Banking Mid Atlantic Issue 1 2020

ISSUE ONE 2020

BANKS BECOMING MORE INCLUSIVE WITH THE DISABLED KeyBank Among The Best Nationwide For Its Practices

A PUBLICATI O N O F A M E R I C AN B U S IN ES S M ED IA

Start Building Stronger Business Relationships Today.

Now with coverage across New Jersey, Pennsylvania and Delaware, bankers across the region turn to our magazine, Banking Mid Atlantic, for essential news, information, and analysis in an evolving marketplace. As a source for thought leadership in the banking industry throughout the mid atlantic, banking executives and managers rely on the magazine for vital information on how to better serve their customers, efficiently run their institutions, and adapt in a transforming industry.

Advertising in Banking Mid Atlantic will give your brand a significant advantage within a competitive market and increase your exposure among thousands of companies that serve the banking industry. Position your message in front of 400+ financial institutions and over 8,000 industry professionals – 90% of whom are executives, vice presidents, and department managers.

To learn more about BANKING MID ATLANTIC or to customize a marketing program unique to your business needs, call 860-719-1991 or email vvalvo@ambizmedia.

ISSUE ONE 2020

TECH Cyber security Means never resting

Hiring the Disabled

4 11 Letter from the Tech Focus

17 Tech Focus

5 Research

18 Tech Focus

Roundup Of The Latest News From The Banking Mid Atlantic Enewsletter About Banking In New Jersey, Pennsylvania And Delaware

20 On the Move

Find Out The Best Park Your Workers Want

Publisher

Mid Atlantic Businesses Mostly Upbeat for 2020

BankMobile Ups Its Digital Game

The Right Steps For Martech Solutions

12 Technology

Three Major Trends Driving Digital Tech

14 6 Cover Story Looking Ahead

Don’t Let Your Cyber Guards Down

Five Years From Now, Data Science Drives Branches

How Banks Can Get Better At Hiring The Disabled

Solving The Hunger For Deposits At A Lower Cost

Half Century Career Nears Its End

9 Tech Focus

16 Transition

Bankers Making Their Marks In The Mid Atlantic

22 Did You See?

23 Survey Says!

CONTENTS

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14 COVER STORY

www.ambizmedia.com ISSUE ONE 2020 | BANKING MID ATLANTIC

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LE T T E R F RO M T H E P U B LIS H E R

This ‘Gig Economy’ Means Banking By The Gigabyte

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s I write this, I’m looking down at a check for $7,990 that just came in the mail. And I’m realizing that the only way this is going into my company business account is if I get in my car and drive to my bank branch.

And then I realize, this is nuts.

Most of our company business is online – we take credit cards for most sales. Every now and then, though, someone has to pay by check. My bank has suggested that they would put a check scanning device in my office. But I’d have to put it somewhere, and I’d have to pay a monthly fee – neither of which I want to do.

I’d scan the check with a mobile app. But my VINCE VA LVO bank – a large international institution with a strong regional presence along the eastern seaboard – has a cap of $5,000 for business checks that can be deposited that way.

So, this check can sit on my desk while my email account keeps pinging with credit card sales. Or I can handle this the old-fashioned way by taking it in hand to the next available teller down the street. Or maybe, I can start looking for a new institution that knows how to do things in the digital age.

Banking’s New Day There is no shortage of stories about the digital revolution in banking. But what is surprising is how long it’s actually taking. Obviously, where safety and soundness are concerned, we all want there to be ample due diligence and caution.

But most banks and credit unions already offer some forms of electronic banking.

They’re just not offering enough.

Bank branches remain important, but their functionality and purpose are undergoing metamorphosis. They are way stations on the journey to a transaction, but they needn’t be the terminus. They are the trains for those who don’t want to fly the digital skies.

We are seeing the sparks of a major conflagration that will soon be in full flame: Consumers want a digital experience first, with physical branches as a fallback position, not the reverse. But many banks have yet to embrace that idea. It’s why the companies that have begun as digital lenders are now swallowing up chartered banks, such as the recent Lending Club acquisition of Radius Bank in Boston.

Bankers should be actively looking at all possible strategies to deal with this rapid change. Because consumers and businesses aren’t waiting, and neither are the new digital upstarts. They’ve already cashed that check.

VINCENT M. VALVO Publisher & CEO

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STAFF

CEO, PUBLISHER & EDITOR Vincent M. Valvo ASSOCIATE PUBLISHER Beverly Bolnick MANAGING EDITOR Keith Griffin GRAPHIC DESIGN MANAGER Stacy Murray INTERACTIVE DESIGN DIRECTOR Alison Valvo ONLINE CONTENT DIRECTOR Navindra Persaud MARKETING & EVENT ASSOCIATE Melissa Pianin ADVERTISING COORDINATOR Francine Miller EDITORIAL Eric C. Peck CREATIVE SERVICES Joey Arendt ENGAGEMENT AND OUTREACH Andrew Berman CLIENT SUCCESS COORDINATOR Jaclyn Leitermann

Submit your news to editorial@ambizmedia.com If you would like additional copies of Banking Mid Atlantic Call (860) 719-1991 or email info@ambizmedia.com

www.ambizmedia.com © 2020 American Business Media LLC All rights reserved.

Banking Mid Atlantic magazine is a trademark of American Business Media LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher. Advertising, editorial and production inquiries should be directed to: American Business Media LLC 345 North Main St., Suite 313 West Hartford, CT 06117

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Businesses Expect Success in 2020, But Have Doubts About Economy B Y K E I TH G RIF F I N, B A N K I N G MI D AT L A N T I C

ost small and midsize U.S. business leaders expect continued growth for their companies this year amid a less robust economic environment, according to the annual JPMorgan Chase Business Leaders Outlook survey. Three out of 4 businesses – 76 percent of midsize companies and 74 percent of small ones – are optimistic about their own performance, and the majority expect to grow sales this year (70 percent of midsize companies and 62 percent of small ones). They’re leaning into this expected growth through measures including more widespread adoption of new technology and increased hiring.

The national and global business outlooks are more cautious, with midsize companies reporting a drop in optimism from 2019. While more than half of midsize (59 percent) and small (52 percent) businesses remain optimistic about the national economy, this marks a decline of 14 and 3 points from a year ago, respectively. Compared to the rest of the country, midsize companies in the Northeast, which encompasses New Jersey, Pennsylvania and Delaware are more cautious about the local economy (50 percent optimistic vs. 63 percent all U.S.).

Also worth noting, midsize businesses in the Northeast are more likely to cite attracting new customers as their primary focus for growth strategies (72 percent vs. 64 percent all U.S.). Despite a more cautious outlook for the local economy, Northeast midsize business respondents are more likely to increase personnel in the year ahead (61 percent vs. 55 percent all U.S.).

Jim Glassman, senior economist at JPMorgan Chase, said there is an important caveat: slowing economic growth isn’t a sign of weakness. “While economic growth may not be as rapid as it was in previous years, the economy is still expanding, which is good news for small and midsize businesses,” he said.

“We’ve generally found that growth expectations for small and midsize business leaders are more based on Jim Glassman where we are in the economic cycle than in the election cycle, and currently we are in the part of the economic cycle during which the pace of economic expansion naturally settles down.”

Hiring from a Shrinking Talent Pool Businesses want to hire to prepare for an expected uptick in sales, but a limited supply of qualified candidates is making it increasingly difficult to do so.

• For the second consecutive year, midsize businesses rank this as the #1 challenge, constrained by a lack of applicants and unique skills needed for the job. This is a reality for small businesses as well: 31 percent report that they are extremely or very concerned about the candidate supply, up from 28 percent last year.

• Still, businesses are forging ahead: 55 percent of midsize businesses and 39 percent of small ones expect to increase full-time employees over the next year. Small businesses also expect a jump in part-time employment, with 38 percent planning to hire, up 7 percentage points from 2019.

• To retain talent, businesses plan to increase compensation, improve benefits and provide flexible hours.

Midsize companies in New York are slightly more likely to hire (59 percent vs. 55 percent all U.S.). The percentage of companies planning to increase compensation is the same as at the national level (71 percent).

