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!!

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.

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.

What APIs Can Do For Your Bank

WASHINGTON, DC — In 2017, Bank Director magazine featured a story titled “The API Effect.” It showed how banks could earn revenue by using application programming interfaces, or APIs. It considered the pros (and cons) of banks turning themselves into technology platforms. And it concluded with a prediction:

APIs will be so prevalent in five years that banks who are not leveraging them will be similar to banks that don’t offer a mobile banking application.

Less than three years later, the banking industry is on a fast track to proving that hypothesis.

Let’s start with the basics. An application program interface, or API, controls interactions between software and systems. As the American Banker recently shared, “APIs are the glue of the internet and allow digital businesses to interact seamlessly. Banks create a digital-first business model by offering services, such as treasury or loan origination, through APIs in an open-banking system.”

So to help bank executives better understand the promise and potential of APIs, our team developed a special FinXTech Intelligence Report. In it, we explore use cases with a focus on banking, and detail the forces driving adoption of the technology among financial institutions of all sizes.

Divided into five parts, we explore:

— Market trends driving the adoption of APIs;
— Actionable API use cases for growing revenue and creating efficiencies;
— An in-depth case study of TAB Bank, which reimagined its data infrastructure with APIs;
— Key considerations for leadership teams developing an API strategy; and
— A map of the API provider landscape, highlighting the leading companies enabling API transformation.

Kudos to the talented Amber Buker for spearheading this effort. As she makes clear, there are several ways for banks to implement APIs. Some will work with their cores (e.g. FIS, Fiserv and Jack Henry) to access the necessary connectivity. Ready-made APIs from fintech providers can quickly address the most common connectivity requirements.

For more complex use cases — like large banks running on old mainframes — the line from systems of record to end users could be longer, with several providers along the path. Regardless of where you are on your journey, understanding the landscape of API providers helps banks get a firmer grasp on the technology and start conceptualizing the scale and design of their potential API project.

To learn more about how banks use APIs, I invited you to download, for free, our FinXTech Intelligence Report, APIs: New Opportunities for Revenue and Efficiency

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.

Tech Trends in Banking (Since WFH Began)

WASHINGTON, DC — Since March, I’ve talked with quite a few bank CEOs about their interest in modern and secure technologies. The underlying focus? Improving the experience provided to their customers.

In parallel to such one-on-one conversations, my colleague, Emily McCormick, surveyed 157 independent directors, chief executive officers, chief operating officers and senior technology executives of U.S. banks to understand how technology drives strategy at their institutions — and how those plans have changed due to the Covid-19 pandemic.

She conducted the survey in June and July — and we just released the results in Bank Director’s 2020 Technology Survey, sponsored by CDW. Here are a few key takeaways:

Focus on Experience
Eighty-one percent of respondents say improving the customer experience drives their bank’s technology strategy; 79% seek efficiencies.

Driving the Strategy Forward
For 64% of respondents, modernizing digital applications represents an important piece of their bank’s overall technology strategy. While banks look to third-party providers for the solutions they need, they’re also participating in industry groups (37%), designating a high-level executive to focus on innovation (37%) and engaging directors through a board-level technology committee (35%). A few are taking internal innovation even further by hiring developers (12%) and/or data scientists (9%), or building an innovation lab or team (15%).

Room for Improvement
Just 13% of respondents say their small business lending process is fully digital, and 55% say commercial customers can’t apply for a loan digitally. Retail lending shows more progress; three-quarters say their process is at least partially digital.

Spending Continues to Rise
Banks budgeted a median of $900,000 for technology spending in fiscal year 2020, up from $750,000 last year. But financial institutions spent above and beyond that to respond to Covid-19, with 64% reporting increased spending due to the pandemic.

Impact on Technology Roadmaps
More than half say their bank adjusted its technology roadmap in response to the current crisis. Of these respondents, 74% want to enhance online and mobile banking capabilities. Two-thirds plan to upgrade — or have upgraded — existing technology, and 55% prioritize adding new digital lending capabilities.

Remote Work Permanent for Some
Forty-two percent say their institution plans to permanently shift more of its employees to remote work arrangements following the Covid-19 crisis; another 23% haven’t made a decision.

Interestingly, this survey reveals that fewer banks rely on their core provider to drive their technology strategy. Forty-one percent indicated that their bank relies on its core to introduce innovative solutions, down from 60% in last year’s survey. Sixty percent look to non-core providers for new solutions. Interested to learn more? I invited you to view the full results of the survey on BankDirector.com.

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:

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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.

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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.

Who is the Next nCino?

WASHINGTON, DC — With this week’s news that nCino is readying itself for an IPO, I thought to postulate about who “the next nCino” might be in the fintech space. By this, I mean the tech company about whom bank executives cite as doing right by traditional institutions.

For context, nCino developed a cloud-based operating system for financial institutions. The company’s technology enables both customers and financial institutions to work on a single platform that’s optimized for both retail and commercial accounts. In simple terms, they provide everything from retail and commercial account opening to portfolio management for all of a bank’s loans.

