An Early Look at the 2019 Acquire or Be Acquired Conference

Quickly:

  • Bank Director’s 2019 Acquire or Be Acquired Conference takes place next January 27 – 29 at the JW Marriott Phoenix Desert Ridge in Phoenix, AZ.  To register, click here.

WASHINGTON, DC — As the last few hours of July tick by, our team continues to build towards next winter(!) and the premier bank M&A event for CEOs, senior management and board members: Bank Director’s annual Acquire or Be Acquired Conference. This special event brings together key bank leaders from across the country to explore merger & acquisition strategies, consolidation trends and financial growth opportunities.

Earlier this year, we welcomed 1,200+ to the Arizona desert — and anticipate a similar audience when we return a week before next year’s Super Bowl. We’ve recently added a lot of new information on January’s program to BankDirector.com; if you’re interested to see what we’re planning, I invite you to take a look.

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In addition to Acquire or Be Acquired, I am really excited to host two conferences before we return to the desert.  On September 10-11 at the Four Seasons Hotel Chicago, we host our very popular Bank Board Training Forum.  This two-day program provides bank directors with the education and training needed to address the issues and challenges facing them in today’s ever competitive, highly regulated and rapidly evolving banking and financial services industry.

From November 5 – 7, at the Four Seasons Resort & Club Dallas at Las Colinas (a short hop from DFW airport), we convene Bank Director’s annual Bank Compensation & Talent Conference to focus on the recruitment, development and compensation of a bank’s most essential talent.  While in Dallas, leading advisers share their perspectives on building and supporting the best teams by providing first-hand information on the strategies and plans being used by successful banks today.

If you’re interested in any of these three exceptional programs, you can learn more here.

What (Bank) Directors Think

Quickly:

CHICAGO — Guess what?  As institutions continue to seek out growth and efficiencies through technology, they in turn expose themselves to new risks and liabilities. Understanding the two-sided nature of this proverbial coin reflects just one of the many nuanced conversations that took place during our annual Bank Audit & Risk Committees Conference.  If you’re not familiar with this exclusive event, we invite bank leaders from across the country to take a broad and strategic view at the risk landscape, while also focusing on specific actions to improve a bank’s performance.

Indeed, our team put together an agenda filled with opportunities to improve existing audit and risk functions.  In addition, we surfaced new ideas around issues and topics such as cybersecurity, credit quality, blockchain, rising interest rates and financial reporting.

Personally, I was thrilled to welcome more than 400 men and women to the Swissotel Chicago — with over 300 participants comprising bank CEOs, chairmen, board members, CFOs, CROs, senior executives and internal auditors.  Throughout our time together, we took the opportunity to pose a series of questions to this hugely influential and knowledgeable audience.  As we discovered, the increasing level of U.S. debt proved the biggest macroeconomic concern for this group by a wide margin.  Yes, we polled this group using an audience response device and found 52% placed this issue as their top concern — far outpacing the 15% who cited a potential recession and 13% who pointed towards a political crisis.

Such in-person polling provides quite a bit of insight as to where we might be heading as an industry and an economy.  What follows are five additional survey results from this year’s event on how this experienced audience feels about various hot topics.

Q: What do you think is the biggest risk to the industry?

54% = Technology changes and FinTech
20% = Recession risk and loan quality
17% = Flattening yield curve
6% = Pushed out by consolidation
4% = Regulatory scrutiny

Q: What are your expectations for deposit competition in your markets over the next year?

78% = We face stiff competition; deposit pricing will be a key concern
13% = Our ability to compete for deposits will improve as rates rise
9% = Unsure

Q: As rates rise, are you concerned about loan terms within the bank’s existing loan portfolio?

50% = No
35% = Yes, but for a short period of time
10% = Yes, I’m deeply concerned
4% = Unsure

Q: What is your greatest concern about deploying RegTech within your bank?

23% = Updates to internal processes / infrastructure
22% = Cost of RegTech solutions
21% = Identifying valid solutions
17% = Vetting providers / third party management
15% = Internal skills
3% = Regulatory acceptance

Q: Do you believe the bank’s board has the necessary level of cybersecurity expertise?