“This is actually good news for workers and is a reflection of the strong economy,” said Glassman. “Low unemployment means there are fewer people looking for jobs, so the job market is more competitive. This means companies looking to attract and retain talent are going to need to implement changes to be more competitive including better wages and benefits, which we’re seeing reflected in our survey.”

Planning For the New Decade Businesses should get comfortable with today’s complex operating environment, and keep the following considerations in mind as they plan for the year ahead: 1. Don’t be fazed by the US economy’s new normal. The durability of today’s expansion is unlike anything we’ve seen before. Rather than compare to business cycles of the past, look instead to key metrics like unemployment and inflation to get a fuller picture of the economy’s health. With strong fundamentals and no clear recessionary trigger, it seems likely the expansion could continue at a slower pace for a sustained period.

2. Embrace technological change head-on. The most successful businesses are using technology to stay ahead of the competition, drive efficiency and build a seamless customer experience. Evaluate the latest tools to make sure your business isn’t left behind. Learn more.

3. Educate staff on cybersecurity. With the pace of cyberattacks rapidly accelerating, 2020 is the year to make cybersecurity a priority. Defenses are only as strong as your leastprepared employee, so investing in training and controls can help protect against the threat of sophisticated attacks. Learn more.

4. Make your values central to your business. In a tight labor market, defining and investing in your company’s environmental, social and governance priorities can be a differentiator in employee recruitment and retention. Learn more.

5. Take advantage of global expansion. Despite geopolitical complexities, international business opportunities are too significant to ignore—and the ease of technology and travel make them more accessible than ever for companies. Evaluate global markets and supply chains carefully to determine how to best tap into new markets.

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CRYSTA LB

What Will The Branch Look Like In 2025?

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LOOKING AHEAD

Data Science Will Play A Huge Role Regardless

B Y IA N H O U G H, S P E C I AL TO B A N K I N G MI D AT L A N T I C

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hat will bank branches look like in the future? This is the burning question on many industry peoples’ lips, and for good reason.

In preparation to write this article, I did what any bank branch expert would do and Googled it. No, really. But some of what I read sounded more like an episode of The Jetsons than a commonsense description of how current culture and technology might evolve based on our own studies here at Solidus. There were references to flying cars and customizable robots, holograms and advanced biometric security, and who am I to argue with these conjectures? Flying cars aside, most of it sounds pretty much inevitable. But ‌ Predicting what branches will look like in 2025 really is just a speculative view through a crystal ball, mainly because unforeseen technological innovations and subsequent lifestyle changes may derail current trends. But if one thing is certain, it is that data science will soon play a more central role in the location, design and function of bank branches.

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Most writers choose to focus on the technology and superb customer service we’ll come to expect by 2025, without explaining how data and artificial intelligence (AI) will be at the root of the culture. Big Data has been a thing for much longer than many people realize. Masses of statistical information about human populations have been collected for hundreds of years, but it is only recently that AI has begun to do magical things with it.

Previously undreamed possibilities have opened up for marketers and retailers—and community banks need to be part of this. Currently available (but largely underutilized) data applications for our industry include: market and socioeconomic analyses to determine the most profitable branch locations; strategic (data-driven) designs that drive selection of market-preferred branch delivery channels, and marketing insights compiled from automated and manually-entered customer relationship management (CRM) data that enable superlative and timely customer experiences.

Big Data And The Science Of Where

“Masses of

design branches whose delivery channels and layouts are tightly coupled to market preferences and therefore more likely to receive higher traffic and usage. This will be the norm within the next five to 10 years, and financial institutions that fail to apply data to their branch designs will appear irrelevant and fall by the wayside.

Dialogue Banking & Data Capture

In these times of decreased branch traffic, every visitor to your branch deserves your full attention, and to be made to feel part of your organization’s mission. Relationship building is the first objective of dialogue banking, but the goal of deeper customer engagement should ultimately be data capture. Some progressive banks today are already experimenting with highly personalized banking experiences, facilitated by specialized CRM tools.

Unfortunately, most banks are not yet following this practice. This situation will have changed dramatically by 2025, as the importance of truly knowing your customer assumes a central role in banking. statistical

When evaluating potential information about human branch profitability, location Where Do You is everything. Banks today are Find This Data? populations have been adopting the use of location The type of data being collected for hundreds of analytics in growing numbers, discussed above is supplied and by 2025 the practice will be by companies who specialize years, but it is only recently integral to the business of siting in geographic information and designing new branches, as systems (GIS) software and that AI has begun to do well as evaluating existing ones geodatabase management magical things with it.” for consolidation or closing. The applications. The data is only harsh reality is that stagnant one component of the overall branch networks that continue process; analytical expertise to perform barely adequately and on-the-ground field work (while competitors relocate and evolve around them) conducted by site selection professionals is also required will see diminished profits and lower branch traffic, and when determining a location for a new branch. Financial they might not even exist in 2025. industry-experienced architects, designers and builders The time to apply Big Data to branch network can use the same type of data to create custom branches optimization is now if survival is to be assured. Future that are optimal for their markets. And finally, financial branch site selections will be supported by such thorough institutions themselves can load CRMs with their own location and socioeconomic analyses that they couldn’t customer data to provide seamless experiences across possibly be sited any better than where they’ll be. And channels that reflect their customers’ most personal considering that it takes one to two years from initial preferences. When this data is combined with specialist planning to the opening of a new branch, 2025 is a lot expertise, AI and banking technology, we will have truly closer than it seems. entered a new age in banking.

Market-Driven Branch Design

Data drives branch site selection and branch strategy, which in turn drives branch design. Socioeconomic analyses can reveal correlations between customer segments and successful branches in geographically different markets. These types of data can uncover detailed information about who your best customers really are (earnings, magazine subscriptions, favored grocery stores and restaurants, etc.).

Knowing who your best customers are, and why your brand resonates so well with them, means being able to

2025—A New Age in Banking

By 2025, physical branches will have evolved to become super-efficient and convenient, sited in the best possible locations to maximize traffic and access. Branch architecture will be tailored to resonate with specific socioeconomic groups and to reflect the degree of financial and cultural sophistication in each market. The smart technology inside branches will be connected to customer devices, the organization’s CRM, and beyond to other databases.

The so-called “Internet of Things” will be married in

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a very real sense to our most basic technologies, and ultrapersonalized service will be the norm. We’ll be synced up to our financial activities via apps, electronic calendars, and even implanted chips. Advanced beacon technologies will detect our presence in (or close to) branches and send welcome messages, updates, invitations to events, or reminders to pay bills or make deposits.

Here We Go… Perhaps now we’re finally ready to start the engine of our decidedly terrestrial car and, with the above in mind, take a trip to our local bank branch in the year 2025. The first thing we notice as we approach the branch will be the visual impact of the exterior branding and signage and possibly even branding elements being projected outward from the branch interior. Our smartphone may buzz as we’re reminded of the appointment we have with a financial consultant within the branch, or perhaps with offers of specific services we are known to seek around this time of year. The general exterior architecture clearly reflects that of nearby housing developments, local geography, or even ethnicity, whose occupants tend to compose a certain socioeconomic group.

As we enter the open-plan space, a digital handshake between our phones and every in-branch application ensures that all of the organization’s networks are aware that we are in the “area of play.” A concierge seated at a “perch” by the door acknowledges us by name, and our name then appears on one of several flat screens set in the facing wall. The image on the screen of an enthusiastic banker beckons us forward. The exchange rapidly assumes a “meta” quality as the two of us begin discussing information we are simultaneously accessing on phone and tablet independent of the audiovisual software that connects us.

There are ITMs (the preferred transaction method of

our locale) built into a lustrous natural wood wall to the right. Beyond it, past the hydration bar, defined by “living” movable wooden slat walls that contain snaking vines, we see several casually differentiated areas: a consultancy “cove” for semi-private financial discussions with easy chairs and a coffee table; a more privately walled-off area with higher table and chairs, and, beyond these, two private, glass-fronted offices for completely confidential appointments.

The central space is broken up by interactive standalone kiosks and multimedia merchandising elements, each of which loads the most appropriate dialogue topics with which to engage any known visitor within the branch.

