliance and/or improving the Customer Experience.

As our brand (and team) grew, we heard from a number of bank executives about the challenges they faced in discovering potential technology partners and solutions. To help solve this issue, we built FinXTech Connect.

Sorting through the technology landscape is no easy feat. Nor is finding, comparing and vetting potential technology partners. But week-by-week, and month-by-month, we added to this proprietary platform by engaging with bankers and fintech executives alike. All the while, asking (whenever we could) bankers who they wanted to learn more about at events like our annual Summit or Experience FinXTech events.

Banks today are in the eye of a digital revolution storm. A reality brought about, in no small part, by this year’s Covid-19 pandemic. So I am proud that the work we do helps banks make smarter business decisions that ultimately help their clients and communities. To wit, the various relationships struck up between banks and fintechs to turn the SBA’s PPP program into a reality.

As we look ahead, I’m excited to see Bank Director’s editorial team continue to carefully vet potential partners with a history of financial performance and proven roster of financial industry clients. For those companies working with financial institutions that would like to be considered for inclusion in FinXTech Connect, I invite you to submit your company for consideration.

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When Will Bank Mergers Return?

WASHINGTON, DC — The bank M&A market is currently in a deep chill, thanks to the Covid-19 pandemic.  It is unclear when deal activity will heat up, so who better to ask than Tom Michaud, the President & CEO, Keefe, Bruyette & Woods, A Stifel Company, as part of Bank Director’s new AOBA Summer Series.  In this one-on-one, I ask him about:

  • The banking industry’s second quarter results;
  • Why bank stocks have not participated in the overall market recovery;
  • The medium and long term implications of the pandemic on the industry;
  • The area of Fintech he thinks will be the hottest for the balance of 2020; and
  • How the November elections might impact the banking industry.

There are 10 videos in the AOBA Summer Series, with topics directed at C-suite executives or boards. We talk about how important scale has become, given compressing net interest margins, increasing efficiency ratios and climbing credit costs. We explore why banks’ technology strategy cannot be delegated. We observe why some banks will come out of this experience in a bigger, stronger position. And we look at leadership, appreciating that many executives are leading in new, more positive and impactful ways. To watch, click here.

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My Conversation with the CEO of Atlantic Union Bankshares

WASHINGTON, DC — Leaders are defined by their actions, especially when facing adversity.  In our just-released AOBA Summer Series, three standout CEOs joined us in a series of one-on-one conversations.  Each provided a personal view on how their concepts of leadership vary; all, however, described their aspirations to provide exceptional quality and sustained performance.

Screen Shot 2020-08-12 at 5.21.46 PM

For instance, Chuck Sulerzyski, President & CEO, at Peoples Bank joined John Maxfield, Editor-in-Chief for Bank Director magazine.  They talked about the bank’s response to the unfolding coronavirus crisis and how a bank like Peoples might offset some of the pressure on its earnings.

Stephen Steinour, Chairman, President & CEO, Huntington Bancshares virtually sat down with Jack Milligan, Editor-at-Large for Bank Director magazine.  The two explored how he continues to work with the bank’s board of directors to plan for a future beyond the pandemic.

And as you can see here, I had the distinct pleasure of talking with John Asbury, President & CEO, Atlantic Union Bankshares.  We talked about leading in new, more positive and impactful ways.

With the U.S. economy slowly recovering from its devastating pause, what we don’t know easily exceeds what we do. But, as we reflect on the COVID-19 crisis and its subsequent impact on the country, a few industry trends are becoming visible. Hence the introduction of Bank Director’s AOBA Summer Series, now streaming for free on BankDirector.com

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Streaming Now: The AOBA Summer Series

Dreaming of a trip to Phoenix, and the Acquire or Be Acquired Conference, next January doesn’t seem so odd this summer.

WORKING FROM HOME — For decades, business leaders began to book their travel to the Arizona desert — for Bank Director’s Acquire or Be Acquired Conference — in early August. As evidenced by the nearly 1,400 at the Arizona Biltmore earlier this year, the annual event has become a true stomping ground for CEOs, executives and board members. Many laud it as the place to be for those that take the creation of franchise value seriously. I’ve even heard it referred to as the unofficial kickoff of banking’s new year.