78% = No
18% = Yes
4% = Unsure

I’ll keep my observations on these findings to personal conversations… That said, from improving risk oversight, mastering new reporting requirements and staying ahead on compliance, this year’s conference provided practical takeaways for participants to bring back to their banks.  Curious to see what we covered?  I encourage you to take a look at BankDirector.com or search for @BankDirector and #BDAudit18 on Twitter.

3 Trends (and 3 Issues) Every Bank’s Board Needs To Consider

Quickly:

  • The challenges faced by financial institutions today are as numerous as they are nuanced. Be it data security, emerging technology, fraud, crisis management and/or the effectiveness of internal controls, I opened the 12th annual Bank Audit & Risk Committees Conference by laying out a number of key governance, risk and compliance issues and trends.

CHICAGO — While a sophomore at Washington & Lee University, a professor loudly (and unexpectedly) chastised a close friend of mine for stating the obvious. With a wry laugh, he thanked my classmate “for crashing through an open door.” Snark aside, his criticism became a rallying cry for me to pause and dive deeper into apparently simple questions or issues.

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I shared this anecdote with some 400 attendees earlier today; indeed, I teed up Bank Director’s annual program by reminding everyone from the main stage that:

  1. We’re late in the economic cycle;
  2. Rates are rising; and
  3. Pressure on lending spreads remains intense.

Given the composition of this year’s audience, I acknowledged the obvious nature of these three points. I did so, however, in order to surface three trends we felt all here should have on their radar.  I followed that up with three emerging issues to make note of.

TREND #1:
Big banks continue to roll-out exceptional customer-facing technology.

Wells Fargo has been kicked around a lot in the press this year, but to see how big banks continue to pile up retail banking wins, take a look at Greenhouse by Wells Fargo, their app designed to attract younger customers to banking.

TREND #2:
Traditional core IT providers — Fiserv, Jack Henry & FIS — are under fire.

As traditional players move towards digital businesses, new players continue to emerge to help traditional banks become more nimble, flexible and competitive.  Here, FinXact and Nymbus provide two good examples of legitimate challengers to legacy cores.

TREND #3:
Amazon lurks as the game changer.

Community banker’s fear Amazon’s potential entry into this market; according to Promontory Interfinancial Network’s recent business outlook, it is their greatest threat.

In addition to these trends, I surfaced three immediate issues that banks must tackle

ISSUE #1:
Big banks attract new deposits at a much faster pace than banks with less than $1 billion assets.

If small banks can’t easily and efficiently attract deposits, they basically have no future. ‘Nuf said.

ISSUE #2: 
Bank boards need to know if they want to buy, sell or grow independently.

In a recent newsletter, Tom Brown of Second Curve Capital opined that “if you have less than $5 billion in assets, an efficiency ratio north of 65%, deposit costs above 60 basis points, and earn a return on equity in the single digits, this really is time to give some thought to selling.”  As I shared on LinkedIn yesterday, the 3 biggest bank M&A deals of the year took place in May: Fifth Third Bancorp’s $4.6 billion purchase of MB Financial, Cadence Bancorp’s $1.3 billion acquisition of State Bank Financial and Independent Bank Group’s $1 billion agreement to buy Guaranty Bancorp. 
 I don’t see the pace of consolidation slowing any time soon — and know that banks need to ask if they want (and can) be buyers or sellers.

ISSUE #3:
The risk of data breaches across industries continues to increase.

Be it risk management, internal control or third-party security considerations, every aspect of an institution is susceptible to a data breach — and managing these threats and identifying appropriate solutions takes a village that includes the most senior leaders of an organization.

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Just as banks need to develop their audit and risk capabilities, skills and talents, so too do officers and directors have both an opportunity and the responsibility to stay abreast of various trends and topics.  Bank Director’s event continues tomorrow with some fascinating presentations. To see what’s been shared already, take a look at Twitter, where I’m tweeting using @aldominick and #BDAudit18.

The Best of FinXTech’s Annual Summit

Quickly:

  • FinXTech’s annual Summit brought together senior executives from across the financial space to focus on new growth strategies and opportunities related to technology.

PHOENIX — I’ve spent the past few days with bank leaders, technology executives, investors and analysts interested to explore emerging trends, opportunities and challenges facing many as they look to grow and scale their businesses.  So as I prepare to head home to DC after some wonderfully exciting days at Bank Director’s annual FinXTech Summit, a few highlights from my time in the desert.

