What Makes M&T A Great Community Bank?

A few months ago, the Wall Street Journal ran a story about M&T Bank appearing “to be just another big regional lender — but that doesn’t account for its CEO.”  Their piece coincided with our editorial team’s preliminary analysis of this strong financial institution.  We wondered: what’s behind M&T’s consistent success, why and how does M&T work like a community bank — and how is M&T playing a unique role reshaping public schools in Buffalo, New York?  These questions form the basis for Bank Director Magazine’s current cover story.  Authored by our Editor-in-Chief Jack Milligan, what follows is an account of how this upstate New York bank grew by making “quality loans to worthy borrowers” while following the lead of its dynamic Chief Executive..
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Any bank that exceeds $50 billion in assets carries the regulatory designation of being a Systemically Important Financial Institution, or SIFI. As such, they are subject to stricter supervision by the Federal Reserve than smaller banks receive, including higher capital requirements and mandatory stress testing. A community bank is an amorphous concept that means different things to different people, but certain characteristics are implied in the common understanding: It usually has a strong business focus and makes most of its money from lending, it has deep roots in the community because that is where its customers are located, and it is small. “Small” within this context is also imprecise. Certainly any institution that meets that definition under $1 billion would be considered a community bank, although many institutions over that threshold level would make the same claim.

But what about a Buffalo, New York-based $123 billion asset bank that operates in eight states and the District of Columbia?

M&T Bank Corp., the top ranked bank in Bank Director’s 2017 Bank Performance Scorecard for the $50 billion and above asset category, lives in both worlds.  M&T is the country’s 18th largest commercial bank and must adhere to all the requirements of a SIFI. But it also has deep roots in the communities it serves—as deep as most smaller banks. M&T not only meets the consumer and business banking needs of those communities, but also spends time and money trying to make them better places to live.

In this, M&T reflects the interests and values of its 83-year-old chairman and chief executive officer, Robert G. Wilmers, who has run the bank since 1983 when it had just $2 billion in assets. Wilmers believes deeply in the importance of strong local communities, if his 2016 letter to M&T’s shareholders is any guide. In the letter, Wilmers expressed concern about the health and well being of middle-class families and small-business owners who form the foundation of M&T’s customer base. The culprits that Wilmers identified are a monetary policy that has kept interest rates low, and excessive regulation. Low rates have benefited the wealthy more than middle-class families, who tend to be savers rather than investors. And M&T’s customer research has found that while small companies could benefit from borrowing at today’s low rates, many business owners are reluctant to expand in what they feel is an overregulated environment.

“Policies designed to benefit the majority have perversely only benefited a few,” he wrote. “The impacts of these decisions … are real,” Wilmers added. “In particular, the middle class and small businesses are losing ground. So, too, are their communities.”

M&T has a relatively straightforward business model compared to other institutions its size. M&T focuses its lending on consumers and small- and middle-sized businesses, and also provides wealth management and fiduciary services through its Wilmington Trust subsidiary to individuals and corporations. It doesn’t have a capital markets operation or wide array of specialty lending businesses, so it has some of the business model characteristics of a community bank, if not the size.

As is common with many Scorecard winners, M&T’s performance was marked by its balance. It did not place first in any of the five metrics that make up the Scorecard—return on average assets, return on average equity, the ratio of tangible common equity to tangible capital, nonperforming assets as a percentage of loans and other real estate owned, and net charge offs as a percentage of average loans. Its best scores were fifth place finishes for return on assets and net charge offs out of 22 banks in the $50 billion and above category. Scorecard winners tend to be those banks that do well on all of the metrics rather than dominating one or two.

The bank reported net income for 2016 of $1.32 billion, a 22 percent increase over 2015. Although fee income growth was essentially flat in a year-over-year comparison, loan growth was strong in 2016, with commercial and industrial credits growing 11 percent and commercial real estate loans 15 percent for the year. Residential real estate loans actually declined 14 percent last year as the bank let many of the jumbo mortgages that came with its 2015 acquisition of Hudson City Bancorp run off. M&T also shed nearly $2.6 billion in interest-bearing deposits it acquired with Hudson City, a thrift that relied on certificates of deposit for most of its funding. This 34 percent decline in high-cost liabilities, combined with its strong loan growth, resulted in a 22 percent rise in the bank’s net interest income for the year. M&T’s efficiency ratio dropped from 58.0 percent in 2015 to 56.1 last year, and this improvement also helped boost its profitability.

