- A bank’s CEO, Chairman and board of directors face a number of challenges in today’s ever competitive, highly regulated and rapidly evolving financial services industry.
By Al Dominick, CEO of DirectorCorps — parent co. to Bank Director & FinXTech
ATLANTA — Complex regulations, technological innovations and a highly competitive environment that leaves little room for error have placed unprecedented demands on the time and talents of bank boards. Still, no one I’m with today seems interested in pity or sympathy. To wit, I’m in Atlanta, at the Ritz-Carlton Buckhead, as we host Bank Director’s annual Bank Board Training Forum. With us are 200+ men and women committed to strengthening their bank’s performance by enhancing the skills and abilities of their boards.
I’m buoyed by their collective optimism, especially having surfaced myriad governance issues, compliance challenges, audit responsibilities, risk concerns and areas of potential liability. What follows are five takeaways from presentations made today that are growth, risk or team-oriented.
- When it comes to growing one’s bank, an acquisition of another institution certainly helps a buyer achieve operating scale efficiencies, which in turn increases its valuation.
- In addition to traditional M&A as a driver of growth, we are seeing more partnerships with (and outright acquisitions of) non-banks in order to enhance non-interest income and the expansion of net interest margins.
- Personally, I appreciated Jim McAlpin (a partner at the law firm of Bryan Cave) for elaborating on the phrase “Strong Governance Culture.” As he explained, the regulatory community takes this to mean a well developed system of internal oversight and a board culture focused on risk management.
- When it comes to risk, financial institutions face a quite a few. Indeed, Eve Rogers, a Partner at Crowe Horwath, touched on cybersecurity, economic factors, regulatory changes, shrinking margins and fee restrictions. As she made clear, proactively identifying, mitigating, and, in some cases, capitalizing on these risks provides a distinct advantage to the banks here with us.
- In terms of compensation, a good checklist for all banks includes (a) the bank’s compensation philosophy, (b) specific details for how to incorporate a performance plan against a strategic plan and (c) details around how one’s compensation peer group was formed — and when was it last updated.
Tomorrow morning, I share some new ideas for approaching technology in terms of growth and efficiency given the digital distribution of financial goods and services. As I noted from the stage, we’re seeing some banks, rather than hire from the ground up, take a plug-and-play approach for partnering (or acquiring) FinTech companies. While I certainly intend to talk about the culture and team aspects of technology tomorrow, my focus goes to how and where machine learning, RegTech, payments, white labeling opportunities and core providers allow financial institutions to present a cutting-edge looks and feels to its customers under the bank’s brand. (*If you’re interested, click here.)
It has been said that the best acquisition a bank can make is of a new customer. But let’s face it: for most banks, organic growth is hard. For those wanting to grow revenue, deposits, brand, market size and market share, we hosted a “Growth” conference at the Ritz-Carlton in New Orleans earlier this week. Below, some pictures from our time in the Crescent City along with links to organic growth & FinTech-specific content.
By Al Dominick // @aldominick
Clearly, there has been an enormous shift in asset concentration and customer loyalty during the past two decades. Today, the ten biggest banks in the U.S. have more assets than all of the other institutions combined. Concurrently, major consumer brands such as Apple and Google have emerged as significant non-bank competitors. As such, we designed this year’s Bank Board Growth & Innovation Conference around the concept of building sustainable franchise value.
To stay both relevant and competitive, I believe that building a culture of disciplined growth that encourages creativity and risk taking is essential. For a bank’s CEO, executive team and board, this requires a combination of knowledge, skill and courage – things we designed this conference, a complement to our annual Acquire or Be Acquired Conference, to provide. Behind the scenes, our team works hard to deliver a “Four Seasons”-level of service — and I am especially proud of how everyone navigated the weather challenges that hit the city on Monday. It was great to arrive to so many smiling faces!
Welcoming people to the Ritz-Carlton (photo c/o Linda Reineke, Riverview Photography)
Trying to figure out what to do with our hands (photo c/o Linda Reineke, Riverview Photography)
Mika leading a social media session (photo c/o Linda Reineke, Riverview Photography)
Dueling apps? (photo c/o Linda Reineke, Riverview Photography)
Joan, Jack and Naomi (photo c/o Linda Reineke, Riverview Photography)
Jack always gets the best ‘from stage’ pix! (photo c/o Linda Reineke, Riverview Photography)
Calmer times at MSY
Hand-rolled cigars at the Ritz
Jack & the head of BNY Mellon’s Strategic Growth Initiatives (photo c/o Linda Reineke, Riverview Photography)
no words needed
Michelle & Laura, coordinated and tied-to-the-hip!
Mika with some of our guests (photo c/o Linda Reineke, Riverview Photography)
Kelsey with a few of our sponsors (photo c/o Linda Reineke, Riverview Photography)
Thanks to our friend Ron Samuels, CEO of Avenue Bank, for sharing his IPO story with us (photo c/o Linda Reineke, Riverview Photography)
Still trying to figure out what to do with our hands (photo c/o Linda Reineke, Riverview Photography)
921 Canal Street… our “home-away-from-home” aka the Ritz-Carlton
For those curious about the topics and trends covered at the event, you can up on what was covered by clicking on:
In addition, take a look at what our editor, Jack Milligan, has shared on his blog, The Bank Spot. And since its Friday, I’ll take the liberty of closing with laissez les bons temps rouler!