The 10 Finalists for 3 FinXTech Awards

For me, one of the signature pieces of this year’s program occurred on Thursday evening.  Under the stars, we recognized ten partnerships, each of which exemplified how banks and financial technology companies work together to better serve existing customers, attract new ones, improve efficiencies, bolster security and promote innovation.  The finalists for this year’s Best of FinXTech Awards can be seen in this video.

Winners of the 2018 Best of FinXTech Awards

We introduced these awards in 2016 to identify and recognize those partnerships that exemplify how collaborative efforts can lead to innovative solutions and growth in the banking industry.  This year, we focused on three areas of business creativity:

  • Startup Innovation, to recognize successful and innovative partnerships between banks and startup fintech companies that have been operating for less than five years.
  • Most Innovative Solution of the Year, to highlight forward-thinking ideas, we recognized partnerships that have resulted in new and innovative solutions in the financial space.
  • Best of FinXTech Partnership, a category to recognize outstanding collaboration between a financial institution and fintech company, we based this award on growth by revenue, customers and/or reputation plus the strength of integration.

The winners? Radius Bank and Alloy for Startup Innovation, CBW Bank and Yantra Financial Technology for Innovative Solution of the Year and Citizens Financial Group and Fundation for Best of FinXTech Partnership.  To learn more about each, check out this cover story on BankDirector.com

Favorite #FinXTech18 tweet

Well played with the ZZ Top reference — now we just needs to grow out that beard and drop a pair of RayBans into the shot.

Favorite picture

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Three timely (and paraphrased) comments

  1. COMMUNICATION is key…. said nearly every presenter.
  2. Make the tough call to kill bad tech or a bad relationship. You’ll lose customers if you don’t react quickly (h/t to our VP of Research, Emily McCormick).
  3. Change is the key to being valuable; start thinking and working like a startup (h/t @nabeelmahmood).

Video Recaps

During our time in the desert, we shared a number of videos on BankDirector.com.  The page with all videos can be found on FinXTech Annual Summit: Focusing on What’s Possible.  To get a sense of what these short videos look like, here is an example:

Thanks to all those who joined us at the Phoenician.  For more ideas and insight from this year’s event, I invite you to take a look at what we’ve shared on BankDirector.com (*no registration required).

3 Ways Banks Can Pick Up their Pace of Creativity

Quickly:

  • Financial institutions need a culture that allows for, and encourages, leadership teams to test & implement new approaches to traditional banking.

PHOENIX — Many financial institutions face a creativity crisis.  Legacy systems and monolithic structures stifle real change at many traditional banks — while newer technology leaders move quickly to pick up the slack.  During the first day of our annual FinXTech Summit at the Phoenician, I picked up on a few practical ideas to break down a few of the most common barriers to innovation inside financial institutions.

As our managing editor, Jake Lowary, wrote for BankDirector.com this morning, “the cultural and philosophical divides between banks and fintech companies is still very apparent, but the two groups have generally come to agree that it’s far more lucrative to establish positive relationships that benefit each, as well as their customers, than face off on opposite ends of the business landscape.”

So with this in mind, I invite you to follow the conference conversations via our social channels, where our team continues to shares ideas and information from Day 2 of this event using @BankDirector and @Fin_X_Tech on Twitter. In addition, you can search & follow #FinXTech18 to see what’s being shared with (and by) our attendees.

Banks, Make Your Move Into the Cloud

Quickly:

  • To deliver a truly end-to-end digital customer experience, banks need to figure out how and when to move into the cloud.

PHOENIX — As we kicked off this year’s FinXTech Summit, I found myself engaged in a conversation about how (and why) banks might “freeze and wrap” their data using their current core system while moving their customer engagement and analytics into the cloud.  While this was my first time hearing that particular description/approach, the underlying logic certainly applies for many of the bankers joining us at the Phoenician.  In fact, it inspired this short video shot during today’s lunch.

As a company, we’ve been writing about banks realizing that the benefits of cloud computing outweigh added security risks for a while now.  But it strikes me that interest in cloud-based platforms has been on the rise of late.  As our friends at Blend shared on BankDirector.com, “the cloud presents opportunities for enhanced efficiencies and flexibility — without any security trade-offs — so it’s no surprise that we’re seeing more organizations shift to the software as a service (SaaS) model.”