Over the long term, M&T has been a good performer in terms of asset quality and their earnings profile … and they tend to do well among large bank peers,” says Rita Sahu, a credit research analyst who covers M&T for Moody’s Investors Service. Sahu points out that M&T’s expenses were higher in 2014 and 2015 because of some charges related to the Hudson City purchase, and also because the bank had to spend heavily to strengthen its Bank Secrecy Act compliance infrastructure before the Fed would approve the Hudson City acquisition. Putting those issues behind it also helped boost the bank’s profitability last year.

M&T has attracted a strong following among institutional investors who value its predictability. The bank hasn’t posted a quarterly loss going back to 1976, and also had the lowest percentage of credit losses among money center and superregional banks during the financial crisis. Investors especially appreciate how much the bank’s stock price has, well, appreciated. Frank Schiraldi, an equity analyst at Sandler O’Neill + Partners who covers M&T, says the stock’s total return since June 1997 is 747 percent. This performance easily beats both the S&P 500 and SNL Mid Cap U.S. Bank Index for total return. M&T’s own investor presentation points out that just 23 of the 100 largest U.S. banks that were operating in 1983 when Wilmers took over are still around today. Among those, M&T ranks number one in stock price appreciation, with a compound average growth rate of 15 percent. “That’s pretty special,” Schiraldi says.

An important contributor to M&T’s performance last year was the acquisition of Hudson City, which closed in November 2015. Headquartered in Paramus, New Jersey, Hudson City operated on a traditional thrift model with its reliance on high- cost time deposits to fund a home loan origination platform that was heavily focused on jumbo mortgages, a product that M&T did not offer. So why did M&T do the deal? “If you looked at our distribution network prior to Hudson City, it was like a bagel and New Jersey was the hole,” explains Vice Chairman Rich Gold. “We had it surrounded, but we had nothing in New Jersey. This strategically filled a hole and now when you look at our distribution we’re covered from New York all the way down to Richmond, Virginia.”

While Hudson City was important for its geography, there were certain things it didn’t offer. As a traditional thrift, it had only a small percentage of core deposits and little in the way of business or consumer loans. “Our challenge now is to make something more out of the franchise than what it was,” says Gold. That transformation is underway, and it’s a process that M&T is very practiced at. Hudson City was M&T’s 23rd acquisition of either branches or whole institutions since 1987, and many of those deals involved thrifts. Gold says that successfully introducing a bank culture to a thrift takes time, and is facilitated by taking experienced M&T managers and seeding them throughout the old thrift franchise. “They understand the drill,” he says. “They understand what needs to be done. They understand the cultural complexion of [M&T] and are able to not only represent that but teach it.”

Announced in August 2012, the Hudson City deal would take over three years to close because of deficiencies the Fed found in M&T’s risk management infrastructure, particularly its BSA and anti-money laundering compliance efforts. The acquisition of Hudson City was going to substantially increase M&T’s asset size, and the Fed required that the bank strengthen its risk management program accordingly. “We probably did outgrow our infrastructure,” says Gold. “That’s shame on us. We missed that cue and we shouldn’t have, and I think we all recognize that and readily admit that.” M&T would eventually invest hundreds of millions of dollars building out an enterprise risk management infrastructure, including BSA and anti-money laundering compliance, an effort that was led by Gold.

And yet for all that, Hudson City has still turned out to be a good acquisition for M&T, even if it took much longer for the benefits to surface than anyone there expected. “It was still accretive from an earnings standpoint and from a tangible book value standpoint, so financially it was still a very good deal,” says Schiraldi. The Hudson City deal could also turn out to be a big driver of M&T’s growth over the next couple of years as the bank continues to build out the New Jersey franchise.

The bank made a $30 million tax-deductible cash contribution to the M&T Charitable Foundation in the fourth quarter of last year, which reduced its net income by $18 million, or 12 cents of diluted earnings per common share. For all of 2016, the M&T Charitable Foundation contributed $28 million to more than 3,600 not-for-profit organizations across its footprint, and its employees contributed over 234,000 volunteer hours.