We expect to be able to interact on a custom personalized level with any piece of technology we choose with minimal security concerns.

Our conversation with the image on the flat screen has transferred to SMS media with a third party now included—a consultant in one of the private offices, who is accessing our information via their PC as we walk past the living walls and hydration bar to meet with them face-toface. We relax as we anticipate this face-to-face meeting; it is more secure, and there’s sometimes a need to connect emotionally over personal finances. In 2025, we still feel a little threatened when we see our most intimate property being displayed or discussed via technology like email, websites, or chat bots.

Because despite being immersed in all this amazing technology, we are mortal, and we trust nothing more than another warm body with which we can literally shake hands.

Ian Hough is director of marketing for Solidus, a construction company specializing in branch transformation for the financial industry.

Customers More Satisfied With Banks Than Credit Unions It’s a pyrrhic victory of sorts. Banks have higher customer satisfaction than credit unions but only because of increased dissatisfaction with credit unions.

The American Customer Satisfaction Index’s Finance, Insurance, and Healthcare Report 2018-2019 shows nationally customer satisfaction with banks is down 1.2 percent to a score of 80 (on a scale of 0-100). Credit unions, though, saw an even bigger drop in consumer satisfaction. They were down

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2.5 percent from 81.5 to a score of 79.

Among banks, regional and community institutions still lead the pack despite a 1.2 percent drop to 83. However, national banks close the gap, up 1.3 percent to 78, placing them in a tie with super regional banks (down 1.3 percent) for the first time.

This year, all four national banks are at or within a point of their record-high scores for customer satisfaction. Citibank surges 3 percent to the lead at 81, and Chase is second at 79, inching back 1

percent from its record high posted a year ago. Bank of America is next, up 1 percent to 77, followed by Wells Fargo, which rises 3 percent to 76.

“Customers want mobile options, and big banks have the resources to deliver,” says David VanAmburg, managing director at the index. “As technology improves, so does customer satisfaction. The personalized service that’s the hallmark of smaller banks and credit unions may no longer be as critical to customers, especially a younger demographic.”

Among super regional banks, BB&T leads after a 1 percent increase to 80.

Last year’s leader, Capital One, dips 2 percent to 79, meeting PNC Bank (up 1 percent) and U.S. Bank (unchanged).

Three banks match the category average with scores of 78: Citizens Bank (unchanged), Fifth Third Bank (up 4 percent), and Regions Bank (down 1 percent).

TECHNOLOGY

‘Bank-in-a-Box’ Service Speeds Going Digital

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B Y G E O RG E YACI K, S P E C I AL TO B A N K I N G MI D AT L A N T I C

anks are always hungry for more deposits, more loan volume, more customers. Often that search involves expanding into different markets, but the cost of opening a new brickand-mortar branch can run upwards of $1 million, not including the land and employee salaries, a major investment for a small bank – and with no guarantee it will succeed. Acquiring another bank is an even more expensive option, plus it brings with it an 18-month or more integration project.

So, growing digitally might make a lot of sense.

Banks just need to ensure digital solutions are done well across a variety of platforms.

That’s the goal of NYMBUS SmartLaunch. The company’s “bank-in-a-box” solution enables financial institutions with either federal or state charters to create a turnkey digital bank under their existing charter in as little as 90 days. The company’s website says this eliminates the need to undergo a conversion or hire additional staff. NYMBUS provides the required operational and technical resources required,

including 24/7 support and targeted digital marketing and website services, “so that financial institutions can quickly generate sustainable new deposits and revenue.”

Not only that, but it promises to do so without the bank putting up any money upfront, says Drew Dizon, NYMBUS’s senior vice president for strategic solutions. There are also no setup, integration or implementation fees. The bank doesn’t pay anything until its digital offspring is ready to go Drew Dizon live, when it pays a monthly platform fee – which Dizon says is “significantly less than what they would pay to start a traditional brick-and-mortar branch” – and transaction fees based on the products and services that customers use, such as bill pay, debit card usage and the like.

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Multi-Year Commitment

“A true digital experience is designed to reduce friction as much as possible.”

––Rutger van Faassen

Banks make a three- to seven-year commitment to SmartLaunch.

The length varies depending on the product set purchased, the number of states a bank wants to enter and/or the desired demographic or affinity they want to target.

Dizon says the platform fee typically is less than an average fully loaded branch depending on location. Typical branches take upwards of three years to break-even with less and less people utilizing the branch network. “Depending again on the target states, demographics or affinity groups, our clients can break even in year one especially with the ability to collect a significant amount of interchange income from digital customers who utilize their debit cards much more frequently instead of using a branch for making transactions,” he says.

“I haven’t seen anyone in the banking business doing what we’re doing,” Dizon says. “We package holistically the entire front-office and back-office operation – including marketing, office operations, infrastructure, fraud management, security, everything you would do to run a digital bank – and launch it faster than anybody else in the market. From soup to nuts, NYMBUS can run the entire digital bank for our clients.”

While other companies can handle the back-office technology part of creating and running a digital bank, what sets NYMBUS apart, Dizon says, is its ability to help bank clients target new customers on the web. Essentially, Dizon says, the bank tells NYMBUS the demographic group it’s trying to attract and NYMBUS does the rest.

“Our secret sauce is the marketing piece,” he says. “We started as a platform for the media industry. The big media companies use our platform for digital marketing. We use that same platform for our banking platform for digital advertising.”

“One of the nice things about our database and our platform coming from the media space is that we have all that data already built into our platform,” Dizon says. “Once we identify the customer or client profile that the bank is looking to attract, our marketing platform can really drill down and find the exact customers they want and advertise on the sites where they go. We are using a variety of tools to market but also to follow those users online.”

Ten Branches ‘Built’

NYMBUS’s marketing job doesn’t end once a prospect becomes a customer. Its

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platform sends out email notifications to cross-sell customers on other bank products or to get them to utilize services that they haven’t been using.

So far NYMBUS has created 10 digital banks that are up and running, such as BankMD, a digital brand for medical professionals started by TransPecos Bank in Texas. Another 10 are in the implementation process, seven of which are expected to go live in the next few months. In addition, the Miami Beach-based company is doing traditional core technology replacements for banks that are migrating to the NYMBUS platform. It is also working with three de novo banks that are working on getting a banking charter. “ C u s t o m e r expectation is rapidly moving towards demanding a digital option,” so only a handful of banks can get by long-term without one, says Rutger van Faassen, vice president of Rutger van Faassen consumer lending at Informa Financial Intelligence. But he warns, “like with many things, doing something badly could be more harmful than not doing it at all. So, if not done correctly, a bad digital experience can create increased customer frustration.”

“It is very important for a traditional brick-and-mortar bank to create a true digital experience and not simply a digitized experience,” he advises. “A digitized experience is taking an offline process and creating the online version of it, such as taking a loan application form and putting it online without adjusting it for an online experience. A true digital experience is designed to reduce friction as much as possible.”

Building Without A Charter

The company is also looking to help financial technology companies, retailers and others to launch digital banks. If they don’t have a banking charter of their own, they can partner with one of NYMBUS’s banks.

“There are a lot of well-known brands out there that are looking to leverage that brand by partnering with banks,” Dizon says. “They can target their employees or customers and offer rewards and incentives and the bank can serve as a revenue generator.”

NYMBUS recently helped Surety Bank in Florida launch booyah!, a digital bank that targets young professionals.

“We wanted to have a brand that is separate from Surety Bank, something that could be at a more national level,” says Ryan James, president and CEO of the four-branch bank.

“The greatest thing about digital banking is you can finely target advertisements and learn and evolve and if things don’t work in an area Ryan James you can change on a dime,” he says.

“You’re not committed to a physical location. But if something is working you can add more ad dollars to that specific group that you’re targeting. You can brand many different ways. It’s a way to test the waters.”

“What’s great about this is you reduce your advertising costs and you don’t have the hard fixed-asset cost of traditional banking,” he adds. Getting a new customer in a traditional retail banking environment might cost about $500 once all the costs are considered. “At booyah! we are

already seeing that cut in half,” James says.

