Lessons Learned & Looking Ahead at Banking in 2023

In the inaugural episode of the Believe in Banking podcast for 2023, Sean and Gina highlight industry insights on where banking has been and where it’s heading in the new year, including takeaways from speaking sessions at two of banking’s premiere conferences – The Financial Brand Forum and Future Branches. From the importance of brand in driving business to the future of retail delivery, they discuss what banking leaders are thinking as they set their priorities for banking in 2023. They also share key takeaways from Adrenaline’s original research, where 75% of industry leaders agree that brand critically impacts their organization’s business value. The research finds that more than half of the industry is seeking a total brand transformation and nearly 50% report that “bridging digital and human delivery” is their top priority.

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 to our Believe in Banking podcast. I am Sean Keathley, CEO of Adrenaline.

Gina Bleedorn: And I am Gina Bleedorn, on Chief Experience Officer at Adrenaline.

Sean Keathley: Gina, let’s kick off 2023. I am very excited. Give you some thought starters. We had a flurry of activity to end last year, and you specifically were on stage at two premier speaking engagements in December, and I thought it might be good for our listeners to maybe hear what are the big takeaways from both the Financial Brand Forum, the first one that had happened since 2019, and Future Branches as well. What do you think the industry is thinking about? Where are they? And maybe more importantly, where are they headed this year?

Gina Bleedorn: It was first so great, once again, to be in person since there’s been so few events. Future Branches came back the year before at the end of 2021, but Financial Brand Forum, as you mentioned, they have not been back since 2019, and that is really the industry’s largest in-person event for financial brand trends, marketing, branch trends, transformation, et cetera. So it was huge, I think for the industry to have that event come back. And really, I think the biggest takeaway from these events as far as where heads are at, it is around transformation, transformation in every way. I think the dust has settled from the disruption of COVID and all that the pivoting we know had to happen, and now people are ready to grow and they are ready to make moves. There was a sentiment of innovation readiness that really permeated everything. And we actually, at our booth, conducted our own research at that Financial Brand Forum event.

Gina Bleedorn: And one of the takeaways, more than 50% of the industry said they were seeking total brand transformation. And what I spoke about at that event was a keynote around brand being business strategy. Branding is not just a nice-to-have thing, it is an inherent and integral part of business value. And another takeaway from our research, 75% of the industry said they understood that brand critically impacts business value, but 24% say they consider their brand as peripheral to business performance. So, those are contradicting statistics. And in my keynote, which is available on adrenalinex.com, I spoke about stories of business transformation that brand change enabled. Name change or not, all of the businesses, banks and credit unions that I spoke about needed to create new relevance to either new markets or new people within current markets. And that is what brand change enabled them to do and grow.

Sean Keathley: Gina, the other thing that happened is the year-end of last year, which even gave you a better sense of what’s going on in the industry, those workshops that we did and what was unique about that format. It was a workshop versus a keynote, but you know, got to meet almost 300 community bank CEOs from Miami to Portland, Oregon and everywhere in between. Can you talk a little bit about how, perhaps even with the more community-minded organizations, these themes to apply? And I think there also you kind of uncover maybe why the brand conundrum of, is it business critical or not? That was interesting as we talked to all these people.

Gina Bleedorn: Yeah, we found that so many of them were not maximizing either their brand or their branch network in the way they could, and with digital transformation needing to be and continuing to be something that all financial institutions need to be doing. The things that already are there, that exist. Your brand and your branches, it’s time to leverage those. And that message seemed to be resonant to so many. In fact, I don’t know if there was really a single workshop attendee that didn’t think either their brand or their branches needed to be transformed in some way. And along those lines, on the branch side, on retail delivery, understanding some of the larger institutions used the word retail to mean branch network. The future of retail delivery was a panel that I moderated at the forum event, alongside some incredible industry experts from US Bank, from Synovis, from PSCU and from Deloitte.

Gina Bleedorn: And the topic was about balancing human and digital delivery. And really, the tenor of the entire conversation was that the humanization of banking cannot be lost. Digitization must occur, but especially considering digital journeys are not near what most institutions want them to be. In fact, only 9% of bankers said in a BAI banking outlook survey last year that their digital customer experience was excellent. So especially considering the state of digital transformation for most, the human factor, that’s what you do best, so use humans for what they’re good at and leave transactions and the mundane things that digital can do to digital. A member of our team that used to be a banker, Ben Hopper, headed up retail strategy for First Horizon Bank, and then he moved to USAA and took on an omnichannel job. And really, he missed the human part of banking, so he came to join our team at Adrenaline for that reason and now leads retail strategy for our clients.