Of course, many banks support community activities with their time and money. But few bank CEOs have stated their commitment quite so publicly as Wilmers has, and one undertaking in particular reflects both his values and interests—as do many things at the bank. With an undergraduate degree from Harvard College and an MBA from Harvard Graduate School of Business Administration, Wilmers has put his stamp on the bank during the 34 years that he has run it. Its relatively simple business model of checking accounts, loans and investment management advice fits comfortably with Wilmers’ description of the role that banks are supposed to play. “Banks are there to take care of people’s surplus liquidity, and help them buy a car and build a house and manage a business,” he said in an interview. “Part of that is making sure that things go well in the community, and that’s sort of like being for Mother’s Day.”

Wilmers is not the easiest interview for a journalist. He is polite and courteous, but has a tendency to reply to most questions with a brief answer or a deflection. An hour spent with him is to experience a fox hunt from the perspective of the hound. But Wilmers’ commitment to community—and particularly education—is real. He gives full voice to both in his 2016 shareholders letter, with roughly half of its 34 pages devoted to those concerns. (He also spent a lot of time complaining about bank regulation.) But when asked whether the American Dream, as it is embodied in middle-class families and small-business owners, is beginning to fray, Wilmers had this to say: “[Thirty years ago], 70 percent of the work force didn’t have a high school degree. Thirty years from now, 70 percent of the work force will need more than a college degree, in a time when arguably our educational system is getting worse, not better. That’s a big, big problem.”

And it’s a problem that M&T has spent its own time and money on. In 1993, the bank took over School 68, a poorly performing public school in the northeast section of Buffalo, an inner city neighborhood where, today, 33 percent of the residents live below the poverty line, and the unemployment rate is nearly 12 percent. School 68 was converted to a not-for-profit charter school in 2004 and renamed the Westminster Community Charter School, and today it teaches 550 students in kindergarten through the eighth grade. M&T has invested $16.6 million in the school to date, which includes a significant renovation to the building, and it manages all of the school’s operations. “Bob’s whole goal with Westminster was to see if he could change student academic outcomes and students’ lives and [their] families’ lives,” says Pamela Hokanson, president and senior director of schools for Buffalo Promise Neighborhood (BPN), an umbrella organization that oversees the school. As a charter school, Westminster receives about 60 percent of its funding from the State of New York. M&T and the Annie Casey Foundation provide the balance of the funding.

Walking through the facility with Hokanson and Principal Rob Ross on an afternoon in late May of this year, the halls were full of the joyful noise of children who seemed very happy to be there. Tuition is free and the school has a 95 percent attendance rate, the highest of any school in the City of Buffalo, according to Ross. “Of course, social ills creep in every now and then, but our goal is that the students’ experience in school should be safe, it should be positive, and we want them to walk away thinking of something they did today, whether it was the book they read or how they solved a problem with classmates as they were working through math or science,” Ross says.

In 2011, M&T was awarded a five-year, $6 million grant by the U.S. Department of Education to establish BPN, which M&T matched and Hokanson was then able to use as leverage to raise an additional $18 million from other organizations. The Buffalo Promise program now includes two additional schools, one of them an early learning center that was built in 2013 and acts as a feeder to Westminster. M&T contributed $3.5 million toward its construction. The bank also spent approximately $1.5 million renovating homes in the BPN footprint in 2014 and 2015.

M&T’s financial support is vital to BPN in other ways as well. Hokanson is actually an employee of the bank—her bank title is administrative vice president—but she is just one of eight bank employees who work for BPN. Sixteen other BPN employees are funded through an Annie Casey Grant and the M&T Charitable Foundation.

It is doubtful that M&T makes much, if any, money off of the nearly 12,000 residents who live in the BPN community. But it is a community that Wilmers and M&T have invested heavily in nonetheless. And there are children at Westminster whose lives are being changed as a result. Some years back, BPN created a scholarship program, also funded by M&T, that pays the tuition for its best students to attend the top private high schools in Buffalo. There are currently 30 students in the program. In May, the school hosted a dinner that was attended by all of the previous scholarship winners, plus the new class. Ross smiled when he talked about “seeing the dining hall filled with grandmas, and moms and dads and realizing that every one of those kids—yes, they got a scholarship—but they were working really hard not just to keep the scholarship but excel.”

Trying to make lives better. By anyone’s definition, that’s the work of a community bank.

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Our Bank Performance Scorecard is a ranking of the 300 largest U.S. banks, broken into three asset size categories. For a full explanation of the Scorecard and all of the rankings, click here.

