In this special episode of the Believe in Banking podcast, Gina and Juliet look back through the library of episodes to shine a spotlight on the enlightening information and insights from Sean Keathley, Founder and Chairman Emeritus of Adrenaline. Going back at the launch of the podcast in 2020, during the height of Covid, all the way through early 2024, they pull out some of the best thinking from a truly rich repository that spans the most change the banking industry has experienced since its inception. In his years hosting the podcast, Sean brought more than a wealth of knowledge about the banking industry, he shared his passion for people – those serving and being served by community banks and credit unions across the country. His unique ability to take even the most complex financial topics and present them in a way that everyone can understand is one hallmarks of the podcast. Finally, they share how Sean is the ultimate believer in banking and it’s a legacy that Gina and Juliet are proud to continue.
Text Transcription
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.
Gina Bleedorn (00:18): Welcome to our Believe in Banking podcast. I am Gina Bleedorn, President and CEO of Adrenaline.
Juliet D’Ambrosio (00:26): And I’m Juliet D’Ambrosio, Chief Experience Officer at Adrenaline.
Gina Bleedorn (00:31): Juliet. I love… Well, first I love that title, Chief Experience Officer. And second, it is wonderful to introduce this month’s podcast, which is really a really special one that’s close to our hearts, because it is putting our Founder and now Chairman Emeritus Sean Keathley back in the spotlight.
Juliet D’Ambrosio (00:56): Gina, the spotlight is where Sean has always belonged, and that is more true now than ever as we’ve been able to go back through the Believe in Banking library, which is pretty deep at this point. We went back and launched this podcast in 2020, as you’ll remember, during the height of Covid and have been recording regularly all the way up until today. So that gave us an enormous bank of Sean tidbits. And what struck me going through is what I call his practical intelligence. It’s a way that I think of it of Keathley-ing the world around him. So he is able to understand, see and surface really brilliant insights about banking, about the community financial institutions that we serve and why they’re meaningful and contextualize it in the world around us. And he’s able to do so in a way that makes it utterly simple to understand. Complexity into simplicity, which is really the heart of Sean’s genius.
Gina Bleedorn (02:16): So many times he would say, “Well, I’m not a futurist.” But actually we now have proof. He is in fact a futurist. He’s probably listening right now and shaking his head at what we’re saying, but so many things he has said have in fact come to fruition. And it’s really incredible how he could see what would change and what would stay the same, especially as you mentioned coming out of the pandemic. He all but predicted the resurgence of the branch today because people would crave human connection as we know they now do.
Juliet D’Ambrosio (02:55): That human connection is, I think also part of what makes Sean so brilliant and such a great futurist is his way with people, his ability to understand what makes human beings tick. We really should have placed bets on some of his predictions. We’d all be gajillionaires by now.
Gina Bleedorn (03:18): I have known him for so long, we founded the company along with some of our other colleagues together, and I can’t resist the urge to tease him even publicly on a podcast.
Juliet D’Ambrosio (03:35): And what’s so great about Sean is that he takes the teasing, utterly rolls with it, a great sense of humor… I’ve known Sean for less time than you have, but I remember one of our first trips together rocking out to Def Leopard and just thinking that was the most Gen X thing ever. And just recently, I think on our podcast, you were making fun of him for his Gen X tendencies to play Frogger.
Gina Bleedorn (04:08): Yes. And I don’t know if he still plays Frogger? Maybe he does. But I think what people will hear in this special episode is a lot of topical information about banking, spot-on insights about the industry. But more than that, they will hear Sean’s deep belief in banking and the love of people, that you described Juliet, that bring so much care and commitment to their role as bankers.
Juliet D’Ambrosio (04:45): Yeah, I have always been struck by the sincerity and the passion that he has for what banking can do for communities. And it’s that passion that has set the stage for all of Adrenaline’s continued success. You and Sean built this house, and it’s because banking really does touch all of us. It makes our communities stronger. It helps us as individuals, as families, as businesses. It enriches people’s lives in so many ways that are invisible to the naked eye. But when you dive a little deeper, you see its effect everywhere. And Sean believes that. It’s his faith in banking, but really his faith in the people of banking and the people that banking will ultimately support, that exemplifies what Believe in Banking is all about. We’re so proud to carry on that legacy.
Gina Bleedorn (05:47): And Sean, as the ultimate believer and also inspirer of others to believe, continues his fight with ALS we are all behind him. We believe in Sean.
