Interview: Mike Golden, Regional

Mike Golden

Regional President, Raleigh Wells Fargo

What role does the Raleigh market play in the overall Wells Fargo strategy for North Carolina?

I lead one of two regions in North Carolina, which is called the Carolina East region, spanning geographically from the Piedmont Triad to the Triangle to Coastal North Carolina. My office is based in Raleigh. We’re a major force in the company, in terms of both deposit share and customer households. In the Triangle alone, we serve 230,000 households. That has been especially critical in the last 12 months as we have served our customers while at the same time keeping our team members safe. Through a North Carolina lens, Charlotte and Raleigh are two of the Top 20 fastest-growing markets in the country. We are a technology and growth hub. We’ve seen growth rates continue, even with the pandemic. We have commanded a major market share for a number of years, ranking No.1 or No. 2 based on FDIC deposit statistics.

How has Wells Fargo been an important factor in financially supporting the business community?

The last 12 months have been the most unique of my 40-year career. First and foremost, we are proud to have kept most of our branches opened. We’ve grown deposits based on FDIC market share by $1.6 billion. Our customers trusted us to retain more deposits than they did previously. We also announced an investment in six African-American minority deposit institutions, including M&T Bank, which is headquartered here in the Triangle. That is a pledge to invest up to $50 million in our Black-owned businesses. As part of this investment, we unlocked access to a dedicated Wells Fargo relationship team that will help provide financial, technological and product development advice to them.

Another way that we funded businesses in need is through our partnership with the Raleigh Relief Fund. We are one of the original investors in that fund. Collectively, the fund and the city of Raleigh generated $1.6 million in grants for over 200 small businesses early in the pandemic, before the first PPP loan was ever made.

The Raleigh-Durham region’s corporate tax rate of 2.5% is the lowest in the country.

( ) quantum computing firm Atom Computing’s decision to use the Triangle as its growth base, armed with a recently closed $15 million funding round. The surge of AI in loan underwriting also prompted the National Community Reinvestment Coalition (NCRC) to urge federal banking regulators to exhaustively evaluate and monitor different mechanisms to protect consumers and small businesses from discrimination when lenders use artificial intelligence (AI) and machine learning (ML) to underwrite loans.

Banks have received the consumer’s message loud and clear and are investing to bolster and diversify their digital solutions aimed at customers who prefer to bank virtually. Yet, keeping pace with technological trends can spread resources thin, especially for smaller and midsized lenders such as community and regional banks, making partnerships and alliances a practical solution rather than developing the necessary tech in-house. The result is the expansion of a consolidation phase in the

industry that had already been underway well before the pandemic.

Fintech companies are also showing an increasing appetite for collaboration with community banks, to be less dependent on venture capital funds. Raleigh-based Constellation Digital, is among those, offering an open digital banking platform that allows access to a digital services marketplace to credit unions. Postponed 2020 projects with credit unions are being restarted as these lenders move closer to a new normal and address pent-up demand kindled by the limitations of legacy providers.

In another consolidation success story, Fifth Third Bank announced the broadening of its relationship with fintech leader FIS to replace its legacy deposit and trust servicing systems. FIS’ next-generation platforms will become an integral part of Fifth Third Bank’s digital transformation strategy.

Lean operations are also taking branch networks back to the drawing board, as showcased by PNC Financial Services Group Inc.’s 2020 decision to close 170 branches, including 10 North Carolina locations. For 2021, it anticipates closing an additional 120 branches.

Growth drivers Despite the pandemic, North Carolina’s economic profile is strong: GDP growth of 6.5% in 1Q21, an unemployment rate of 4.8% as of May 2021, a top corporate tax rate of 2.5%, a top individual income tax rate of 5.25% and a AAA, stable bond rating from both Moody’s and S&P.

And Raleigh-Durham’s future is definitely tech-driven. Google’s announcement to create an engineering hub focused on cloud computing that will create as much as

Stewart Patch

Triangle Regional President – Dogwood State Bank

Regarding the effects of the pandemic, we were so early in our life cycle that we didn’t have a huge portfolio of existing loans that we were worried about. We were able to pivot and look at what opportunities were presented as a result of the state of the world and how we could take the situation and turn it into a positive. Then the PPP program was rolled out and people were struggling to make sense of the program. We were getting calls from customers at larger institutions that couldn’t get traction with the PPP loans and we were able to step in and say, this is why we’re here, this is why we exist, to fill this gap in the marketplace. There are very few instances in the banking world when banks have the opportunity to differentiate themselves. This really was one of those times.

1,000 jobs at full capacity is a testament to that future. For banks, the development is expected to foster the transition to cloud-powered financial services. Furthermore, Apple picked the Triangle for a new $1 billion tech campus that will focus on artificial intelligence, machine learning and software engineering, all components in the emerging fintech revolution.

The Research Triangle is also poised to become a cybersecurity mecca. The region houses a National Security Agency (NSA) lab, centers of excellence in the discipline and 15 higher education degrees and programs that produce specialized experts to fill the ranks of the region’s banking and finance players in this regard. Big players present in the area include BitSight, LexisNexis, Petronella, WingSwept, IBM, Red Hat, XceedIT, SAS Cybersecurity and Innovative Systems Group. In May 2020, the United Nations reported that cybercrime was up 600% globally since the outset of the pandemic.

The big sectoral names in the region include Credit Suisse, Fidelity Investments and IHS Markit, but fintech startups are attracting investor attention at a notable pace. 2020’s announcements include LoanWell, a fintech startup selected for a new Google accelerator program, which granted it $715,000 from 11 investors. In 2021, insightsoftware was infused with $800 million from a single investor, catapulting its value to $4 billion, while no-code analytics platform Malartu was acquired by FORT Capital resources. The acquisition is expected to produce $1 billion in annual transaction volume.

Insurance The focus on cybersecurity and its related threats, including ransomware, is not only apparent in the banking segment but also in the insurance sector. Given

Apple chose the Triangle region for its new $1 billion technology campus.

James Sills

President & CEO – Mechanics and Farmers Bank (M&F) Bank – Raleigh

2020 was a challenging year due to the pandemic and the social unrest but our bank had one of its best years. Our total assets increased by $44 million or 16%. Going forward, you will see banks like ours and larger banks put more emphasis on digital banking platforms and improving the customer experience. There is an unbelievable shift happening in the banking industry where banks are investing more in technology than they ever had in previous years. Overall, our customers have increased their use of mobile banking, online banking and ATMs over the past 12 months.

Cybercrime is up 600% since the outset of the pandemic, according to the Research Triangle Regional Partnership

the surge in cyberattacks and fraud attempts throughout the COVID-19 pandemic, small businesses are actively on the lookout for insurance policies to protect them from these escalating threats. In 2020 alone, North Carolina’s Department of Justice processed reports for a total 1,644 data breaches. Between January and July 2021, 1,125 breaches had been reported. Raleigh-Durham International Airport’s new insurance premium for cybersecurity alone rose to close to $100,800 for 2021, compared to 2020’s $65,000 for its soon-to-expire cyberliability policy.

A key issue throughout the pandemic and still in the courts has been business interruption claims. A potentially precedent-setting case played out in RaleighDurham after Giorgio’s Hospitality & Lifestyle Group and Matt Kelly, owner of Lucky’s Delicatessen, Mateo Bar de Tapas, Mother & Sons Trattoria and Saint James Seafood, joined forces against Cincinnati Insurance