Looking for Inspiration? Look to USAA

Quickly:

  • Next week, my team hosts 350+ leaders from across the United States at Bank Director’s annual Bank Audit & Risk Committees Conference at the JW Marriott Chicago.
  • In advance of welcoming people to this popular event, it strikes me that the business of banking remains difficult despite improving economic conditions; indeed, the drive to digitize a bank’s operations continues to pose significant challenges to most.
  • Digital is, in my estimation, a CEO topic that requires a healthy dose of creativity and ambition.  As such, I’m sharing the following article on innovation — authored by John Maxwell and featured in Bank Director magazine’s current “Great Ideas” digital issue.  It focuses on how USAA taps the creative side of its employees to pre-position itself for the next new products, tools and technologies to benefit its diverse customer base.

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“USAA was the first major financial institution to allow customers to deposit physical checks by taking a picture of them on their smartphones, rolling out the service in August 2009. It wasn’t until months later that Bank of America Corp., the nation’s second biggest bank by assets, said it would test the same functionality, by which point upward of 40,000 USAA members had already used the software to deposit more than 100,000 checks. And it wasn’t until the following year that JPMorgan Chase & Co., the nation’s biggest bank by assets, followed suit.

This was neither the first nor the last time that USAA, a niche player in the financial services industry serving current and former members of the military and their families, had beaten larger rivals to the punch in introducing a big, transformative idea. In 2015, the $78 billion asset company became the first major U.S. financial institution to roll out facial and voice recognition technology that allows members to log in to its mobile app without entering a password.

What is it about USAA that explains how it’s regularly at the forefront of big ideas? Is it serendipity, or is there something more at play? And if it’s the latter, are there aspects of USAA’s approach that can be replicated by other banks that want to accelerate their own internal innovation engines?

One explanation for USAA’s success is that the company has always had to think creatively about distribution because of its dispersed member base. With members stationed at military installations around the world, some in active combat zones, simply building more branches has never been a viable distribution strategy. It has a single bank branch at its headquarters in San Antonio, and it wasn’t until 2009 that it began opening a small collection of financial centers near domestic military bases—there are 17 of these centers currently. This is why USAA so readily embraced mobile banking, which enables its members to access their accounts irrespective of location.

Yet, chalking up USAA’s accomplishments in the sphere of innovation to the idea that “necessity is the mother of all invention” doesn’t do the story justice. More than any other major company in the financial services space, USAA has made it a priority to harness each of its 30,000 employees in order to stay on the cutting edge. It began doing so in earnest in 2010 by launching a so-called ideas platform on the company’s intranet. Anyone from the CEO to frontline personnel to security guards can post and vote on ideas that have been entered on the platform. Between 10,000 and 11,000 ideas were submitted in each of the last two years. Ideas that get at least 1,000 favorable employee votes are escalated to USAA’s in-house innovation team overseen by Zack Gipson, USAA’s chief innovation officer.  Last year, 1,206 employee ideas were implemented, while 189 of them have come to fruition thus far in 2017.

USAA also hosts events and challenges for employees that are designed to elicit ideas for new or improved products and services. There are 28 such activities planned this year, taking the form of multi-week coding and design challenges as well as single-day hackathons where teams are tasked with solving a specific problem, says Lea Sims, assistant vice president of employee and member innovation. At an event in 2015, USAA happened upon the idea for voice-guided remote deposit capture, which uses voice commands to guide visually impaired members through the process of depositing checks on a mobile device. The service went live in July of 2016.

On top of these specific initiatives, USAA uses incentives and a consistent messaging campaign to encourage employees to brainstorm and share innovative ideas. Rewards are handed out to winners of challenges, as well as to any employee behind an idea that gets 1,000 votes on the ideas platform—an additional reward is meted out if the idea is implemented, explains Sims. These rewards come in the form of company scrip, which can be redeemed for actual products. A total of 94 percent of USAA employees have participated one way or another in its various innovation channels, with three quarters of a million votes submitted on its internal ideas platform in 2016 alone. “We put a premium on innovation,” says Sims. “It starts in new employee orientation as soon as you walk in the door to be part of our culture.”

USAA has taken steps to crowdsource ideas from its 12 million members, or customers, as well. In February it introduced USAA Labs, where members can sign up to share innovative ideas and participate in pilot programs of experimental products. “The goal of our membership channel is, quite frankly, to replicate the success of our employee channel,” says Sims. Thus far, over 770 members have signed onto the program, which is still in its early stages but could become a major part of USAA’s innovation channel in the future.