In its IPO filing, the company says it works with more than 1,100 financial institutions globally — whose assets range in size from $30 million to $2 trillion. Personally, I remember their start and been impressed with their growth. Indeed, I’ve known about nCino since its early Live Oak Bank days. I’ve gotten to know many on their executive team, and just last Fall shared a stage with their talented CEO, Pierre Naudé, at our annual Experience FinXTech conference in Chicago.

Al Dominick, CEO of Bank Director + FinXTech, Frank Sorrentino, Chairman & CEO of ConnectOne Bank and Pierre Naude, CEO of nCino at 2019’s Experience FinXTech Conference in Chicago, IL.

So as I think about who might become “the next” nCino in bankers’ minds across the United States, I begin by thinking about those offering solutions geared to a bank’s interest in Security, leveraging Data + Analytics, making better Lending decisions, getting smarter with Payments, enhancing Digital Banking, streamlining Compliance and/or improving the Customer Experience. Given their existing roster of bank clients, I believe the “next nCino” might be one of these five fintechs:

While I have spent time with the leadership teams from each of these companies, my sense that they might be “next” reflects more than personal insight. Indeed, our FinXTech Connect platform sheds light on each company’s work in support of traditional banks.

For instance, personal financial management (PFM) tools are often thought of as a nice perk for bank customers, designed to improve their experience and meet their service expectations. But when a PFM is built with data analytics backing it, what was seen as a perk can be transformed into a true solution — one that’s more useful for customers while producing revenue-generating insights for the bank. The money management dashboard built by Utah-based MX Technologies does just that.

Spun out of Eastern Bank in 2017 (itself preparing for an IPO), Boston-based Numerated designed its offering to digitize a bank’s credit policy, automate the data-gathering process and provide marketing and sales tools that help bank clients acquire new small business loans. Unlike many alternative lenders that use a “black box” for credit underwriting, Numerated has an explainable credit box, so its client banks understand the rules behind it.

Providing insight is something that Autobooks helps small business with. As a white-label product that banks can offer to their small-business customers, Autobooks helps to manage business’s accounting, bill pay and invoicing from within the institution’s existing online banking system. Doing so removes the need for small businesses to reconcile their financial records and replaces traditional accounting systems such as Quickbooks.

The New York-based MANTL developed an account opening tool that comes with a core integration solution banks can use to implement this and other third- party products. MANTL allows a bank to keep its existing core infrastructure in place while offering customers a seamless user experience. It also drives efficiency & automation in the back-office.

Finally, Apiture’s digital banking platform includes features such as digital account opening, personal financial management, cash flow management for businesses and payments services. What makes Apiture’s business model different from most, though, is that each of those features can also be unbundled from the platform and sold as individual modules that can be used to upgrade any of the bank’s existing systems.

Of course, these are but five of hundreds of technology companies with proven track records of working with financial institutions. Figuring out what a bank needs — and who might support them in a business sense — is not a popularity contest. But I’m keen to see how banks continue to engage with these five companies in the months to come.

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.

Experience FinXTech As We #WFH

WASHINGTON, DC — By the time the NFL announced plans to host the draft from various remote locations, nearly every other sports league had postponed or canceled their events.

The decision raised eyebrows.

The NFL draft has become a must-attend in-person event, as evidenced by the record-breaking 600,000 turnout in Nashville, Tennessee, last year. As a fan, I wondered if the league was putting their own interests too far ahead of others by going forward with a new, unproven format just to keep to this activity on the calendar.

It turns out, the digital nature of the three-day event resonated in many positive ways. The draft was viewed by 55 million viewers over the three-day event, according to the league. Naturally, some of the viewership reflected an appetite for new, non-pandemic related content. But from a business perspective, it showed how migrating an in-person event entirely online could, in a pinch, work.

As we all try our best to live normal lives from our homes, the NFL’s success with the draft gives me confidence in our decision to go remote with our annual Experience FinXTech.

Much as the NFL drew a great audience to Music City last year, so too were we excited to welcome a stellar audience to Bank Director’s hometown in early May. Just as the NFL figured out how to provide viewers with new glimpses into their team’s futures, so too will our Experience FinXTech as we move online. Ours will just be in terms of how and where financial technology companies and financial institutions might develop relationships that beget future successes.

Experience FinXTech parallels the NFL draft based on the concept of team-building. Just as every NFL franchise faces its own challenges, so too does every financial institution. Indeed, the ever-expanding digital chasm between the biggest banks and community institutions remains a major strategic challenge in terms of talent, tools and dollars spent.

While there is no one-size-fits-all approach to building a team, there are lessons that executives and leadership teams might entertain from their peers during a program like this one. Indeed, we have heard and seen incredible examples of community banks pulling together to serve their constituents as best they can, however they can, during this time. This program allows us to share examples.

Bank Director’s desire to help community banks succeed in all circumstances provides an impetus for moving to video and webinars instead of waiting until the late fall to meet in person. Helping banks and fintechs get smarter about immediate opportunities to develop meaningful relationships is incredibly relevant. The time is now to assess a business strategy and make decisions that could reshape your institution’s future. Access to timely, verified and reliable information is something we didn’t want to delay in providing.