Interested to see what a move into the cloud might means for banks?  Take a look at these five cloud-based companies:

  • nCino – expediting loans and workflow on top of force.com;
  • Apiture – an API-banking joint venture between Live Oak and First Data;
  • Payrailz – an API-based payments platform “check-free killer;”
  • Defense Storm – where Big Data meets Cyber for banks; and
  • Greenlight – offering debit cards for kids.

I’ll check in later tonight to recap several presentations that explore what makes for a strong, digitally-solid bank.  Before that posts, I invite you to follow the conference conversations via our social channels.  You can follow me @AlDominick on Twitter — and our team shares ideas and information through @BankDirector plus our @Fin_X_Tech platform. Finally, search & follow #FinXTech18 to see what’s being shared with (and by) our attendees.

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FWIW, my reference to Amazon.com, Salesforce.com and Oracle in this video traces back to January 2, when Bloomberg reported the first two were “actively working to replace Oracle software running on crucial business systems with lower cost open-source database software.”  For more: Amazon, Salesforce Shifting Business Away From Oracle: Report

Kicking off FinXTech’s Summit

Quickly:

  • Technology continues to transform nearly every aspect of the financial services industry — from mobile payments to peer-to-peer lending to financial management.

PHOENIX — Tomorrow morning, we kick off our annual FinXTech Summit.  As I wrote yesterday, this annual event serves as our “in-person” bridge between banks and qualified technology companies.  Personally, I am so impressed to witness numerous financial institutions transforming how they offer banking products and services to businesses and individuals.  As such, I find myself eager to engage in tomorrow’s conversations around:

  • Partnerships, collaboration and enablement;
  • How and where banks can invest in cloud-based software; and
  • The business potential of machine learning, advanced analytics and natural language processors.

Joining us at the Phoenician are senior executives from high-performance banks like Capital One, Customers Bank, Dime Community Bancshares, First Interstate Bank, IBERIABANK, Mechanics Bank, Mutual of Omaha Bank, PacWest, Pinnacle Financial, Seacoast National Bank, Silicon Valley Bank, South State Bank, TCF National Bank, Umpqua, Union Bank & Trust, USAA and US Bancorp.  Long-time tech players like Microsoft share their opinions alongside strong upstarts like AutoBooks during this two-day program.  So before I welcome nearly 200 men and women to this year’s conference, allow me to share a few of my preliminary thoughts going into the event:

For those with us here in Arizona, you’ll find nearly every presentation explores what makes for a strong, digitally-solid bank.  So to see what’s trending, I invite you to follow the conference conversations via our social channels. For instance, I am @AlDominick on Twitter — and our team shares ideas and information through @BankDirector plus our @Fin_X_Tech platform.  Finally, search & follow #FinXTech18 to see what’s being shared with (and by) our attendees.

The Intersection of Ideas and Opportunities

Quickly:

  • In a few days, the lights come up on the annual FinXTech Summit, a program that explores ways for banks to delight customers, generate top-line growth and enhance bottom-line profits through partnerships and investments in technology companies.

PHOENIX — When I last stepped foot in Arizona, it was to host Bank Director’s annual Acquire or Be Acquired Conference.  The January event attracts a hugely influential audience focused on mergers, acquisitions and growth strategies & tactics.  While there, we noticed quite a few presentations explored how and where financial institutions might invest in, or better integrate, digital opportunities.  So, as a complement to Acquire or Be Acquired, I’m back in the desert to dive deeper into myriad ideas for banks to improve profitability and efficiency with the help of technology firms.

As we prepare to host our FinXTech Annual Summit at the Phoenician, take note: smart banks are investing and/or partnering with technology companies because they realize it’s cheaper and faster than building something themselves.  Further, the largest banks in the U.S. are rapidly evolving with advances in artificial intelligence across chatbots, robo-advisors, claims, underwriting, IoT and soon blockchain — all of which add another layer of potential to further shake-up traditional business models.  In fact, there was a palatable sense among bankers at AOBA about the evolution in financial technology.