Last but not least, sitting atop USAA’s employee and member-based innovation channels is a team of 150 employees who focus solely on bringing new ideas to life. This is its strategic innovation group, which executes on crowdsourced ideas but spends most of its time brainstorming and implementing large, disruptive concepts such as remote deposit capture and biometric logins. It’s this final component of USAA’s strategy that adheres most closely to the institutional structure articulated by Harvard professor Clayton Christensen, a leading expert on the process of innovation. In his seminal book, The Innovator’s Dilemma, Christensen makes the case that established firms should vest the responsibility to bring ideas to life in organizationally independent groups. This is especially important when it comes to disruptive ideas that threaten to cannibalize other products and services sold by the firm, not unlike the way that remote deposit capture reduces the need for physical branches.

In short, the reason USAA has consistently been at the forefront of innovation in the financial services industry has next to nothing to do with serendipity. It traces instead to the company’s strategy of engaging all of its stakeholders in the idea generation process, harnessing the creative power of 30,000 employees, 12 million members and a select team of internal innovators who focus on nothing but bringing new ideas to life. It’s this structural approach to innovation, and the focus on employee engagement in particular, that offers a valuable model for other banks to follow. Indeed, out of the many big ideas USAA has introduced over the years, its strategy of crowdsourcing innovation may very well be the biggest.”

*John J. Maxfield is a writer and frequent contributor to Bank Director.  To read more of this month’s issue (for free), click here.  In full disclosure, I’m a loyal USAA member — as is my entire family — tracing back to my father’s days at the Naval Academy.  I can attest to the “awesomeness” of the bank’s various mobile offerings — like facial recognition, remote check deposit, the integration of Coinbase (that lets me see the balance of my bitcoin and ethereum balances alongside my checking and savings accounts), etc.

Three Strategic Issues Shaping Financial Services

By Al Dominick, CEO of DirectorCorps (parent co. to Bank Director & FinXTech) | @aldominick

Quickly:

  • Banks need to think beyond the notion that they can either build a technology solution or buy it — for inspiration, take a look at how Silicon Valley Bank uses APIs to tap into technology from third party providers.
  • Thanks to products like Amazon’s Alexa, financial institutions must now prepare for “hands-free banking.”
  • Various startups are using behavioral economics to nudge people towards making better financial choices for saving & investing.

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If you have been to any of our conferences, you’ve probably heard me (and others) encourage participants to get up & out from their offices to see what’s happening with their customers, potential partners and competition.  I do my best to practice what is preached — and have recent trips to San Francisco, New York City and Austin to prove it.  As I re-read hand written notes, dog-eared white papers and highlighted sections of annual reports, I realize just how much time I’ve spent talking about technology-driven trends shaping the financial industry.  To me, three of the bigger issues being discussed right now involve:

  1. The push for retail customers, which may already be spurring dealmaking.
  2. How customers experience and interact with their bank — which broadly ties into the question should an institution buy, partner or mimic a fintech; and
  3. Given all the hype surrounding machine learning and advanced decision modeling, leadership teams want to know how to augment a bank’s revenues & relationships with such technologies.

To these three trends, both our editor-in-chief, Jack Milligan, and I agree that most bankers understand the imperative to innovate around key aspects of their business, whether it’s payments, mobile in all its many permutations, lending, new account onboarding or data.

Personally, when it comes to knowing one’s customer (and potential customer), I find any good experience starts with great data.  As Carl Ryden, the CEO and Co-Founder at PrecisionLender, made clear at their recent Bank of Purpose conference, “if you hold your data close to the vest and you don’t do anything with it, it’s not an asset. It’s a liability.”

So with that in mind, let me close by sharing a link to our newest issue of Bank Director magazine.  This is our “Great Ideas” issue, one in which we highlight companies like USAA who crowdsource upwards of 10,000 ideas per year for products and new technology.  At a time when banks of all sizes are starting to take advantage of platform-based services, this new digital issue is one that I am really proud to share.

 

3 Examples of Next’Gen Partnerships

News & Notes from February 13 – 17
By Al Dominick, CEO of DirectorCorps (parent co. to Bank Director & FinXTech) | @aldominick

A few weeks ago, I made note of an interesting new relationship between a bank and a technology firm.  Specifically, BBVA Compass’s announcement that it has been piloting Amazon Lockers in eleven of its Austin-area branches.  This is the first time Amazon Lockers are available with a bank in the United States — and may provide a creative spark to those thinking about how to increase traffic into an existing branch network.

