Believe in Banking Podcast: Episode #10

What’s Ahead for Banking

COVID is the great catalyst, ushering in change that may have been on the horizon for banking, but it’s now speeding things up. One particular shift we’re seeing is the industrywide recognition and financial institutions embracing their role in society to do good and give back. Banking for good is better for all; finding real ways to help the customer is better for the banks and for the customer. Even if it means some short-term losses, it turns into long-term gains for banks and credit unions.

Text Transcript

Intro: This is Believe In Banking, a podcast series for decision makers, influencers, and leaders, featuring experts taking on the financial industry’s most pressing issues with insight and empathy. The podcast features information and conversations designed to enlighten and empower. Here are your Believe In Banking hosts, Sean Keathley and Gina Bleedorn.

Sean Keathley: Welcome. This is our Believe In Banking podcast. I am Sean Keathley, president and CEO at Adrenaline.

Gina Bleedorn: And I’m Gina Bleedorn, chief experience officer at Adrenaline.

Sean Keathley: So Gina, as we start this discussion, we want to think back about our last episode. And we discussed some of the more hopeful signs. We talked about really the role that banks are playing, banks being heroes, helping PPP lending. The idea that it’s actually both mutually beneficial for the banks, although not at their typical interest rates, but they’re really, more importantly, paying it forward and helping those in need.

Sean Keathley: As we were thinking about continuing that discussion, I’m excited to announce we’ve got a couple of our good clients that are going to come on and help walk through their personal experience. And I just think that’s going to be so valuable. We enjoyed Ryan Kilpatrick from Origin talking about some of the early experiences as their community bank was managing through COVID and all of our realities of 2020. And now we’re past six months, we’re going to bring in a couple of different Texas bankers, and we’re going to look at it from a couple different angles.

Sean Keathley: We’re going to start with Mr. Brad Tidwell, CEO at VeraBank. VeraBank is a true community bank, although they’ve acquired five banks and now are over 2 billion in assets, but absolutely behave like a true community bank. We’re excited to bring Brad in. Brad has worked with Chase, worked with Jamie Dimon, and now he’s back in his original hometown and that’ll be an exciting discussion.

Sean Keathley: We’re also going to bring on Mr. Jimmy Stead. And Jimmy is the chief consumer banking officer at Frost Bank. I also think of Frost as a community bank. At 32 billion, we better call them a super community bank. But when you hear Jimmy and the story of Frost, you understand why I say they are a community bank.

Sean Keathley: And so it’ll be a wonderful way to think about their experiences, the PPP program, and I think we want to, Gina, start thinking about the future as well, upcoming challenges, but maybe more importantly, how strategies are changing. And we’re going to hear from both of these gentlemen, how there are some accelerators starting to happen, maybe because of COVID. And some of those things they’re implementing are actually going to be good.

Gina Bleedorn: One of the things I’m most excited about that is certainly not at the top of the headlines, but is making its way into many headlines, the idea that banking for good is better for all. So tying into purpose, real ways to help the customer is better for the banks and for the customers. And that is a sort of new notion, especially for larger banks and regulation, historically, hasn’t supported that being the case. But now, as COVID is the great catalyst as it continues to be, ushering in change that either we thought was going to happen or we wanted to happen, this is the second category. This is something we have wanted to happen, is financial institutions to realize the opportunity of their role in society to do good and give back, even if that means some short-term losses, it will mean long-term gains.

Sean Keathley: There is opportunity in these uncertain and challenging times. And a lot of what we’re saying is not brain surgery. It is not the silver bullet, magic, going to fix it all, but it is just sticking to the strategy. And I think what helps these organizations, it is down to the hand to hand, relationship banking, helping people. And I think that all bets are off. The new situation we’re in, there is opportunity for people that have engaged employees, in neighborhoods, trying to help people be successful. And technology, for a large part, can’t do that.

Gina Bleedorn: Some of the big banks, many of them did this, revealed some ugly, true colors in the PPP situation where they tried to make the biggest loans first, because that was most profitable for them. And didn’t even follow the spirit of what PPP was for. B of A did 1000 PPP loans in the same time that Frost did 10,000, but it’s because Frost wasn’t worried about making money on the biggest loans. They were worried about completing each and every loan. They completed 99 1/2% of all their applicants.

Sean Keathley: You’re right. Frost at 32 billion is still behaving like a community bank. And so I think it proves this notion is scalable. But I think that those organizations that have more of a one-to-one employee to consumer relationship, or small business relationship, they have a chance and the chance isn’t over, because we mentioned, we’re not out of the woods, the pain is not beyond us. You can’t deny that there is a oncoming storm still brewing, even if we are to continue to make progress, and even if we make more progress, in terms of beating this pandemic, the credit crunch is coming. There have just been too many people impacted. I heard one economist say this was like a strong economy being hit by a meteor. This was not subtle. And you had so many consumers impacted and we still don’t have people back to work.

Sean Keathley: So I think this idea of a credit crunch is going to be something bankers have to balance. There’s a awesome responsibility for a bank to have to take care of their employees, their shareholders, the health of their organization. At the same time, by nature of what they’re doing, they’re trying to help businesses, small businesses and consumers. And I think that’s going to be a very important thing to balance as we get through this crisis together. And I think the more strategic organizations, those that are thinking downstream, have bigger picture goals in mind, are going to do better.