Nonetheless, many banks, especially those between $500M and $30Bn in assets, are on the outside looking in — and this is where FinXTech’s Summit story begins.

From exploring data to leveraging cognitive computing to gaining efficiencies in backroom processes, this year’s event surfaces a number of potent ideas.  For instance, we shine a light on how bank leadership can truly unleash the potential of a technology partner.  Further, we pull current quotes and issues like these to discuss and debate:

One thing I love about customers is that they are divinely discontent. Their expectations are never static — they go up. It’s human nature. We didn’t ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary’
Jeff Bezos, Founder and Chief Executive Officer

Likewise, we share our takes on key acquisitions — like JP Morgan’s acquisition of WePay — while identifying how institutions leverage newer technologies to improve efficiency ratios and in some cases, boost franchise valuations.

In a sense, FinXTech’s Summit serves as our “in-person” bridge between banks and qualified technology companies.  For those joining us, we’ll touch on various products and services for security, data & analytics, infrastructure, lending, mobile banking, payments and regtech while convening an exceptionally senior audience of 200+.  Throughout the event, I’ll share my thoughts via Twitter, where I’m @AlDominick and using #FinXTech18.  Finally, I’ll author a daily update on this site with my observations from the conference.

3 Key RegTech Themes

Quickly:

  • Machine learning, advanced analytics and natural language processors dominated conversations at yesterday’s RegTech program at NASDAQ’s MarketSite.

NEW YORK — Where will technology take us next?  As many banks embrace digital tools and strategies, they inevitably grapple with regulatory uncertainty.  This naturally creates friction in terms of staffing levels, operational expenses and investment horizons.  With so many regional and national banks continuing to grow in size and complexity, the responsibility to provide appropriate oversight and management escalates in kind.

Likewise, as more and more community banks rely on technology partners to transform how they offer banking products and services, management teams and boards of directors grapple to assess how such relationships impact compliance programs and regulatory expectations.  Can technology truly deliver on its promise of efficiency, risk mitigation and greater insight into customer behavior?

To address questions and observations like these, my team hosted the Reality of RegTech at NASDAQ’s MarketSite on April 18.  Entering the MarketSite, we aspired to surface ideas for banks to better detect compliance and regulatory risks, assess risk exposure and anticipate future threats by engaging with technology partners.

Over the years, our annual one trek to NASDAQ’s New York home afforded us opportunities to:

  • Learn how BNY Mellon encourages innovation on a global scale;
  • Identify where early-stage technology firms realistically collaborate with financial services providers; and
  • Explore lending strategies and solutions for community banks.

This year, we focused on the intersection of technology with regulation, noting that banks can and should expect an overall increase in regulatory constraints on topics including supervision, systemic risk (such as stress tests), data protection and customer protection.

For Forward-Thinking Banks

At Bank Director, we see the emergence of regulatory-focused technology companies helping leadership teams to bridge the need for efficiency and security with growth aspirations. However, understanding how and when to leverage such technologies confounds many executives.  As our Emily McCormick wrote in advance of the event, forward-thinking banks are looking within their own organizations to figure out how the deployment of regtech fits into the institution’s overall strategic goals while matching up with culture, policies, processes and talent.

Key Takeaways

  1. RegTech is, by its very nature, constantly evolving.  Current solutions focus on one of two things: reducing the cost of compliance via automation or leveraging technology to deliver more effective compliance.
  2. The flip side to the promise of these solutions is a skepticism and concern by both regulators and banks that RegTechs really are in this for the long-haul, are reliable and “safe” to work with.
  3. A first step for banks not already using RegTech?  Develop an implementation road map for one specific need (e.g. BSA / AML) which aligns to the overall strategic vision of the organization (in this case, a desire to grow through acquisition).

Interesting Reads on RegTech

Multiple presentations touched on how and where banks can maximize the potential benefits of their RegTech endeavors by addressing key risks; for instance: uncertain development paths, provider reliability, increased regulatory scrutiny, limited judgment and privacy concerns.  For those looking to go deeper on these issues:

  1. PwC authored a Regulatory Brief that discusses (a) how banks are using RegTechs, (b) the current RegTech landscape, and (c) what banks should do to prepare for RegTech.
  2. Continuity offers an e-book along with a step-by-step system for predictable, repeatable compliance results.
  3. Ascent blogs about the impact of artificial intelligence on regulatory compliance in its Top 5 Ways AI in Compliance Will Affect You in 2017.