Since sharing my observation on this partnership, I’ve made note of a number of new relationships that reflect the changing nature of the financial industry.  This week, three things caught my eye:

In addition, I took note of Wells Fargo forming a new innovation team (called Payments, Virtual Solutions, and Innovations) to better build out its digital banking experiences.  The three pillars of this effort revolve around payments, artificial intelligence and APIs. For Wells Fargo — and banks in general:

  • Payments are a critical driver of relationships for consumer, small business, and commercial and corporate banking customers.
  • In terms of artificial intelligence, the bank sees an increasing number of opportunities to better leverage data to provide personalized customer service through its bankers and digital channels.
  • Application Programming Interfaces (APIs) technology enables commercial and corporate banking customers to integrate products, services and information into their own digital environments.

So as financial institutions continue to search for new growth opportunities, I intend to share weekly recaps like this as a way to share what I find compelling.  Let me know what you think — and if there are other news & notes I might share.

10 Banks and Fintechs Doing it Right

In advance of April’s FinXtech Summit
By Al Dominick, CEO of DirectorCorps (parent co. to Bank Director & FinXTech) | @aldominick

Quickly:

  • An increasing number of financial institutions are using partnerships with technology companies to improve operations and better meet customer needs.
  • For the past few months, banks and/or fintechs submitted case studies on specific technology solutions helping financial institutions produce real, quantifiable results to our team at FinXTech.
  • With more then 100 submissions in hand, a committee of FinXTech advisors worked with our team to compile a top-10 list during Bank Director’s Acquire or Be Acquired Conference in Arizona last week.

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Throughout Bank Director’s annual Acquire or Be Acquired conference, I found myself in quite a few conversations about the continually changing nature of financial services. Many of these discussions revolved around the possibilities generated by traditional institutions partnering with emerging technology firms.  Some of these took place on-stage; for instance, I opened the second full day of the conference by polling an audience of 900+ on a variety of technology-related issues:

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With results like these precipitating editorial coverage from our team and attendees alike, you’ll probably understand why I find the just-released ten finalists for our “Best of FinXTech Awards” so compelling.  Indeed, as the financial landscape continues to evolve, and executives grapple with a fast-changing operating environment that requires partnerships and collaboration, each of these relationships shows what is really possible when leaders explore something new together.

  • Bank of Nova Scotia (Scotiabank) + Sensibill: Scotiabank’s customers can store, organize and retrieve paper and electronic receipts through the Toronto, Canada bank’s mobile banking app and wallet, the result of a partnership with Sensibill, also based in Toronto. The service was launched in October 2016.
  • Franklin Synergy Bank + Built Technologies, Inc.: Built Technologies, in Nashville, Tennessee, improved the loan administration process for Franklin Synergy Bank, in Franklin, Tennessee. The $3 billion asset bank now manages a greater number of construction loans with fewer staff.
  • Green Dot (Go Bank) + Uber: Pasadena, California-based Green Dot Corp., which issues prepaid credit cards, partnered with Uber to provide the San Francisco transportation company’s drivers a fee-free debit card and an instant pay solution that allows drivers to be paid instantly.
  • IDFC Bank + TATA Consultancy Services (TCS): Due to a regulatory mandate, India’s IDFC Bank had just 18 months to expand into rural areas to better serve unbanked customers. The bank’s partnership with TCS, based in Mumbai, India, included the use of micro ATMs, which are modified point-of-sale terminals that expand the bank’s reach in rural areas.
  • National Bank of Kansas City + Roostify: San Francisco-based Roostify improved National Bank of Kansas City’s formerly inefficient and incomplete digital mortgage application process. Customers at the bank, based in Overland Park, Kansas with more than $600 million in assets, can now fill out a mortgage application in a little as 20 minutes, with no need for a phone call or trip to the branch to visit a loan officer.
  • Somerset Trust Company + BOLTS Technologies: BOLTS, based in Bethlehem, Pennsylvania, improved the account opening process at Somerset Trust Company, saving the $1 billion asset community bank in Somerset, Pennsylvania, roughly $200,000 in the first year by better automating the process and reducing error rates. Customers can start and complete the process on multiple channels.
  • Toronto-Dominion Bank (TD Bank) + Moven: TD Bank, based in Toronto, Canada, launched a real-time money management application in April 2016, developed by Moven in New York.
  • USAA + Nuance: USAA, based in San Antonio, Texas, made its website a little smarter in 2016 with the virtual assistant Nina, which provides support for USAA’s members. This use of artificial intelligence is the result of a collaboration with Nuance in Burlington, Massachusetts.
  • Woodforest National Bank + PrecisionLender: Partnering with Charlotte, North Carolina-based PrecisionLender to improve its loan pricing strategy helped $4.8 billion asset Woodforest National Bank, in The Woodlands, Texas, grow commercial loans by 16 percent and gain almost 20 basis points in net interest margin.
  • WSFS Bank + LendKey: WSFS Financial Corp., headquartered in Wilmington, Delaware, with $6.6 billion in assets, partnered with the lending platform LendKey, in New York, to expand the bank’s consumer loan portfolio with a student loan and refinancing product.