Surety has plans to open two more digital banks in the near future, including one targeting former professional athletes and their fans.

Clear Definitions

“When creating a digital experience, it is also important to define it differently for each channel, such as desktop, mobile, mobile app, chat and the like,” advises van Faassen.

“Each channel has unique characteristics, so replicating a desktop website to a mobile browser does not create the best experience for a mobile customer.

“This also brings up the need for an omni-channel approach, where customers can choose their preferred channel at each step of the process and resume in another channel without having to restart the process. This can be a key point of frustration. If banks create a digital experience that does not allow a customer to move between different channels without losing information, the experience can be worse than being forced to do everything in a branch.”

BankMobile Rolling Out Digital Banking Enhancements

BankMobile, a division of Customers Bank, and among America’s largest and fastest-growing digital banks, announced continued innovations and enhancements to its digital banking platform. BankMobile will offer a two-day paycheck advance, a savings account with a rate that is equal or higher than that offered by Marcus, Ally and Capital One 360, and a team of personal bankers for every direct deposit customer. All three enhancements will be rolled out in the first quarter of 2020.

“One-third of Americans are living paycheck to paycheck and almost 50 percent do not have enough to pay for a $400 emergency. BankMobile is addressing this pain point with a two-day paycheck advance offering. In addition, most challenger banks are targeting the low-income segment; however, we believe there is also an opportunity to serve the mass and emerging affluent and our new savings account will compete for these customers.

“Lastly, as banks continue to become more high-tech, consumers are missing out on a high-touch experience. We believe in the value of a personal approach to banking and are thrilled to announce that all of our customers with a direct deposit will have a team of personal bankers available to discuss their banking needs,” said Jay Sidhu, chairman and CEO of Customers Bank and executive chairman of BankMobile, which operates out of New York City.

Sidhu discussed these enhancements at The Digital Money

Forum taking place at CES as part of “The Digital Revolution in Banking” panel that took place Jan. 7, 2020. The Digital Money Forum is focused on helping the tech community make the shift to digital currency.

Launched in January 2015, BankMobile’s mission is to provide a compliant, mobile-first banking experience that is simple, affordable and financially empowering. Over the past five years, BankMobile has grown to be in the Top 15 banks in the U.S. in terms of number of consumer checking accounts serviced.

Named “Most Innovative Bank” by LendIt in 2019, BankMobile has also developed its own proprietary technology meant to attract and engage customers for full-service consumer banking with a focus on exceptional customer experience. The bank has approximately 270 team members, with over 40 percent entirely focused on technology development and user experience design.

The bank also has a disruptive, multi-partner distribution model, known as “Banking-as-a-Service” (BaaS). Today, BankMobile provides its BaaS platform to colleges and universities through BankMobile Disbursements, which serves more than five million students on nearly 800 campuses nationwide. Through this distribution channel, BankMobile serves one in every three college students in the country. Earlier in 2019, the company expanded its BaaS strategy with T-Mobile for the launch of T-Mobile MONEY.

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T E C H N O LO GY

Digital Technology Trends in Banking: 2020-2025

D Nick Miller

B Y NI CK MI L L E R, S P E C I AL TO B A N K I N G MI D AT L A N T I C

igital technology—hardware and software—are driving three major banking industry trends: digital transformation, brand specialization and partnerships.

Banking executives need to pay close attention to all three if they expect to capitalize on the opportunities these trends will create.

TREND 1: DIGITAL TRANSFORMATION Digital transformation is huge. It includes a long string of related ripple effects including digital marketing, payments and analytics that will change business models and banks’ relationships with their clients. “A lot of companies are looking for ways (to provide financial services and) we’re behind (in developing and launching digital offerings),” said Linda Duncombe, a City National Bank executive vice-president.

“We have to think bigger and we have to move faster on bigger thinking.”

For example: Google Duplex has demonstrated the capabilities of AI-driven software to mimic human voice and social interactions while making restaurant reservations.

In May 2019, Google announced plans to expand Duplex for automated completion of forms on the Internet. Such

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technology could automate customer notification should it detect unusual changes in bank accounts or determine a need for financial services updates.

Capgemini, a global technology consultant, reports nearly 25 percent of retail banking customers prefer a voice assistant over personal banking visits—a figure likely to increase in three years. Bank of America’s digital assistant, “Erica,” used by more than seven million customers, handled 50 million interactions in its first year. Additional research finds more mid-sized banks and credit unions are either planning to invest in this chatbot technology or discussing the possibility.

TREND 2: BRAND SPECIALIZATION Brand specialization signifies development of one or more types of expertise or signature specialties to differentiate, attract or retain customers who generate additional revenue.

The most important question with this trend is strategic.

Given the impact of digital transformation, demographic changes and other factors, what do banks want to be in five years. How will they stand out and what will constitute their customer base?

Predictable responses focusing on people, service and community dedication no longer cut it, according to Chris Meyers, president and CEO of CVB Financial Corporation. “I think the retail consumer game is over… unless you’re in a

small rural area,” he said.

It’s over for two reasons. First, it’s nearly impossible to compete with national and super-regional bank brands especially in large urban areas. Citizens Financial attracted $3 billion in new deposits by the end of 2018 with the launch earlier that year of its online Citizens Access while figures from Chase show annual deposit growth of 9.4 percent since 2014, more than twice the 4.6 percent average annual rate for the rest of the industry.

These impacts go beyond major markets thanks to multimillion advertising budgets. “Our customers see their TV ads and they all expect that we should be able to open accounts in five minutes,” said a community bank president in Missouri as he explained why his biggest competitor is CapitalOne instead of another local bank.

Second, community bank brands need to stand out if they are to compete successfully with other local banks. One answer here is to develop one or more niches or specialties.

For example, in the Northeast, Rockland Trust, listed by Forbes among the “World’s Best Banks for 2019,” developed a strong condo homeowner association lending program.

Sterling National Bank in New York developed specialties in professional practice financing, law firm banking, and nonprofit services. Cambridge Savings Bank has a specialized residential home builder program that complements its strengths in commercial real estate and construction lending.

Stearns Bank, a St. Cloud, Minnesota community bank has taken another approach by launching successful national programs, for example, small ticket equipment leasing.

According to Kelly Skalicky, CEO, the bank provides small ticket loans, $20,000 up to $48,000, totaling 12,000 to 13,000 per year, electronically all over the country.

TREND 3: PARTNERSHIPS. To remain competitive, traditional banks need to think and act more like the technology companies that have defined customer experience outside of banking. They face three challenges: 1. Cost – the expense of designing and building new products 2. Talent – attracting the design and development talent needed for app building and other digital capabilities 3. Speed – the rapidity with which bank teams internally design and develop products and the speed with which core systems providers implement those products.

Partnerships with fintechs can address all three challenges.

Fintechs are tightly focused and significantly faster than banks in innovating new products. Through partnership models, banks can focus on attracting and nurturing a client base and providing products sourced from an ecosystem of partners.

Products can be inserted through a platform or withdrawn as needed, providing customers with quicker access to a broader range of products than what the bank could produce on its own.

Globally, more than 5,000 fintech organizations offer a variety of products; e.g. lending, expense management, account opening and dashboards. The selections will depend on the bank’s focus such as its target customers and opportunities to overcome customers’ financial challenges.

Partnership success depends on developing bankers’ skills and having the expertise to source and negotiate partnerships with fintech providers in the following areas: • Aligning strategy. Agree on focus, e.g. customer experience, new capabilities or new customer segments, and leveraging each party’s strengths.

• Finding common ground. Agree and align around best market opportunities, appropriate value propositions, expertise and commitment to regulatory compliance. Just as important--the overall fit of the partnership, especially the bank’s ability to innovate quickly after the partnership begins.

• Monetizing partnership investments. Develop a realistic profit strategy in which clients are attracted to a new offering in sufficient scale and in short-enough time to meet both parties’ expectations.

• Scaling and adjusting the nature of the partnership.

Develop a roadmap that will guide evolution of the partnership as competition, industry conditions, internal bank environments and priorities change.