Hope you enjoy the episode.
Gina Bleedorn (06:05): Gen X who are about 43 to 58-ish are a smaller generation, but one that is coming of age into vast needs for financial help, financial products, services and opportunities, and are often overlooked. Sean, as a Gen Xer yourself – because you’re one as a Gen Xer, right? – talk about the sandwich generation and what that means.
Sean Keathley (06:39): Yeah, Gina, I think that we, Gen Xers are overlooked and do so at your own peril. For one, 35% of us are open to changing banks right now. That’s the highest in four years. Two, generally speaking, when you’re thinking of this age group, you are at your highest earning potential. You’ve got to hit your sweet spot in your career, been out of school, been able to work through success and get promotions, et cetera. But from a needs basis you are, as you say, getting sandwiched.
You’ve got teenagers that are driving cars and have expensive insurance and we’re going to college soon after, and you’ve got parents in their eighties or early nineties and need help. And so you’ve got really the perfect storm – busy lifestyles, sandwich of needs, good income, but not a group to overlook. And because of all that, they’re looking to add products from their financial institutions or better financial institutions. And up to 35% of them are looking to add two or more additional products.
So they have an appetite for help. And that is what I heard from one CEO. He feels like he has a branch network of order takers and he needs a branch network of advisors. And I think that is a perfect summary of the transition that is happening.
Juliet D’Ambrosio (08:11): I also go back to the conversation we had with VeraBank around TikTok and what struck me about that was that they were so interested. The idea is like we know we need to fish where the fish are. We need to be part of the conversations where Gen Z are having the conversations, which are channels like TikTok. At the same time, it’s kind of scary to take that leap. How do we do it? What’s the right relevant way for a community bank to show up on a channel like TikTok, let alone newer areas like Twitch where a lot of people on the bleeding edge, they don’t text anymore. Sean, I’m sure your kids are on Twitch or Discord, which are the platforms they use of choice. So, I was so interested because I thought it was exemplary of probably how a lot of community bankers feel. They know they need to do it but are unsure how.
Sean Keathley (09:16): Well, there’s two points. One, gaming today is a social event. You’re no longer playing Frogger by yourself like your parents did. These are multiplayer games, headsets, talking live to friends. And so the messaging system there has become incredibly popular. The second thing that’s happening is they’re staying ahead of their parents who are device by device and app by app figuring out how to monitor activity. And these gaming platforms were a great way to message without the parents being able to monitor, as well.
Gina Bleedorn (09:56): Did you spend a lot of time alone playing Frogger, Sean?
Sean Keathley (10:01): No, I wouldn’t say a lot. Minimal. Frogger and Galaga.
Gina Bleedorn (10:09): Yeah, I don’t know that one.
Sean Keathley (10:11): Pacman.
Juliet D’Ambrosio (10:11): The fact that you just said Frogger makes my Gen X heart so happy, Sean.
Gina Bleedorn (10:17): So Juliet, that last point, you just made is important when VeraBank that said, how am I going to target Gen Z?
Sean Keathley (10:24): Well, as we get into some examples things were seeing the, I think it is important to note that with Gen Z for a third of them want to open an account in a branch versus Gen X, where almost 73% prefer to use the branch for transactions. So this is a massive shift in behavior and that is absolutely impacting strategy. And therefore branch design.
Gina Bleedorn (10:54): Think of like a Carvana. They’re building towers of real cars that are theoretically virtual in markets to just signify their presence, even though their model is that you’ll never ever go there and they’ll give you a loan virtually and you’ll get your car virtually. And they’re doing that to do exactly what you said, Sean, to just be present in as big away as possible.
Sean Keathley (11:20): We have highlighted some of the larger mergers and acquisitions that really make the headlines. They impact more branch locations, more communities. We are involved in the Truist project. The brand reveal is happening now. So you’re seeing Truist brand is coming to life and really one of the biggest deals that’s ever been done in the next closest was Bank of America/Wells Fargo.
But that’s not really the full story because in terms of numbers, there are much higher number of acquisitions happening at institutions that don’t have that kind of scale. We’re thinking about the regional banks, the community banks, and even the credit unions. And as we know, there’s a far bigger number of those institutions. So the likelihood of those being acquisition driven make it higher just in that sheer fact. But you could also argue that maybe it’s even more important – the need to scale. The smaller your organization, the more difficult it is to survive and thrive.
