The banking industry has faced many challenges in 2020, from transitioning to CECL, managing Paycheck Protection Program loans, and navigating an unprecedented economic recession. Now more than ever, financial institutions are looking for guidance on strategies and best practices to support growth and profitability while mitigating risk in this turbulent economy. More than 500 banking professionals across the country gathered for a two-day 2020 ThinkBIG: Manage Risk. Drive Growth. virtual conference, to learn from industry thought leaders, peer institutions, and other experts. From economic forecasts to company culture, there were important takeaways for all community financial institutions.
From CRE to Corporate Culture – BIG Ideas from 2020 ThinkBIG: Manage Risk. Drive Growth.
Understanding the current state of banking and future expectations
For John Hatfield, Senior Credit Officer at Millennium Bank, the ability to better understand the current economic environment and learn how other financial institutions are tackling banking challenges in the face of COVID-19 was paramount for his team.
“Everybody kind of sits around every day and wonders how other institutions are handling this: how they’re preparing, how their policies are changing, how their approach to credit is changing,” said John Hatfield, Senior Credit Officer at Millennium Bank. “Hearing that information was really good confirmation to us on the things we’ve been doing as a bank.”
Millennium Bank, like many community financial institutions, is heavily concentrated in commercial real estate (CRE). Of course, COVID-19 has greatly impacted CRE over the last six months, with lodging, retail, and office spaces suffering a significant blow amid stay-at-home orders and other social distancing measures.
Joe McBride, Head of CRE Finance at Trepp, provided insight into the current state of CRE performance, as well as a forecasting update during ThinkBIG. “It was a really important presentation to see what his forecasting was for CRE, and to better understand what’s going on across the country,” said Hatfield. In April, Hatfield worked with Abrigo to complete a stress test. Hatfield was able to connect the content McBride provided to the earlier stress test results, giving him confidence that the bank was approaching their CRE business appropriately it was prepared to move forward.
Supporting company culture, attracting talent moving forward
The “new normal” has also impacted the banking industry internally, too. For Jill Hudson, VP, Operations Officer at Vision Bank Vision Bank, it was important to learn strategies regarding supporting a strong company culture during this time. Oklahoma-based Vision Bank has experienced rapid growth in recent years and is positioned for further expansion. However, like many financial institutions across the country, Vision Bank has also had to grapple with novel challenges created by the virus, such as remote working environments. Quick growth, coupled with a partially remote workforce, has added complexity to managing the bank’s company culture.
“Even though we never completely shut down, we did have people work from home. And the more remote you get, the harder it is to communicate,” Hudson said. “You’re so used to shouting into the room, ‘this is what we’re doing,’ and now you have to remember there are people at home that aren’t getting this information.”
Despite the challenges that stay-at-home orders and remote working have created, community financial institutions have demonstrated their ability to be nimble and accessible, providing critical services to their customers during this unprecedented and uncertain time. During the presentation, “Acquiring and Developing Customers During the Pandemic – How We Did It,” panelists discussed the important role technology and digitization have played in their capacity to efficiently support customers during this time, and they stressed that these strategies would be even more important moving into 2021.
“There is a demand coming from our customer base to make things easier, less cumbersome, and faster. At the end of the day, what counts for the customer is speed,” said panelist Okan Akin, President and Chief Risk Officer of Allegiance Bank. To support this customer experience, Akin recommended leveraging technology to drive efficiency in the back office. Community financial institutions must strike the right balance between leveraging technology to handle manual, mundane tasks to enable staff to focus on fostering customer relationships. “High touch, high service, relationship banking isn’t going anywhere, but we want to bring in innovation and technology that makes that proposition even more true tomorrow than it is today,” Akin said.
However, financial institutions must also have the talent to drive and support that initiative. This was an important takeaway for Hudson. “There was a quote, ‘You’re looking for talented bankers, not transaction processors,’ that really stuck with us,” Hudson said. At Vision Bank, which has a large presence in communities with local universities, they experience a lot of cyclical turnover. Rather than looking for short-term or part-time employees, Hudson said they would be looking for strong talent that they can invest in. “We’re not trying to push paper and process transactions; instead, we really need to look for talent that we can retain,” she said.
When seeking out talent, Akin suggested focusing on change management and hiring people who are open to change, new ideas, and new technology. “Community banking is here to stay, but in a way where it’s evolving and becoming more modern, and we need to attract the right talent pool to ensure we’re bridging those gaps.”
Planning for new technology and innovations
A signature feature of the ThinkBIG conferences is the ability for attendees to view the latest Abrigo innovations and learn how such technologies can improve community financial institutions’ efficiency and risk management. During this year’s event, Hatfield was particularly excited to see the new Dynamic Application. Millennium Bank had implemented Loan Application earlier this year and is currently using the tool internally with the intention of rolling it out to their customers in the future. After seeing the new Dynamic Application, Hatfield reflected on the bank’s current strategies and began thinking of ways the new technology may be able to build upon those plans to become even more responsive to Millennium’s clients.
“Abrigo has never slowed down their pace on innovation and change and making things better. For us, that’s a resounding reason why we choose to stay and invest in Abrigo,” Hatfield said. “They continue to listen to the field, which is rare. A lot of times it’s, ‘Here’s our software, here’s how we built it because we think it should work this way, and if you have a question, put it in a ticket.’ All of that keeps encouraging us about the brand.”