All ten of these partnerships demonstrate the strongest combination of collaboration and results.  For those interested, my colleague Kelsey Weaver (the President of our FinXTech platform) announces the three “winners” on April 26, 2017, during the FinXTech Annual Summit, at the Nasdaq MarketSite.

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Closing bell ceremony at Nasdaq / Bank Director + FinXTech’s FinTech Day (March 1, 2016)

In advance of that announcement, I invite you to follow me on Twitter via @AlDominick, FinXTech’s President, Kelsey Weaver @KelseyWeaverFXT, @BankDirector and our @Fin_X_Tech platform and/or check out where and how this annual Summit — and these awards — fits into FinTech Week New York that we are hosting along with Empire Startups starting April 24.

We Are On To FinTech Week

#AOBA17 conference intel (Friday)
By Al Dominick, CEO of Bank Director | @aldominick

Quickly

  • The “bank of the future” is not about technology, it is all about customers.
  • For many financial institutions, the time may be right to retire legacy systems for cloud-based platforms.
  • Numerous financial technology companies are developing new strategies, practices and products that will dramatically influence the future of banking..

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The intersection of technological innovation with strong depository franchises may lead to more efficient banking processes, reductions in fraud and a win/win/win for banks, financial technology firms (fintechs) and consumers.  Globally, nearly $23 billion of venture capital and growth equity has been deployed to fintechs over the past five years, and this number is growing quickly. Still, the nature and extent of impact that fintechs have on the industry remains unclear.

Throughout this week’s Acquire or Be Acquired conference, bank CEOs talked about the continually changing nature of financial services — with fintech often front and center.  For many, collaboration between traditional institutions and emerging technology firms bodes well for their future.  Here, Bank Director’s FinXTech provides authoritative, relevant and trusted content to a hugely influential audience, specifically:

  • Fintechs who view banks as potentially valuable channels or distribution partners;
  • Banks looking to grow and/or innovate with fintech companies’ help and support; and
  • Institutional investors, venture capitalists, state & federal regulators, government officials and academicians helping to shape the future of banking.

We designed FinXTech as a peer-to-peer resource that connects this hugely influential audience around shared areas of interest and innovation.  As a host of FinTech Week in New York City this April 24 – 28 (along with Empire Startups), we bring together senior executives from banks, technology companies and investment firms from across the U.S. to shine a light on what is really generating top line growth and bottom line profits through partnerships, collaboration and investments.

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Given the changing nature of banking today, this week-long event in New York City looks at the various issues impacting banks, non-banks and technology companies alike.  So as we move towards FinTech Week in New York City, I invite you to follow me on Twitter via @AlDominick, FinXTech’s President, Kelsey Weaver @KelseyWeaverFXT@BankDirector and our @Fin_X_Tech platform and/or check out the FinTech Week New York website for more.

Opportunities Abound at Acquire or Be Acquired

#AOBA17 conference intel (Monday)
By Al Dominick, CEO of Bank Director | @aldominick

Quickly

  • Earnings pressures, regulatory/compliance costs + the impact of technology will continue to make it more difficult for banks to compete and be profitable, which will continue to generate consolidation.
  • The increase in stock prices and capital raising activity is likely to provide an additional catalyst for M&A in early 2017
  • Raising capital is an immediate and viable option for most banks today

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Here at Bank Director’s annual Acquire or Be Acquired conference, it is clear that to maximize shareholder value, a bank’s leadership must not only plan for the future but also take advantage of today’s opportunities.

For those interested in following the conference conversations via social channels, I invite you to follow me on Twitter via @AlDominick, the host company, @BankDirector and its @Fin_X_Tech platform, and search & follow #AOBA17 to see what is being shared with (and by) our attendees.