Multiple members of the team shared insight and inspiration with #RegTech18 on Twitter (usually tying into our @Fin_X_Tech and @BankDirector handles).  Finally, be sure to check out BankDirector.com (no subscription required) as our editorial team offers up a number of perspectives on RegTech and this year’s event.

Shh, Disruption in Banking Continues

Quickly:

  • I spent yesterday afternoon at Capital One Growth Ventures’ inaugural VC & Startup Summit, an event that inspired today’s post.

WASHINGTON, DC — I’m hard pressed to find anyone willing to contest the notion that technology continues to disrupt traditional banking models. Now, I realize the “D” word jumped the shark years ago. Personally, I try my best to keep my distance from employing the adjective to describe what’s taking place in the financial world vis-a-vis technology. However, banks of all sizes continue to reassess, and re-imagine, how financial services might be structured, offered and embraced given the proliferation of new digital offerings and strategies.

As I reflect on the first quarter of 2018, it strikes me that we’re living in an industry marked by both consolidation and displacement. Yes, many bank executives have fully embraced the idea that technology — and technological innovation — is a key strategic imperative. However, few banks have a clear strategy to acquire the necessary talent to fully leverage new technologies. On the flip side, I get the sense that a number of once-prominent FinTech companies are struggling to scale and gain customer adoption at a level needed to stay in business. Nonetheless, the divide between both parties remains problematic given the potential to help both sides grow and remain relevant.

While banks explore new ways to generate top-line growth and bottom-line profits through partnerships, collaboration and technology investments, I have some concerns. For instance, the digital expectations of consumers and small & mid-sized businesses may become cost-prohibitive for banks under $1Bn in assets. So allow me to share what’s on my mind given recent conversations, presentations and observations about the intersection of fin and tech.

FIVE ON MY MIND

  1. With all the data issues coming to light courtesy of Facebook, how can banks extract the most revenue from the data available to them (*and how much will it cost)?
  2. As banks become more dependent on technology partners, what level of control —over both costs and data — should a bank be willing to trust to third parties?
  3. What does the arrival of new technologies, such as artificial intelligence, mean for a financial institutions’ current workforces?
  4. Amazon’s announced checking account partnership with JPMorgan Chase begs the question: how dependent should banks become on big technology companies?
  5. How many larger banks will acquire smaller institutions that cannot keep up with the cost and pace of technology in Q2?

Significant technological changes continue to impact the financial community. In the weeks to come, I’ll relay what I learn about these five issues in subsequent posts. If you’re interested, I tweet @AlDominick and encourage you to check out @BankDirector and @FinXTech for more.

Trending Topics from CBALive!

Quickly:
  • A few quick-hit thoughts from this week’s CBALive! conference, where I spent the past three days engaged in conversations about consumer behavior and emerging digital initiatives.

ORLANDO, FL — When the Former Director of the National Security Agency and the Central Intelligence Agency says that the private sector needs to step in and take more responsibility for cyber safety and protection, it is a lede I dare not bury.

To paraphrase General Michael Hayden, now a Principal at The Chertoff Group, nation-states like North Korea and Iran pose major challenges to the fabric of our financial industry.  The Russians, though, remain in a class of their own.  As he explained, their focus on information dominance, not just cyber dominance, reflects a coordinated and concentrated fight to control the American public’s perceptions. As the recent presidential election proved, their ability to create “information bubbles” gives them a weapon with which to hurt companies’ reputations in addition to using other cyber hacking techniques to corrupt an institution’s data or to steal money.

While many bank boards have a tight pulse on their organization’s cybersecurity preparedness, Gen. Hayden made clear that the U.S. government views cyber as a new domain of warfare (alongside the traditional domains of air, sea, land and space).  Whether they want to or not, banks of all sizes form the cavalry that needs to ride to the country’s rescue as the cyber threats continue to proliferate.

Gen. Hayden discussed our virtual vulnerabilities and the real risks for our country during his afternoon’s keynote presentation at the Consumer Bankers Association CBALive! conference at the Hilton Orlando Bonnet Creek.  In addition to these remarks, I made note of three key issues that tie into their conference theme of “beyond the bank:”

The race to grow deposits continues.