Just seven months ago, Acquire or Be Acquired once again brought together industry leaders from across the United States to explore merger opportunities, acquisition trends and financial growth ideas.  With 418 banks represented, participants considered strategies specific to lending, deposit gathering and brand-building. They talked regulation, met with exceptional fintechs and networked with their peers under sunny skies.

Not one openly worried about a global pandemic.

Yet here we are, all of us dealing with fast-moving challenges and unimaginable risks.

So what can we do to help?

This is the question that proved the catalyst for our new AOBA Summer Series.  Indeed, we created this free, on-demand, compilation of thought leadership pieces to provide pragmatic information and real-world insight.

With CEOs and leadership teams being called upon to make decisions they have never been trained for, we realized the type of information typically shared in January has immediate merit this summer.  So instead of waiting until winter, this new Summer Series provides both color and context to the tough decisions — those with profound long-term consequences — that confront executives every day.

Ten videos comprise the AOBA Summer Series, with topics appropriate for the C-suite’s or board’s consideration.  Streaming on BankDirector.com, we talk about how important scale has become in the banking industry… how one’s technology strategy cannot be delegated… how it certainly seems that there will be banks that come out of this in a bigger, stronger state.  Here’s a screen-grab of what you’ll come across:

Screen Shot 2020-08-12 at 5.21.32 PM

In one-on-one conversations like these, we acknowledge how net interest margins are compressing — which will drive up efficiency ratios — and credit costs are climbing.  And we look at leadership, appreciating that many are leading in new, more positive and impactful ways.  In addition, this new series provides:

A SNAPSHOT ON CURRENT CONDITIONS
At our January Acquire or Be Acquired Conference, Tom Michaud, President & CEO, Keefe, Bruyette & Woods, A Stifel Company, provided his outlook for the industry. Now, we ask him to update his perspectives on M&A activity and share his take on the potential implications of the pandemic.  

HOW FINTECHS FIT
A growing number of technology companies have been founded to serve the banking industry.  Not all of them have what it takes to satisfy bankers.  During various sessions we learn how a variety of banks approach innovation — and the specific attributes a leadership team should look for in a new fintech relationship.

THE LEVERS OF VALUE CREATION
With nCino’s CMO, Jonathan Rowe, our Editor-in-Chief talks about the levers of creating value vis-a-vis the flywheel of banking. Together, they explain how certain technologies promote efficiency, which promotes prudence, thereby promoting profits, which can then be invested in technology, starting the cycle all over again.

Screen Shot 2020-08-12 at 5.21.46 PM

Hearing from investment bankers, attorneys, accountants, fintechs, investors and — yes, other bankers — about the outlook for growth and change in the industry proves a hallmark for Acquire or Be Acquired, be it in-person or online. 

As this new series makes clear, The future is being written in ways unimaginable just a few months ago.  We invite you to watch how industry leaders are making sense of the current chaos for free on BankDirector.com.

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2 Years’ Worth of Transformation in 2 months

WASHINGTON DC — Microsoft Corp. CEO Satya Nadella noted in late April, “we’ve seen two years’ worth of digital transformation in two months,” due to the speedy adoption and implementation of new technology by the U.S. business sector.

As our team at Bank Director writes, “navigating the short-term impacts of these shifts has bankers working round-the-clock to keep pace, but the long-term effects could differentiate the companies that take advantage of this extraordinary moment to pivot their operations.” This transformation makes up the core of the discussions taking place at Microsoft’s Envision Virtual Forum for Financial Services.

As part of that event, I sat down (virtually) with Luke Thomas, Microsoft’s managing director, U.S. banking and financial providers, to discuss how financial institutions can use this opportunity to modernize their operations. Together, we addressed the adoption of technology, legacy vs. new core providers and how business leaders encourage continued improvement.

This seven-minute video runs on both Microsoft and Bank Director’s websites, with a longer write-up on the Covid-19 Shift appearing here.

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