In advance of Washington & Lee’s annual Entrepreneurship Summit

Good morning from the campus of the 9th oldest university in the United States: Washington & Lee. Yes, I am back in Lexington, VA to speak at my alma mater’s 3rd annual Entrepreneurship Summit. So in lieu of my traditional Friday post on banking, today’s column highlights three points (specific to social media) that I will expand upon in a few hours.


I am fortunate to share today’s stage with a number of successful fellow Generals.  I love this school, and thought to share the presentation I put together for this two-day event (see: W&L 2014 Presentation). As you will see — and maybe hear — I’ve broken it into three parts that all relate to leveraging social media in a small, growing and profitable business:

  1. You can’t manage what you can’t measure — with a look at “the stats” we use at Bank Director to gauge progress and success;
  2. A juxtaposition of JPMorgan Chase’s #AskJPM fail with TD Bank’s wildly popular Automated Thank You Machine; and
  3. Inspiration from our recent FinTech day at the NASDAQ MarketSite and a conversation I had with BNY Mellon’s head of innovation about Staying Relevant While Standing Out.

If you are a student at W&L, I hope you will pay close attention to the final slide in this shared presentation. It speaks to the internship opportunities we have for interested and qualified applicants looking for a paid position in Nashville next summer.

Aloha Friday!

Don’t Be Crowdsourced Out Of Business

This is the fifth and final piece in my series on emerging threats to banks from non-financial companies — one that shines a light on the pooling of money from many different people to make an idea happen. Click on any of these titles to read my previous posts: For Banks, the Sky IS FallingPayPal is Eating Your Bank’s LunchThe Bank of Facebook and Is WalMart the Next Big Bank.

Next week kicks off Shark Week on the Discovery channel… maybe you’ve been inspired by the endless commercials hyping this programming during Deadliest Catch?  Perhaps so inspired that you’ve come up with a brilliant new idea that just needs some money to get it off the ground!  As a creative type (you watch Shark Week after all), you can’t be bothered with your community bank’s draconian business loan process.  No, you want to start right away and are going all in with a crowdsourcing platform (there are some 700 or so) to rally the capital you need to get your project off the ground.  After all, your “financial backers” on such a platform will not profit financially — unlike those greedy banks that certainly will — while your great idea will flourish thanks to this oh-so-captivated audience that gave you their money with nothing expected in return.

Against this backdrop, banks have no chance, right?

Hyperbole aside, it may be easy to underestimate the impact of crowdfunding on financial institutions, dismissing these “purpose-driven marketplaces” as nothing more than online outposts where wacky ideas attract even wackier investors.  While banks possess inherent competitive advantages in today’s digital world (e.g. large customer bases, vast amounts of customer and transaction data along with the capabilities to enable payments, security, and financing), keep in mind a proverb that “the shark who has eaten cannot swim with the shark that is hungry.”  To this end, let me repurpose the thoughts of  LinkedIn’s co-founder Reid Hoffman, who opines:

“Crowdfunding relies on the wisdom of crowds to identify, fund and unleash entrepreneurial innovation far more efficiently than the credit rules of banks can.”

Having looked at the competitive stances taken by Wal-Mart, Facebook and PayPal in previous posts, let me shift my focus to two of the more well-known crowd funding marketplaces that are “democratizing access to capital, fueling entrepreneurship and innovation, and profoundly changing the face of philanthropy at unprecedented scale and impact.”  Rather than deep dive their business models, let me share, in their words, why people gravitate to their respective sites.

Founded in 2008 and headquartered in San Francisco, this site was one of the first to offer crowd funding.

Indiegogo is no longer unique; indeed, numerous crowdfunding sites make billions of dollars of capital accessible to upstarts and entrepreneurs alike.  However, it is one of the most established in the space.  As they share “people usually contribute to campaigns for four different reasons: people, passion, participation, and perks. Often, people contribute to support other people—maybe contributing to the campaign of a friend or another inspiring individual. Others contribute because they’re passionate about a mission, such as women’s health or elementary education. Others are motivated by a desire to participate in something big, like building a new community center in their hometown. And often, people contribute to receive perks, the cool things or experiences they get in return for their contributions.”

A global crowdfunding platform with a stated mission to help bring creative projects to life.

As the company explains, “Mozart, Beethoven, Whitman, Twain, and other artists funded works in similar ways — not just with help from large patrons, but by soliciting money from smaller patrons, often called subscribers. In return for their support, these subscribers might have received an early copy or special edition of the work. Kickstarter is an extension of this model, turbocharged by the web.”


The reason I wrote today’s piece — and the previous four — is simple.  I am convinced that many community banks have real opportunities to expand what banking means to its individual and business customers by offering services that go beyond their traditional business model.  While many bankers recognize the threats presented by Bank of America to their long-term survival, I am concerned that non-bank competition poses an even greater threat.  Essentially, I think more bank CEOs and boards need to take their conversations beyond just cutting branches and full-time employees and consider how they make the bank more efficient by reinventing how they do things.

Whether you agree or disagree, I’d be interested in your thoughts. Feel free to leave a comment below by clicking on the white plus sign (within the grey circle at the bottom of this page) and I invite you to follow me on Twitter (@aldominick) where you can publicly or privately share your thoughts with me.