Many still have the spirit of community bank and absolutely want to be community focused, neighborhood focused. But that can be done in more than one community and often that provides many benefits. I’ve talked to several bank CEOs in the last 60 days. Many of them have been active in either acquiring small networks or building new locations and growth markets. The theme I’m hearing, they’re looking for a combination of the right market with the right bankers and the right physical presence that is the winning combination.
And you look at Jamie Dimon and everything Chase has been doing, they just had their investor day where they’re being asked about their love affair with branches. They’ve invested heavily through the pandemic and continue to say it has done exactly what we thought it would do. It is the major source of origination of new accounts. You see that 50% of mortgages in a bank that has some of the best digital capabilities in the industry is coming from the branch.
Their credit card business is very important to them. Three out of four of the new cards are opened in a branch environment. They have talked Gina about the branch being the front door to their business, go down to Hue Townsend at Guaranty Bank in Mississippi. Couldn’t be more different in terms of scale. I’d argue the branching strategy is similar on a state level. Hue is trying to be the community bank of his state and he is doing it by hiring amazing bankers that do handshake banking in the towns they serve.
And he is moving into new markets through acquiring banks, through new construction. And he is reviving branches that are tired in key legacy markets. And so you could argue that he has taken a page out of the Jamie Dimon playbook and doing exactly what you’ve talked about all in this very difficult environment where the rates have been a challenge and there’s regulation and just all the headwinds. These folks are succeeding.
And Gina, you’ve been mentioning these really surprising statistics about the number of people that are thinking of switching, which creates just tremendous opportunity. And really what makes the banking world special is they really have the ability to back this up and thinking about financial planning coming from a trusted advisor. And I think that’s a position these community organizations can really fulfill. Who better than to allow you tools to do budgeting and planning than those experts that can help you navigate all of those life moments we’ve been talking about. And I think that’s an exciting development.
Gina Bleedorn (15:02): When post pandemic economy predictions began, very few of them depicted as sharp of a comeback as our economy seems to be having right now. And all of that has great opportunities for retail banking.
Sean Keathley (15:20): Gina, you’re right. I mean first of all, the decline was one of the worst in our history, but the nature of it also is creating one of the biggest comebacks ever as well. And I think that’s what’s interesting. We’re not out of the woods yet, but there are certainly record levels of new opportunities, small businesses popping up. It’s inflating opportunity across all types of financial institutions.
And I think it is just the resurgence of the American people and their desire to return to some sense of normalcy. We talked to the meteor that hit us, and Covid was unlike some of the challenges that we’ve seen in history that were financially based. This was a health pandemic and the desire for people to move again is certainly showing itself in these numbers we’re seeing with businesses and back to work, et cetera, which is an exciting time for financial institutions.
Gina Bleedorn (16:20): So, in a way, doubling down on your people and reframing who those people really need to be, that is a key to future success.
Sean Keathley (16:32): I totally agree, Gina. And I think the times we’re living in are putting more emphasis on it. There’s a lot of studies that are out there around just people’s concern about their finances and people are worried and we’re seeing it across age groups. So, now even the youngest workforce is worried about do they have too much debt, student loan or otherwise, do they understand finances? Can they start understanding the power of saving today and the power of saving over time?
And I think that notion of financial literacy and having organizations really doing good in the community by teaching people is one of the examples that can be an outcome of that. People focus on helping versus that just customer service with a smile. So there is a balance, and I think the oldest new is brilliant. We’ve been saying this for a long time, really ever since the iPhone came out and made digital transactions an option.
But I think what we’ve been through in the last 16 months is probably putting more pressure as you look for ways to grow and be more efficient and more legacy markets. I think there is going to be a balance of technology and people that’ll be the solution. I think if we back up and think about global strategy, we really urge our clients and everyone in the industry to think about the value of experience and efficiency and those things that help your organization be successful but not at the expense of the consumer.
The banking as a service and the trust, financial education, all the things we’ve been talking about that are ways to build trust and value that benefit the bank needs to be the lens of the financial industry. But if it’s going to be the expense of the average consumer, I think they’re going to raise their hand and say, this is something we should think about.
Juliet D’Ambrosio (18:21): There is some enduring support that’s driven by trust, but there is also growing interest and momentum around where consumers place their trust and their confidence. And we’re seeing that happen more and more in their local community financial institutions.