The digital presence and marketing efforts of the biggest banks in the U.S. continue to enable them to acquire an outsized share of consumer and commercial relationships.  Given that deposits proved the big theme at our Acquire or Be Acquired Conference, I made note of Novantas‘ perspectives as they apply to community banks trying to grow and compete.  Given their involvement with financial institutions — the firm provides information, analyses and automated solutions designed to improve revenue generation — they believe acquisitive banks must apply the same discipline to evaluating a potential acquisition bank’s deposit portfolio as they historically have given to the lending book.  As they shared in a white paper, “the importance of such rigor has increased with higher rates: the low-rate banks of yesterday can wind up with unattractive deposit positions tomorrow.”

Artificial intelligence remains the ultimate buzzword.

Alistair Rennie, General Manager, Solutions at IBM Watson Financial Services opined on the promise of machine learning and artificial intelligence, highlighting the intersection of digital, offline and social identity data as a means to improve enterprise-wide visibility into regulatory and internal compliance controls.  As he shared, cognitive technologies promise to fundamentally change how banks identify customer behaviors and patterns. Personally, I found his most interesting point for bank leadership came from his first audience-specific question (*see the image that leads off today’s post).

Can you really “own” the customer experience?

Forgive me if you caught me rolling my eyes during presentations that began with “banks need to own the customer experience,” especially when delivered as if a novel approach to business.  Marketing 101 starts with a basic premise: know your customer — and give them what they want.  So when looking for the characteristics of disruption that might strengthen a relationship, I liked this particular tweet:

While we covered a lot of ground, these three thoughts accompany me on my flight home to D.C.  My thanks to Richard Hunt and his team at the CBA for inviting me and our CMO, Michelle King, to join them in Orlando.  The CBA represents America’s retail banks and does a great job bringing together some of the biggest institutions in the U.S. to address issues such as these.  If you’re not following Richard on Twitter, his handle is @cajunbanker and for the CBA, check out @consumerbankers.

Lessons in Leadership c/o David Rubenstein

Quickly:

  • I spent this morning listening to David Rubenstein share his thoughts on leadership.  Best known as the co-founder and co-chief executive officer of The Carlyle Group, a global private equity investment company based in Washington, D.C., today’s post paraphrases a few key takeaways.

WASHINGTON, D.C. — Being in a cult has its perks.  The cult?  Leadership Greater Washington.  Today’s perk?  A morning spent with one of the more philanthropic business leaders in the United States, David Rubenstein.  With the gentle prodding of Richard Bynum, President of Greater Washington & Virginia at PNC, David shared his self-deprecating wit and humor with 100+ of my LGW contemporaries.  Personally, three “don’ts” accentuated his morning remarks.

Don’t hire geniuses

David co-founded The Carlyle Group, one of the world’s largest private equity firms, in 1987.  While the firm now manages $174 billion from 31 offices around the world, he spent his early days on the road “begging for money.”  As the company grew, he looked for humility, a strong work ethic and reasonable intelligence in new hires. When pressed on this last point, he laughed and said managing a genius proved impossible.  Far better to attract talented workers with an appetite to work, learn and make money for “the right reasons” than hire someone who required extraordinary management.

Don’t die the richest man in the cemetery

When Bill Gates conceived the Giving Pledge as a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropic pursuits, he found an early supporter in David.  Explaining his decision to make this pledge in 2010, he shared that some of the happiest people he knows have the least, while some of the most lonely and unhappy count billions in the bank.  He realized he has no interest in dying the richest man in the cemetery — subtly challenging all in attendance to lead by example and do something more then just making money.

Don’t forget your Mom

How do you know you’re a success?  When your Mom calls and thinks you’re doing something right.  Call it the “Mother’s Test;” for David, his mom never called about the millions he made, but about the millions he gave away.  I’m sure David won’t mind me borrowing this mantra for my own future use.

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*Thanks to Doug Duncan and his team at Leadership Greater Washington for putting together this morning’s inspirational program.  In addition, thank you to Richard and his colleagues at PNC for sharing their 12th floor with the cult!