The Single Greatest Constraint on Growth

With the revenue pressures facing the banking industry being some of the most intense in decades, banks need to think more constructively about their businesses. At the same time, changing consumer behavior could drive the industry to reallocate its resources to less traditional growth channels in order to stay ahead.  In my view, the words of an English naturalist reflect the single greatest constraint on growth today.


Powerful Forces

One of our long-term corporate sponsors, PwC, recently shared their thoughts on the future of the retail banking industry.  In their view, “powerful forces are reshaping the banking industry, creating an imperative for change. Banks need to choose what posture they want to adopt – to lead the change, to follow fast, or to manage for the present. Whatever their chosen strategy, leading banks will need to balance execution against… critical priorities and have a clear sense of the posture they wish to adopt.”  If you, like our friends from PwC, are joining us in New Orleans later this week to dive into this very topic, their compelling “Retail Banking 2020” report might make for good airplane company.

Looking Back in Order to Look Ahead

Last year, John Eggemeyer, a Founder and Managing Principal of Castle Creek Capital LLC, helped me to kick off our inaugural Growth Conference.  As a lead investor in the banking industry since 1990, he shared his views on our “mature industry,” That is, banking follows a historic pattern of other mature industries: excess capacity creates fierce competition for business which in turn makes price, not customer service, the key differentiator.  While offering myriad thoughts on what makes for a great bank,  John did share some hard-to-swallow statistics and opinions for a crowd of nearly 200 bankers and industry executives:

  • Publicly traded banks from $1 billion to $5 billion in assets saw their stock values rise at about half the rate of the broader market as a whole since early 2009.
  • Of the 300 or so publicly traded banks in that size range, only about 60 of them traded at their pre-recession price multiples.
  • In the last 40 years, bank stocks always followed the same pattern in a recession: falling in value quicker than the rest of the market and recovering quicker.

I share these three points to provide context for certain presentations later this week.  Some build on his perspectives while others update market trends and behavior.  Still, an interesting reminder of where we were at this time last year.

Getting Social-er

Yesterday, I shared the hashtag for The Growth Conference (#BDGrow14).  Thanks to our Director of Research — @ehmccormick — and Director of Marketing — @Michelle_M_King — I can tell you that nearly 30% of the attending banks have an active twitter account; 78% of sponsors do.  On the banking side, these include the oldest and largest institution headquartered in Louisiana — @IBERIABANK, a Connecticut bank first chartered in 1825 with over $3.5 billion in assets — @LibertyBank_CT and a Durham, NC-based bank that just went public last month — @Square1Bank.  On the corporate side of things, one of the top marketing and communications firms for financial companies —@wmagency, a tech company that shares Bank Director’s love of orange — @Fiserv and a leading provider of personal financial management — @MoneyDesktop join us.  Just six of many institutions and service providers I’m looking forward to saying hello to.


More to come — from New Orleans, not D.C. — tomorrow afternoon.

Banking’s Biggest M+A Conference (#AOBA14)

In a few days, I’ll be taking to the stage with our editor, Jack Milligan, to welcome some 830 attendees, guests and staff to Arizona and Bank Director’s annual Acquire or Be Acquired conference.  Widely regarded as the financial industry’s premier M&A event, our 20th annual “AOBA” will bring bank CEOs, CFOs, Chairmen and outside directors to the Arizona Biltmore for three days of presentations, workshops, networking… and hopefully, some sun.  These industry leaders join us to explore issues such as strategic alliances, investors’ interests and whether now is the right time to be a buyer — or a seller.  I thought I’d tee up my blogging plans before leaving the snow and ice of Washington D.C. (see below) for the warmth of the Southwest.

photo (36)

Acquire or Be Acquired

On the merger front, one of the big themes over the past few years has been unrealistic expectations between buyers and sellers of banks.  Not surprisingly, sellers think pricing is too low and buyers think sellers’ expectations are too high.  Now, when managed effectively, mergers and acquisitions present necessary and lucrative opportunities — and this particular conference affords bankers and board members the chance to “go deep” into the M&A process in order to represent and protect the interests of their particular bank.  I’ll be spilling a lot of digital ink on a number of financial, legal, accounting and social issues facing bank executives and board members.  Today’s post simply tees up some of the social tools I’m going to use to keep folks current with the discussions.

First and foremost, @bankdirector has a loyal following and does a great job putting info’ out for a bank’s officers and directors.  For this event, we’ve set #AOBA14 as the conference hashtag.  I’ll be tweeting under @aldominick.  Some of my colleagues will be as well; notably, our editor, Jack Milligan via @BankDirectorEd, Managing Editor, Naomi Snyder, with @NaomiSnyder and our Publisher, Kelsey Weaver, with @BankDirectorPub.


Take a look at Bank Director’s LinkedIn page — and feel free to search under “groups” for Bank Director if you want to join in the discussions.

Instagram + Pinterest

I’ll be sharing behind-the-scenes pix from the Biltmore using the hashtag #AOBA14 on Instagram and will pin to “January’s Acquire or Be Acquired from the Arizona Biltmore” with Pinterest.

More to come as prep continues for January’s official welcome.