Gina Bleedorn: Yeah, for sure. In the spirit of the alphabet economics, whether it’s a delightful V, or a not as delightful U, or a swoosh, or a W, or a reversed square root sign, all of the different scenarios being played out, regardless of what the economic outcome is, it doesn’t fundamentally change what community institutions need to be thinking about and be focused on. And it also means that regardless of the intended outcome, your head absolutely must be up when it comes to thinking about medium and longer term decisions. Certainly you’re going to have to continue to be in the fray to some degree with what’s happening now with ongoing changes in regulation, but you absolutely shouldn’t change the fundamentals of planning for the future.

Sean Keathley: Great point, Gina. And thinking about regulation, I think there are some things that are going to be happening that are potentially positive in terms of regulation changes. American Banker earlier in the week was talking about the last time the justice department’s antitrust unit even talked about how to review bank mergers was 1995. I don’t know what’s more alarming is that that’s 25 years ago, but it is a quarter of a century ago and the landscape has changed. There were 10,000 banks. Now there’s 4,400, close to 10,000 organizations with credit unions, but certainly the landscape has been changing. So we’re definitely overdue to think about how those rules can be adjusted for things that are changing the landscape and things in a non COVID era are still relevant like technology and the changing profile of the consumer.

Sean Keathley: I think one of the things will absolutely probably happen is it’s going to be easier for small organizations to merge. And I think that’s going to be a real key to survival for a lot of organizations, is scale. And I think it’s not only just survival and thriving, but I think to me, Gina, it may make them better equipped to do the mission you’ve just talked about. Maybe have the resources, have the staff, have the key talent, be in the right markets to have a strategy about really doing good for people.

Gina Bleedorn: Being above the fray means being focused on your purpose. And your purpose means being focused on the “long-term”. What are you trying to do for people and for communities and as an organization, and for your employees and your shareholders? Whatever your constituencies might be, if you’re focused on being true to that, then you’re focused on the right thing.

Sean Keathley: And Gina, you talk about catalyst and accelerators and I saw something very exciting that is starting to become bigger news and I think in a more normal environment would have been huge news. And to me understanding the importance of this for our society and the financial industry is this landmark moment about the first female CEO of a major US bank. And the more you learn about this incredible woman, the more exciting it is.

Gina Bleedorn: Yeah. So how about Citi and their next CEO Jane Fraser? And this woman is my kind of woman, as I read about her, a mother, a absolute overachieving, brilliant excelling everywhere throughout the organization, working her way to the top, did a stint at McKinsey for a while on the way and apparently is just hands down the successor to Michael Corbat. She has this beautiful, humbling, empathetic approach to straightforwardness and transparency that every business person in the world should strive for, and it’s happening at the top of Wall Street.

Sean Keathley: It is exciting news. And as I think back and pull out maybe at a higher view, we know for years there’s been discussions among boardrooms at banks about succession planning. And it is largely an indicator whether organizations are going to sell or merge or acquire and grow, and you have to have leaders if you’re going to continue forward. I think the environment is set up as the uncertainty dissipates over time. I’m not going to say exactly how long or when it starts, but I can guarantee you when things normalize that this merger activity will increase. It is going to be accelerated because of what we’ve been through. And I think the Citi example is hopefully empowering every organization to be open, clear-eyed around how best to have leadership in their banks. And I hope and think many, many more will follow in Citi’s footsteps.

Gina Bleedorn: I hope so, I really do. Because most optimal success in business is achieved when there is a balance of sexes and a balance of diversity and a balance of all different perspectives that ultimately make the organization stronger and banking has been known to be behind some other industries in the spectrum in diversity. But now I think things really may be changing. A lot of catalyst, again via COVID, spurring succession planning in and with moves like Citi and others, the tide is turning into more inclusion that ultimately, and hopefully, is rooted in the purpose of the organization, in the brands and the strategy for where you want the organization to go, and the idea that the changing of tides of leadership could help you get there.

Gina Bleedorn: That is a real silver lining, I think, on some of the storm clouds that we’re all seeing a lot of these days is that as change occurs, it can be changed for the better, whatever that means. And in some cases that may mean new leadership by people who traditionally haven’t had the ability or haven’t been visible as leaders. So as we look forward, we are excited to see more change for the better being spawned by institutions all over the country, big and small.

Sean Keathley: As we’ve talked today about some of the things that are inspirational, we’re certainly recognizing that we’re amid challenging times, but we have to have our head above and looking forward. Talking about purpose-driven, catalyst for change, acceleration of ideas that were maybe overdue, some of the maybe the shining examples of good things happening out of COVID, these next two guests are just going to be perfectly timed to continue that discussion. I think once the audience listens to Brad at VeraBank and their amazing story, and Jimmy at Frost, you’re going to see although they’re very different sized organizations, both in their own unique way, bring community to heart, really the idea of serving their client and purpose-driven, employee first type organizations. I just couldn’t be more honored to have these two guests coming on.

Gina Bleedorn: I can’t wait to talk to these gentlemen. When we have people on, they shine so much light into the real world happenings of the things that we’re musing on theoretically from a secondhand position. Truly looking forward to it. If you have questions or thoughts for us or any of our bankers that we have on the show, please tweet us at #believeinbanking.

Outro: You’ve been listening to Believe In Banking, a podcast series created to empower decision makers, influencers, and industry leaders in financial services. Be sure to also join us on our flagship site,