And what Ben has said is that we need to move past omnichannel. We’re moving into a more total experience journey that is channel-less so that you’re blending physical, taking the best from physical and infusing it into digital, taking the best from digital and infusing it into physical for creating an optimal customer experience regardless of channel.

Sean Keathley: And we’ve said before, but it’s worth repeating, the reason that the financial industry has to have a blend is because money is emotional. It is just very different than how you get your groceries, and that that’s the reason for the balance.

Gina Bleedorn: Ben actually says if omnichannel is a bowl of fruit and the different channels are the different fruit, a more advanced approach means put the fruit in a blender and make a smoothie. One of the panelists actually referred to omnichannel as the O word because it’s such a big, scary, undefined thing. Nobody really knows what it is or how to do it. What it really means is let’s just balance human and digital service delivery. And nearly 50% reported at our onsite survey that bridging digital and human delivery was in fact their top priority for 2023. So speaking of 2023, time to put on our futurist hat. Sean, I know that’s your favorite hat. What do you think is the biggest challenge that most of our clients are facing as they go into 2023?

Sean Keathley: I love this hat. It is becoming clear, as we mentioned, having talked to major conferences with attendees from all over the country and many for the first time since the pandemic, and then hearing from these community banks, that there are some real themes developing. I think one, bankers are risk adverse, but in 2023, there really isn’t an option to do nothing. And we are absolutely seeing that, there is a commitment to growth for talent acquisition, which is a challenge. But at the same time, this is not the perfect economic cycle, and I think there’s a reason that banks are pushing through the rate environment is tough, the job market is still strong, but we’re in more of a down cycle. We won’t use the R word officially, but there is a, I think, and this is a believe in banking moment for banks, there is a macro trend going where you see some larger organizations, there are four or five pretty sizable organizations that are merging early part this year.

We have the Flagstar New York Community, we have BMO out of Canada with their acquisition of Bank of the West. TD has bought First Horizon, US Bank has bought Union Bank. There is a lot of macro activity, and that is driving activity at the community level where you’re seeing in some examples, some larger banks have even left communities. And the community bank is left with a bit of a conundrum. On one hand, they’ve looked for growth and they’re moving into metropolitan markets or secondary markets. They’re also finding themselves as the last bank in town in very small markets. So this idea of having a network approach to the physical distribution versus a build a new building, a new market approach is one that has become really prevalent, and we’re now seeing it in middle America. And that has really been interesting as we start the year.

Gina Bleedorn: 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: Well, banking is a people business. We’ve said that before, that it is a strength in 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 and 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 your growth, you are going to have a harder time in expansion efforts and always.

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.

Gina Bleedorn: Talk about one of your favorite clients that really has done an exemplary job on reputation ranking according to a recent American banker article.

Sean Keathley: Yeah, Frost Bank. I know who you’re talking about. They are so well respected. It’s interesting because their current footprint is the state of Texas. They’re not a national bank. But it’s rare I go anywhere and talk to bankers and they not aware of Frost. And they bring amazing combination of rich legacy and tradition into what’s relevant for today. They remind me of my first employer before Adrenaline, which was Enterprise Renter Car. And they’ve been an incredibly successful with a similar kind of tenant about the idea of focus on the client and the employee and profit will follow. And I don’t know if Frost thinks that literally about it or says it in those terms, but that’s how they behave. They do good, and they do things not because there’s a regulation that says they should, or socially. It’s now expected. They do it. because they think it’s right, and I think that’s really amazing.

Sean Keathley: We had Jimmy Stead on our podcast during COVID, and he talked about this. The idea of the neighborhoods in Houston and the branch manager went to the high school around the corner. And so that’s a great example of being a fabric of the community. And the last thing I’ll say, I just watch Frost. One of the things I admire most about them is they don’t think of the finish line. They don’t see themselves as ahead of everyone. They’re constantly improving, and they’re going to be doing some exciting things in the next two or three years. And although we kind of say they are a great example, I think that’s the other thing that makes them great, they think they’ve got work to do, and that really does speak to the North Star kind of theme we’ve been talking about for the last couple years of think of your North Star as your journey that you maybe never really get to.

Gina Bleedorn: So it’s no surprise, given all you’ve just said about Frost, that they are at the top of that list for their reputation for comprehensive innovation. That’s why American Banker recently partnered with a company called Track to literally gauge the value of reputation in banks across the country. Reputation really, it has never been more important. And we see the shared nature of reputations in everything we do every day. From Amazon ratings to Yelp ratings to of course word of mouth advocacy and sharing on social, having actual influencers to have legitimate reputation building it. It’s a whole thing. So, reputation really matters more than ever. And even though it’s yours, you own it, you can’t fully control it. So the best you can do is put the best experience out there all the time in every way to ensure your reputation is as strong as it can be.

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