LOOKING AHEAD Digital transformation will fundamentally change bank economics and revenue models in the next decade. To sustain long-term success, banks will need to develop one or more dominant specialties enabling them to compete within and beyond their traditional footprints. Partnerships with fintechs will enable banks to provide clients with services and products banks could not otherwise provide in the accelerated digital atmosphere that is today’s banking world.

Nick Miller trains bankers to attract and expand relationships with businesses for more profitable partnerships. He is president of Clarity Advantage based in Concord, Mass. For additional information and articles, please visit www.clarityadvantage.com

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Keybank Fosters An Inclusive Environment For Workers With Disabilities

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or the third consecutive year, KeyBank has been recognized by the National Organization on Disability (NOD) for its exemplary employment practices for people with disabilities. As one of only four banks nationwide named a 2019 NOD Leading Disability Employer, KeyBank is considered a leader in providing people with disabilities the opportunity to achieve economic mobility and career fulfilment.

“These winning organizations understand that by harnessing the talents of people with disabilities, they reap the benefits of a more diverse and more productive workforce,” said NOD Chairman Tom Ridge, former Pennsylvania governor. “The preeminent challenge before us is to ensure that people with disabilities enjoy full opportunity for employment, enterprise and earnings, and that employers know how to put their talents to work.”

Long seen as more traditional than other business sectors, the banking industry has been slower in its efforts to adopt programs that encourage society’s growing inclusion practices. Under the leadership of Keybank’s CEO Beth E. Mooney, the institution has worked in transforming

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that landscape. Her efforts changed the culture and positioned KeyBank to become one of the most diverse and inclusive workforces in America.

Along with the non-financial benefits of hiring people with disabilities, the federal government offers tax credits to help employers capitalize on the value and talent that certain targeted groups bring to their companies. KeyBank, for example, applies for tax incentives under the Work Opportunity Tax Credit (WOTC) program offered by the IRS for hiring eligible individuals with disabilities.

All Types Of Disabilities Much of the talk about inclusion focuses on the physically disabled, while mental disabilities still hold a stigma. KeyBank is taking this problem head-on positioning themselves for 2020 to be one of the first regional banks to build momentum in this space.

In 2018 accelerated efforts by KeyBank brought about the appointment of Kim Manigault as chief diversity & inclusion officer. Her philosophy for hiring is: “Be open, be flexible and be inclusive when considering talent.”

Manigault further points out that according to the NOD, 57 million people with disabilities live in America – one in every six. “We must see people for their value, not their disability. It’s a missed opportunity for a potential employer and their clients to withhold opportunities for unique and diverse pools of talent. By hiring a limited group of people, companies are missing out on significant segments Kim Manigault of resources,” said Manigault.

Bureau of Labor Statistics show just under 20 percent of Americans with disabilities are in the labor force, compared to 65 percent of the general population. As a result, more than twothirds of people with disabilities live in poverty—double the national average. Because of these staggering statistics, KeyBank encourages voluntary self-identification in the hiring of their workforce. “Voluntary self-identification creates a platform for people to openly share characteristics and qualities about themselves,” continued Manigault.

“Through this process, we can better facilitate dialogue about diversity goals and provide the proper resources to support and find the right talent pool.” With KeyBank’s hiring rate of persons with disabilities consistently doubling from 2016 to the third quarter of 2018, selfidentification demonstrates a vital method of support for underrepresented groups at the institution.

Corporate Goals Corporate goals for diversity and inclusion are further enhanced through the banks 12 Key Business Impact and Networking Groups (KBINGs) -- African Heritage, Asian, Champions of People with Disabilities, HispanicLatinx, Jewish Cultural, Key for Lifetime Contributors, Key Legal Exchange, Key Military Network, Key Women’s Network, Key Young Professionals, Parents are Key and PRIDE – providing members with career development and supportive resources to address their individual differences and goals.

The Champions of People with Disabilities (CPD) KBING gives a voice and a platform to employees with disabilities and/or caregivers through ongoing collaboration, industry insight and best practices focusing on reasonable accommodations from recruitment to employment. Under the leadership of Michael O’Boyle, a senior vice president & procurement category manager, the CPD KBING has grown from 40 members at its inception in 2016 to just under 200 members. By telling the story about his young son, a wheelchair user due to a rare medical condition, employees and caregivers began to come forward to share their own personal journeys and common concerns.

O’Boyle said, “We’re working closely with the NOD to broaden industry insights and partnering with community organizations like The Precisionists to help companies employ 10,000 individuals with disabilities by 2025.”

The Future Simply launching a diversity and inclusion program is not enough.

For KeyBank, the sky is the limit when it comes Michael O’Boyle to their program’s direct impact on hiring and, ultimately, the bank’s productivity. Through employee development and training, grassroots initiatives and conversations to help reduce biases and increase cultural competence and acceptance, KeyBank has positioned itself as a force that ensures that all populations are well represented. “The desire to be diverse and inclusive and lift as you climb to break through ceilings and bring people along, is critical,” said Manigault.

“We’re working closely with the NOD to broaden industry insights and partnering with community organizations like to help companies employ 10,000 individuals with disabilities by 2025.”

Michael O’Boyle

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Once Considered Too Radical, Banker Retires After 50 Years of Success

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erard “Gerry” Banmiller, CEO and founder of bagpipes were the music for Citizens Bank, which was owned by New Jersey’s 1st Colonial Community Bank will Royal Bank of Scotland; “Oh Canada” was the musical theme for retire in late 2020 after 50 years in the industry.

Canadian-based TD Bank; and flamenco guitar was the background Although he hasn’t traveled for Sovereign Bank, which was Spanish-owned far in terms of mileage (from and later rebranded as Santander. Accompanied Philadelphia to Southern New by patriotic background music, Banmiller Jersey) he has traversed a continent of banking presented his bank as American owned and expertise in a half-century, and with much operated. Over the years, he has enjoyed doing success. most of the marketing for his bank. “I loved A graduate of Villanova University, Banmiller popping those balloons,” he said. began his career at Girard Bank in Philadelphia.

He is optimistic about the future of banking Founded in 1811, Girard was a principal source for today’s young people seeking a career and of government credit during the War of 1812. he occasionally teaches courses at a community Banmiller described it as “a stable bank that college where he tells students that banking is didn’t take risks unnecessarily.” Before founding a rewarding way to make a living “As a banker 1st Colonial Community in 2000 he was Regional you can help people by creating money. You can President at Hudson United Bank in Mahwah, help people buy a house that they didn’t think New Jersey (with assets of over $8 billion before that they could possibly afford. We are wealth being acquired by TD Bank in 2006) and Regional creators.” He also advises that large banks do President at Hudson United Wealth Management not provide the kind of responsiveness that Services. Weary of the impersonal nature of large Gerard “Gerry” Banmiller will be important for the future of the industry. banks, he wanted to create an organization that was responsive to customers.

“The major challenge to banking is government The shift to a more customer-oriented overregulation,” he said. “Large government and relationship has been a success. 1st Colonial Community, large banking are the twin evils that will harm any business.” headquartered in Collingswood NJ with a branch in Westville and Banmiller does not rely on social media. He believes the constant administrative offices in Cherry Hill, reported assets of over $543 communication today is often useless for most kinds of work. million in 2018. Profits provide evidence of solid growth: $5.2 “When I see presidents and senior officers walking around with million in 2018, up $1.2 million over 2017. two cellphones and their iPad it distresses me,” he said. He does Banmiller has a lot to say about how the state of banking has not use a cellphone and has never originated an email, though he evolved. “When I started, loan policies were different than today,” works with staff who do. He prefers face-to-face communication he said. “You needed a personal reference to start an account and whenever possible because he believes that the constant chatter of to borrow money. Policies were patrician. Today things are more devices saps productivity in users. cordial; we are customer-oriented rather than bank-oriented.”

With much fondness for a career that has allowed him so many The slogan on the website for his full-service bank is, “Nice rewards, the banker looks forward to retirement. What he will not People with Money.” Banmiller now sees that his style was starting miss are evening meetings of community organizations that he to take form during his days at Girard: “Even in the beginning my sees as essential for good performance of someone in his position. first supervisor told me that my ideas were ‘off center; too radical.’