Sean Keathley (18:40): Well, Juliet, it makes me feel in hindsight, we had it right during the heart of Covid to start a Believe in Banking podcast. It just continues to shine through as the strategy that can survive just about anything –hard times, politically divided times, challenges on the geopolitical stage, you name it – banks can play a role. And I go back to say that Silvergate and the Silicon Valley, Signature in New York [bank failures], these types of challenges… It is not systemic. This is not 2008 where there was a systemic crisis.
And so I think that the banks are bringing strong balance sheets into tough times and that is going to get us through tough times. And there is a moment here for every single bank in every community to realize they are one of the more trusted sources. And we know money is personal and it’s emotional.
And so I think there’s a moment for banking right now. They are looking to reestablish themselves in a more relevant way. Some of them have names that are SEG-based, geographically limiting, but some of them are just tired and won’t play in the right markets. And so we are seeing them come up with exciting new identities, new promises, embracing the new generations, new markets.
And one thing we heard for sure, and Gina, you could talk about this, Everwise exciting their staff. That is something that’s often misunderstood. The power of your entire enterprise, being excited about your brand and your brand promise in paying that off. And when we had the Everwise team, formerly Teachers Credit Union on the podcast, they spoke to that with a lot of enthusiasm.
Gina Bleedorn (20:28): Talk a little bit about reputation. Understanding it’s one of the most important things you can think about when we say brand. We really mean that. What does reputation management mean today?
Sean Keathley (20:42): Banking is a people business. We’ve said that before, that it is a strength in a relationship. And that’s why there is a physical part of the smoothie that Ben talks about. It is human to human, and it is embedded in neighborhoods. And neighborhoods are not all created equally. This notion of reputation, one factor is tracking and retaining key people. And we see a lot of banks where they may have their eye on a market that they know is an opportunity, but maybe their first step is attracting the team. That’s going to be the boots on the ground.
And if you are more sophisticated, your brand is attractive and not detracting from your business objectives, and you’ve got clear intentions to do good and to expand, you have an advantage in the competition for talent. And we are seeing that play out. If you’ve been risk averse or afraid to make decisions, you have a name that’s not unique, limiting in your growth, you are going to have a harder time in expansion efforts in all ways.
And so I do think your point about brand as a business and then thinking about it more as a reputation. What do people say about you when you’re not in the room? I think it’s critically important. I think there is a tie to the experience.
Let’s focus on the employee for a minute that they’re going to have in your location. Can you recruit, attract, and inspire them to do great things for your customer when they walk in? And it can be very hard in those situations when there’s two or three branches in terrible conditions, I’d argue. Just give me one that is a great experience for the staff and the customer. And we’re still in those cases down in OpEx, probably down in CapEx and OpEx, but the experience has been elevated.
The rest of the story has ended up being a reminder for the CEOs in the room that they need to double down on being true to who they are. These organizations that are serving communities, being truly part of the neighborhoods and communities and cities they serve with staff members that are from those areas – forward thinking to take on education as a mantra to make sure people are better informed, make better decisions.
Do we let people get in debt, have high interest loans or do we educate people on money management, personal finance tools, the meaning of credit, how to save? There are endless amounts of things community banks and credit unions can do to add real value, build trust, and ultimately will result in net new households and more business by just doing good.
Sean Keathley (23:25): Well, as we’ve been doing these podcasts for two years, and clearly the pandemic has reshaped a lot of things. And so in thinking about the financial institutions and the challenges definitely have been a critical business stayed open and the headwinds of a pandemic valiantly serving their customers and markets and having to really pivot. And you think about innovation, my goodness, how about an entire industry innovating how to balance safety and security and security not just in health but in financial health? And I think that’s been a remarkable journey that organizations have been on.
I think that behaviors have bent, and they may not come back exactly the same. There have been a lot of different things that people have adjusted to as a result of what everyone has been through from where they work, where they’ve lived, how they shop. And I think that the financial institutions have done a remarkable job. And it just kind of reminds me thinking about the idea of you know, we believe in banking, and we know that banks do too, but it feels like the consumers are saying they do as well.
We need the boardrooms to look like the coffee shops. We need these neighborhoods to be strong. It’s one of the things I love about the community and regional banks. The bankers live in these communities and that is a reflection of what we’ve talked about with trust. And you talk about money and advice, having a familiar face or someone you believe in is absolutely key to that win-win scenario. And I think this is an exciting step towards a movement that we’re just seeing the beginning of. I think it’s a great one.
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, believeinbanking.com.