Indeed, Experience FinXTech will touch on areas where technology can assist banks to provide counseling, assistance and a personal touch to their existing and potential customers. In addition, we talk about authentication. The need to embrace the cloud. Filling in the missing pieces in the digital commercial banking product set.

Beginning on May 5, we take a pragmatic approach to new business relationships, collaborations and strategic investments. We offer virtual demonstrations to help viewers see proven technologies available to banks with regards to security, data and analytics, internal systems, lending, digital banking, payments, compliance and the customer experience.

With so many elements of our economy being challenged, we know our “next normal” will look very different from what we’ve become accustomed to. Connecting interests, and ideas, to help banks and fintechs navigate their futures is why we ultimately decided to offer this year’s experience online, for free, to anyone interested in joining us.

I look forward to welcoming people to this year’s Experience FinXTech and promise that references to certain NFL teams will be kept to a minimum.

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Thanks to the support of these companies, we are able to extend complimentary registration for Experience FinXTech. To sign up, please click here.

3 Approaches to Shaping a Bank’s Digital Future

  • To compete in this new era of heightened digital competition, it is more important than ever for banks of all sizes to stay committed to the quest of constant improvement.

WASHINGTON, DC — How should you position your bank for the future — or, for that matter, the present?  This is one of the most perplexing questions challenging leadership teams right now.  It is not a new consideration; indeed, the industry has been in a constant state of evolution for as long as anyone on our team can remember. Yet lately, it has taken on a new, possibly more existential sense of urgency.

Fortunately, there are examples of banks, of different sizes and a variety of business models, keeping pace with changing consumer expectations and commercial clients’ needs. The industry seems to be responding to the ongoing digital revolution in banking in three ways.

#1: Forge Your Own Digital Frontier

The biggest banks—those like JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co.—have the resources to forge their own paths on the digital frontier. These banks spend as much as $11 billion a year each on technology. Each hires thousands of programmers to conceptualize digital solutions for customers. And you know what? Their results are impressive.

As many as three-quarters of deposit transactions are completed digitally at these banks (take a minute and let that number sink in).  A growing share of sales, account openings and money transfers take place over these banks’ digital channels as well. This allows these banks to winnow down their branch networks meaningfully while still gaining retail deposit market share.

*IMO, the next step in their evolution is to combine digital delivery channels with insights gleaned from data. It’s by marrying the two, I believe, that banks can gain a competitive advantage by improving the financial lives of their customers.

#2: Look Outside For Tailored Solutions

Just below the biggest banks are super-regional and regional banks.  They too are fully embracing technology, although they tend to look outside their organizations for tailored solutions that will help them compete in this new era (rather than develop the solutions themselves).

These banks talk about integration as a competitive advantage. They argue that they can quickly and nimbly integrate digital solutions developed elsewhere—growing without a burdensome branch network while also benefiting from the latest technologies without bearing the risk and cost of developing many of those solutions themselves. It is a way, in other words, for them to have their cake and eat it too.

U.S. Bancorp and PNC Financial Services Group fall into this category. Both are reconfiguring their delivery channels, reallocating funds that would be spent on expanding and updating their branch networks to digital investments.

In theory, this makes it possible for these banks to expand into new geographic markets with far fewer branches. Indeed, U.S. Bancorp announced recently that it will use a combination of digital channels and new branches to establish a physical retail beachhead in Charlotte, North Carolina. PNC Financial is doing the same in Dallas, Texas, among other markets.

#3: Go Off-the-Shelf

Finally, smaller community banks are adopting off-the-shelf solutions offered by their core providers—Fidelity National Information Services (FIS), Fiserv and Jack Henry & Associates.

This approach can be both a blessing and a curse. It is a blessing because these solutions have enabled upwards of 90 percent of community banks to offer mobile banking applications—table stakes nowadays in the industry. It is a curse because it further concentrates the reliance of community banks on a triumvirate of service providers.

In the final analysis, however, it is important to appreciate that smaller banks based outside of major metropolitan areas still have a leg up when it comes to tried-and-true relationship banking. Their share of loans and deposits in their local markets could even grow if the major money-center banks continue fleeing smaller markets in favor of big cities.

Smaller regional and community banks dominate small business loans in their markets—a fact that was recently underscored by LendingClub Corp.’s decision to close its small business lending unit. These loans still require local expertise—the type of expertise that resides in their hometown banks. The same is true of agriculture loans.

Let’s Not Forget: Banks Are Still Banks

Trust is still the top factor cited by customers in the selection process. And loans must still be underwritten in a responsible way if a bank wants to survive the irregular, but not infrequent, cycles that define our economy. The net result is that some community banks are not only surviving in this new digital era, they are thriving.

But this isn’t a call to complacency—far from it.

5 Trends from Acquire or Be Acquired 2019

WASHINGTON, DC — To get a sense of what trended at Bank Director’s 25th annual Acquire or Be Acquired conference, here’s a link to five video check-ins.  All 2 minutes or less in length, these summarize various topics and trends shared with 1,300+ attendees.

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SAVE THE DATE:

Acquire or Be Acquired Conference
January 26-28, 2020 | Arizona Biltmore Resort | Phoenix, AZ

For early-bird registration, please click here.