He and his wife will spend some time in Playa del Carmen on An example of his unconventional approach was documented the Mexican Riviera where they have a timeshare. He is an avid in a 2008 interview in Philadelphia Business Journal. He became reader and has many interests. He also sees a decline in his the voice for radio ads that argued that many large banks were aggressiveness, a quality he feels is essential for a capable leader. presenting themselves as the bank next door but were in fact “It’s better to burn out than it is to rust, he said, quoting a line headquartered overseas. His strategy was to use background music from the countries where the banks were really based; from a Neil Young song. “I don’t want to rust.”

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T E C H N O LO GY

Four Considerations When Vetting Martech Solutions For Your Bank

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oday, there are almost as many marketing technology solutions as there are banks and credit unions.

The explosion in the number of Martech options — which totaled roughly 150 in 2011 and now exceeds 7,000 — is mostly in response to the ever-changing obstacles marketers face.

But in the financial institution world, those overwhelming numbers create their Rick Hall own challenge. The “2019 State of Content Marketing for Financial Services” report found that 52% of marketers say evaluating technology is among the most significant challenges they face.

Where Martech Solutions Come From Martech is a catch-all term to describe technology solutions built for or adapted to marketing products and services. In some form or another, all banks use marketing technology, whether it’s marketing automation solutions, business intelligence, or data analytics programs.

As ubiquitous as these digital tools are, their importance is growing exponentially. This is particularly true for community banks and credit unions, as financial institutions of all sizes seek more from their marketing spend, especially the improved ability to accurately track performance. Each needs help with: • Maintaining messaging consistency across all channels.

• Reaching the right audience.

• Generating traffic and converting viewers into new customers.

The need for technological solutions is real, but the task of selecting among them requires a strategy for identifying the right solutions for your institution as efficiently as possible. What follows is a discussion of the four considerations we’ve found useful.

1. Incorporate Other Perspectives Essentially, all banks have the same underlying drivers: justifying any investment in new marketing tools and being able to accurately track their success in contributing to financial and growth objectives.

Although the marketing area typically chooses and uses these tools, the technology area still needs to operate the solution within the bank’s current platform while meeting risk and security controls for it to be a viable option. As a result, vendor decisions need representatives from both departments at the table when meeting on Martech options.

2. Adjust Your Analytical Approach There are two conflicting realities when it comes to evaluating Martech. The first is that many bank marketers lack experience in data management, analytics, and predictive modeling. These are core capabilities that are becoming increasingly necessary in banking.

The other reality is that marketers need these capabilities to ask in-depth questions of Martech vendors. They are also expected to interpret data from the solutions being considered to ensure appropriate analysis and recommendations are made to support internal growth programs.

While working toward closing this gap between today’s needs

and knowledge, it helps to stay focused on two main points when reviewing Martech options. First, think in terms of future opportunities, not yesterday’s problems. This requires thinking three to five years out when evaluating each tool.

3. Understand the Proposed Solution Too many vendors rely on buzzwords to entice a purchase.

Instead, seek out those solution providers whose messaging is clear, is concise, and demonstrates a true sense of your institution’s need. Then, focus your attention and subsequent discussions on the use cases they provide to determine whether their solution will address a problem you face. If you are not identifying with the case studies, move on.

Where a vendor’s pitch does resonate with your situation, ask for proof of the concept, preferably using your organization’s data.

After all, to get buy-in from your executive team, you will need to build a case for why this solution is likely to produce a return on the investment.

4. Look for Evidence of a Commitment For many new tech companies, the fun part was developing the application. Seek out those firms that view establishing and maintaining long-term partnerships with their clients as just as fulfilling.

Because your return on investment will be measured over the life cycle of the solution, that solution needs to have staying power and remain relevant given rapidly changing industry conditions. Look for evidence that the vendor intends to support the technology through frequent updates and that it has its eye on continuing to meet your future needs. The provider’s development, support, and innovation curve should align with your bank’s priorities for growth and efficiency.

Before committing to any solution, you should understand how you will interface with the vendor after the solution is in place. Determine how much control you will have as users versus being dependent upon the vendor to update, customize, or create a new offering.

Too often, when these details aren’t specified upfront, bank marketers find themselves having to go back to leadership to let them know that what the bank is asking for cannot be easily supported.

While some vendors sell direct to banks, many Martech firms have a pre-existing relationship with an organization’s core provider. These vendors rely on the core providers to resell their offerings. Defaulting to your organization’s core provider for a Martech solution might seem practical, and their options are certainly worth considering. But a pre-existing relationship should not be a determining factor.

Instead, start your search by determining what you are trying to accomplish and how you will define success. By answering that question objectively and achieving consensus internally, you can address the risk of getting caught up in the latest trend or user interface instead of staying focused on how the solution can help move your bank forward. In the end, your mantra should be: When it comes to financial Martech, solutions are bought, not sold.

Rick Hall is the managing director of the banking and financial Services practice at BKM Marketing.

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Cybersecurity: The Defense Can Never Rest

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hile banks can never let down their guard, it does appear that they’re doing a good job of staying ahead of cybercriminals, according to the Office of the Comptroller of the Currency.

“Banks generally have appropriate controls for operational stability and protection of bank and customer data,” the agency said in its most recent Semiannual Risk Perspective, published in the fall of 2019. “As a result, cybersecurity-related matters trends have decreased and have remained relatively stable over recent quarters, reflecting increasing maturity of banks’ cybersecurity programs. Trends in this area have improved.”

Nevertheless, it warns, “cybersecurity remains a significant risk area for banks, with opportunities for further improvement.”

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Threat Evolving

“There is a good level of preparedness, but cyberthreats and cybersecurity are always evolving,” says Kevin Greenfield, the OCC’s deputy comptroller for operational risk. “It’s something that banks, no matter how good or how strong or how focused they are on them, there are risks. It’s very important to make sure that there is ongoing training for your employees and staff and that you are regularly testing and re-evaluating your security controls. While we see the same fundamental attack methods being used, what they look like and the different ways that the threat actors are approaching them are evolving all the time. So, everyone needs to stay on their toes and be ready to respond if there is an attack.”

As the Capital One hack last July shows, one of the most pernicious and most difficult threats to defend against is when the attack comes from inside the organization, whether it’s from a rogue employee, as in the case of Capital One, or – more often – an unsuspecting employee or vendor whose identity has been compromised.

‘Inadvertent Insider’

John Rogers, director of advisory services at Tyler Cybersecurity in Plano, Texas, calls that an “inadvertent insider,” and that “is the most common threat there is,” he says.

“The inadvertent insider is someone who either through their own actions, such as by clicking on a link or visiting a website they shouldn’t or selecting weak email passwords,” unintentionally allows a cybercriminal access to the bank’s internal databases, Rogers says. “Once they have that identity, Kevin Greenfield John Rodgers Nathaniel Gravel they have trust and credibility by the organization and a variety of attacks can occur. The criminal is going to leverage that to Rogers, who advocates strict controls on what bank employees get things they couldn’t normally get.” have – and don’t have – access to.

An even bigger challenge is monitoring what a bank’s “The number one control is, ‘Know Thyself,’” he says. external vendors are doing. As the OCC and other bank “Know the normal flow of information traffic. Have a very regulators have said, banks are responsible for the actions of clear role-access model where you can spot someone trying their vendors, whether intentional or not. to access data that they shouldn’t or don’t normally access.

“We actually dealt with that [recently] with a construction Know what you have, where it is, and who has access to it and company where one of their subcontractors’ email accounts perform regular reviews and audits of that access. Make sure was compromised,” notes Nathaniel Gravel, vice president of the access changes as an employee moves from role to role information security and information technology practice at within the organization.

GraVoc Associates in Peabody, Mass. “They sent an address “The more you limit people’s ability to traverse a network change notification to send payment to a and get to different places, the better different address, and without thinking off you are, because you’re going to be the employee from the construction putting up roadblocks that they can’t company changed the system without compromise without effort. People telling anyone. They were sending Traditional should only have access to what they checks to the fraudulent address for need and no more.” almost three months.” signature-based

Stormy Cloud

antivirus software is not cutting it anymore.

The evolution to more cloud-based and web-based applications can increase the risk of data theft, Gravel adds.

“A lot of infrastructure is moving out of the bank and into a softwareas-a-service application,” he says.

“The biggest jump we saw in 2019 is companies getting rid of their old servers and moving to Office 365. In doing so their email is now hosted in Microsoft’s cloud and it’s publicly accessible at that point. The way they need to secure that is a bit different than when it was on their own internal network.”

At the same time, he says, “we see a lot of community banks establishing a brick-and-mortar presence in new communities, and in doing so they are building them with state-of-the-art technology, which usually means they are connected to the internet. Everything from their HVAC systems to their water heaters can all be WiFi-enabled. The problem is that a lot of times they are not wired with any of the default settings being changed, including the default passwords for administration.

So sometimes the way into a bank’s internal network is through those devices.”

What can banks do?

All devices that bank employees use – whether it’s computers, laptops, tablets, whatever – “need to be secured, managed, monitored and properly configured and kept up to date with patches,” OCC’s Greenfield advises. “The malicious actor doesn’t need to break into the core system and go through all those walls of security if they’re able to plant malware on your internal network from one of those devices.

You need to look at security from an end-to end-perspective.”

“It’s as much a people issue as it is a technology issue,” says

Exfiltration Is Key

Rogers recommends installing secure email systems with exfiltration controls that monitor data leakage.

“A deep robust email monitoring system is capable of monitoring data leaving the organization and either blocking it or encrypting the data or notifying the sender or someone within the organization that data has left,” he explains.

“Make sure your email system is properly configured and that you have an appropriate level of authentication controls in place to block entry” from an outsider, adds the OCC’s Greenfield.

Gravel notes that the old ways of cybersecurity aren’t keeping up with the times.

“Traditional signature-based antivirus software is not cutting it anymore,” he says. “Studies have shown that over 50 percent of malware is scripted to what the traditional antivirus is looking for, so in effect traditional antivirus is really only blocking less than 50 percent of malware today, so that offers inadequate protection.”

“The alternative,” he advises, “is to layer on what is called Next Generation antivirus to an endpoint detection and response solution, or EDR, that looks for behavioral-based symptoms on a system to prevent some of that malicious activity from going on, the most common of which is ransomware.”

Gravel also says he sees a lot of banks investing in perimeter security to try to keep cybercriminals out, but not spending as heavily in detective and response controls to be able to respond in a timely manner when they do have a compromise.

“Because of that imbalance there is an exposure to mitigate the attack or minimize the loss,” he says.

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MID TIC ATLAN

TRY TO KEEP UP LOCAL PROFESSIONALS MAKING THEIR MARK IN MID ATLANTIC BANKING

Sidhu Named Vice Chair, COO At Customers Bank

Customers Bank, the banking subsidiary of Customers Bancorp, Inc. announced a series of senior executive promotions and recruitment of an experienced top executive as its vice chairman and chief operating officer, as it sets its sights towards creating a growing high performing bank in this rapidly evolving new environment for commercial banks.

To help execute this strategy, Customers Bancorp’s and Customers Sam Sidhu Bank’s boards have approved the additional title of Customers Bank CEO for President Richard A. Ehst and announced the recruitment of Sam Sidhu, currently CEO of Megalith Capital Management, a NYCbased private equity firm, as its vice chairman and chief operating officer, as well as head of corporate development for Customers Bancorp.

“With Dick’s 50+ years’ experience in commercial banking and Sam’s 15 years’ experience in technology, finance and real estate, as well as a very experienced and talented Management Board, we are very well positioned to become a top high performing growth company with a strong emphasis on risk management,” said Jay Sidhu, Customers Bancorp chairman and CEO. Sam Sidhu, 36, has an MBA from Harvard Business School and a B.S. from the University of Pennsylvania’s Wharton School. Prior to launching Megalith Capital Management, a real estate focused private equity firm in New York, he worked at Providence Equity Partners and Goldman Sachs for five years. He has also served on the board of Customers Bank for the past eight years and is the CEO of Megalith Financial Corp., a NYSE-listed financial technology-based special purpose acquisition company.

In addition to these appointments, Andrew Bowman has been promoted to executive vice president and chief credit officer. Bowman has been with Customers Bank for over eight years and brings over 30 years of bank and commercial finance credit experience to his new position. Late in 2018, Customers announced the appointment of Carla Leibold as the chief financial officer and Jeff Skumin as the chief accounting officer, respectively, of Customers Bancorp and Customers Bank.

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Centric Appoints McGrath EVP, Chief Credit Officer

William T. McGrath

Centric Financial Corporation, the parent company of Centric Bank, has appointed William T. McGrath as executive vice president, chief credit officer at Centric Bank, announced Patricia A. Husic, president and CEO. McGrath is responsible for supervising all credit-related areas of the company, including the policies and procedures related to underwriting and credit administration, as well as measuring and managing aggregate risk in the bank’s

loan portfolio.

A change manager, McGrath boasts a 35-year career in banking, most recently serving as senior vice president, chief credit & risk officer for DNB First, N.A., a $1.2 billion community bank. His accomplishments include creating underwriting processes for commercial loans, restructuring and hiring risk teams, overhauling credit policy, creating efficient credit processes, portfolio reporting, and establishing audit and regulatory procedures.

McGrath holds a graduate degree in banking from Stonier Graduate School of Banking, University of Delaware, Newark, DE, and a B.S. from Villanova University, Villanova, PA. Passionate about youth athletics and caring for our communities’ elderly, he has served as a board member and treasurer for West Chester Area Senior Center for the past eight years, was chairman of the Magellan Leadership Group of Radnor, and served as regional commissioner for CYO Girls Basketball in Chester County.

Community Bank Promotes Burchianti

CB Financial Services, Inc., the holding company of Community Bank in Washington, Pennsylvania, announced the promotion of Ralph Burchianti to the office of senior executive vice president, a newly created position and the second most senior officer position in the bank. As senior executive vice president, Burchianti is responsible for the daily operation of the bank. He also serves as chief credit officer of the bank and retains that title and attendant Ralph Burchianti management responsibilities following the promotion. He also serves as a director of both the company and the bank.

Woroniecki, Taylor Join Blue Foundry Bank

Blue Foundry Bank created a new kind of team with the hiring of seasoned veterans, Tom Woroniecki and Trevor A. Taylor. In their roles as VP/ regional market managers, the duo works together Tom Woroniecki and Trevor A. Taylor to manage branch sales activity in the bank’s areas of operation throughout New Jersey. Additionally, they broadly oversee branch operations including employee management and development, individual branch marketing efforts and overall community involvement.

“Tom and Trevor are a dynamic pair and their extensive knowledge and expertise have already helped drive our pursuit to think strategically, stay flexible, believe in what’s possible and then get to work making a difference in our communities and in the lives of our customers,” said Liz Miller, EVP/Chief Retail Banking Officer. “They are an extraordinary and valued addition to Blue Foundry Bank.”

Bringing years of experience from Wells Fargo and TD Bank, Woroniecki manages eight branches throughout Bergen, Essex and Morris counties. Taylor, whose banking experience includes positions at JP Morgan Chase and Affinity Federal Credit Union, is overseeing nine branch locations throughout Bergen, Essex and Passaic counties and relies on his extensive background in relationship and branch management to do so.

Beyond building the future of Blue Foundry Bank, both men can be found volunteering. Woroniecki has facilitated financial literacy courses for the Newark Public School System and volunteers with Habitat for Humanity of Bergen County while Taylor has worked with Food Bank Network of Somerset County and taught financial literacy courses for Raritan Valley Community College.

Kafafian Group Announces New Managing Director, Other Promotions

The Kafafian Group Inc., a consulting and advisory firm that focuses on community financial institutions, announced the promotion of Jill Pursell to managing director and senior leader for the firm’s process and profit improvement line of business.

Pursell is a lifelong banker, starting at the teller line and working her way up to senior management. She joined TKG in 2008 after the completion of the KNBT Bancorp, National Penn Bancshares Jill Pursell merger transaction. Both had been clients of TKG, and the breadth of her banking experience combined with her ability to work in different environments and with diverse teams made her a cultural fit with TKG. In addition to Pursell, TKG also announced three other promotions. Andrew Rietz and Kyle Kuster were both promoted to vice president. Each play critical roles in the successful execution of engagements in the strategic management, profit and process improvement, and financial advisory lines of business. Rietz has been with the firm

nine years, joining TKG out of Temple University. Kuster is a Penn State University graduate, holds an MBA from Lehigh University, and is also a CFA charter holder. Kyle has been with TKG four years, joining from a regional boutique community financial institution advisory firm.

Will Ball has been promoted to the firm’s chief technology officer. Ball had already been taking on more technology responsibilities including the building of our proprietary profitability software product, Everest, that allows community financial institutions to have the same level of sophisticated line of business and product profitability decisioning as large banks.

Bryn Mawr Trust Names Lindsay Saling SVP, Director of Retail Banking

Bryn Mawr Trust named Lindsay Saling senior vice president and director of retail banking. She focuses on the oversight of the institution’s retail delivery channels and servicing of all products and services offered to the customers banking through our retail locations throughout Pennsylvania, New Jersey, and Northern Delaware. Saling reports directly to Kevin Tylus, president of BMT’s banking division.

Lindsay Saling In addition to managing a team of regional managers and business development team members, Saling is also responsible for sales management; delivery and fulfillment of deposit, cash management and lending services through retail and electronic channels; delivery infrastructure, and more. She has more than 20 years of financial services and sales management experience with First Niagara Bank and Citizen’s Bank.

Hasley Elected to FHLBank Pittsburgh Board

Andrew (Andy) W. Hasley, president of Standard Bank, has been elected by the board of directors of the Federal Home Loan Bank of Pittsburgh (FHLBank Pittsburgh) in accordance with the rules of the Federal Housing Finance Agency to fill a vacant Pennsylvania member director position. Effective Jan. 23, 2020, Mr. Hasley will fill the unexpired term of former director James Biery, which ends Dec. 31, 2020.

Andrew W. Hasley Hasley previously served as President and CEO of Allegheny Valley Bank, prior to its merger into Standard Bank.

Hasley received his undergraduate degree and MBA from Duquesne University, and earned his CPA while working at Ernst & Whinney (now Ernst & Young). Hasley worked at FHLBank Pittsburgh before assuming a leadership role at Pennsylvania Capital Bank, where he rose to the position of president.

Hasley currently serves on the boards of the Pennsylvania Association of Community Bankers and the Pittsburgh Zoo & PPG Aquarium. He also sits on the Federal Reserve Bank of Cleveland’s Community Depository Institution Advisory Board.

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DI D YO U S EE?

Banking Mid Atlantic publishes a weekly digital newsletter that rounds up the latest news and information about, you guessed it, banking in New Jersey, Pennsylvania and Delaware. Here are a few stories from recent editions. If you would like to subscribe to, share your news to, or advertise in the Banking Mid Atlantic newsletter, contact us at info@ambizmedia.com.

YORK TRADITIONS ANNOUNCES EXPANSION

York Traditions Bank, based in York, Pennsylvania, has announced plans to open its first full-service branch in Lancaster County. The bank said the makeover will commence in the spring.

Subject to customary regulatory approvals, the 3,600-squarefoot office will be located at 1687 Oregon Pike and anticipates serving customers in the Fall of 2020. The branch will be highly visible from Route 30, easily accessible from Oregon Pike, and situated across the street from the bustling Lancaster Shopping Center. The bank signed the Oregon Pike property lease on January 24, 2020, and renovations will begin during the second quarter.

The office will include commercial, retail, and residential mortgage professionals engaged in the Lancaster community.

The bank is forming the local team to be led by a senior market executive who will report directly to President and CEO Eugene Draganosky. The retail branch will be supported by universal bankers with the expertise to serve varied customer needs, including transactions, account openings, and loan processing.

FIRE PERMANENTLY CLOSES WSFS BRANCH

A December fire has permanently shuttered a WSFS branch in Hockessin, Delaware. Bank officials cited the length needed to rehab the facility.

Delaware Business Now reports a bank spokesperson said, “Given the substantial damage, it would take about nine to 12 months to repair the site. We made the difficult decision to permanently close the bank office. Many of our associates have moved to the Lantana banking office, and the others are serving customers at nearby WSFS offices.”

Instead, WSFS will focus on upgrading the Lantana location.

It will continue to offer Saturday hours and improvements will be made to the site, including an expanded drive-thru and parking lot.

OCEANFIRST COMPLETES ACQUISITIONS OF TWO RIVER, COUNTRY BANK

Ocean First Financial Corp. has completed its acquisitions of Two River Bancorp and Country Bank Holding Company, Inc. The former operations of each of Two River and CYHC will operate as divisions of OceanFirst Bank until the integrations of their respective operating systems are completed, which are expected to occur separately during 2020. In conjunction with the full integration of each operating system, Two River and CYHC will each be rebranded as OceanFirst Bank.

OceanFirst is the largest community bank headquartered in central and southern New Jersey. With the addition of Two

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River and CYHC, OceanFirst will have assets of approximately $10.2 billion.

“With the addition of these two high performing organizations and our organic commercial lending expansion in the New York and Philadelphia metropolitan areas, OceanFirst is well positioned to continue to grow our business throughout 2020.

We look forward to delivering our exceptional banking services to the newest customers of OceanFirst Bank,” said OceanFirst Chairman and CEO, Christopher D. Maher.

Upon completion of the acquisition of Two River, the former shareholders of Two River became entitled to receive $5.375 in cash without interest and 0.6663 shares of OceanFirst common stock for each share of Two River common stock they held plus cash in lieu of any fractional shares of OceanFirst common stock. Based on the $25.54 per share closing price of OceanFirst common stock on December 31, 2019, the total transaction value for the Two River transaction was approximately $197 million (including options). Effective as of the completion of the Two River transaction, William D. Moss, the former chairman, president and CEO of Two River, was appointed to the boards of directors of OceanFirst and OceanFirst Bank.

22-YEAR-OLD LOOKING TO CHANGE BANKING

Kasai Guthrie, 22, has built himself from poverty in Newark, Delaware to the founder of a successful fintech and he isn’t planning on stopping there.

“I was trying to figure out ways to make money,” he said.

Unfortunately, there were few money making options for 10 year olds. “The minimum age to work was 14 or 15, so I couldn’t find a job, but I had this idea for this app.” When he searched for something like it, he found that such an app didn’t exist.

The idea simmered until, as a Glasgow High School student, he participated in BPA (Business Professionals of America) and DECA entrepreneurial challenges with the idea, then called Learn, Earn, Save, Buy. He came in first in both, and went to nationals. He caught the attention of Ronni Cohen, executive director of the Delaware Financial Literacy Institute, who connected him with Capital One. “Capital One loved the idea,” said Guthrie, now 22. “They gave me funding for research and development, but at that point there wasn’t a proof of concept so it was very difficult to get funding from investors. Global banking wasn’t really a big thing yet.”

WORKERS WANT TO KEEP IT CLEAN Banking Mid Atlantic, in conjunction with its sister publications Banking New York and Banking New England, polled its readers on this question: “Which of these perks would you like?”

The answer choices were:

c c c c

28%

PAID DAY OFF TO GRIEVE

26%

BOOK ALLOWANCE

13%

FREE BEER FRIDAYS

Dry cleaning services Day off to mourn a pet Free beer on Fridays A Kindle with a book allowance

It appears that our readers find free dry cleaning to be the most desirable perk their bank or credit union could offer them.

Almost one-third of our readers expressed an interest in this benefit being provided.

Coming in at second place was pet mourning. Slightly more than 28 percent of our readers would welcome a paid day off to grieve after a beloved dog or cat passes.

33% FREE DRY CLEANING

About one-in-four readers (26%) have a literary bent and would enjoy receiving a Kindle with a book allowance. Our readers mostly don’t want to mix IPAs with work.

Only 13 percent favor free beer Fridays at work.

Have an issue you would like to see addressed in a survey? Or want to subscribe to the Banking Mid Atlantic eNewsletter, contact us at editorial@ ambizmedia.com.

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