Banking New England Sept/Oct 2016

SEPTEMBER/OCTOBER 2016

INSIDE: HOW SMALL BANKS CAN LEVERAGE BLOCKCHAINS TO CHANGE THE WORLD

NEW ENGLAND

THE RESOURCE FOR NEW ENGLAND’S FINANCIAL LEADERS

The Eyes Have It Banks Lag in Embracing Biometrics

A PUB LICAT IO N O F TH E WA R RE N G R O U P

A P U B L I C AT I O N O F T H E WAR R EN G R O U P

CONTENTS

NEW ENGLAND

THE RESOURCE FOR NEW ENGLAND’S FINANCIAL LEADERS

04

06

08

AFFIRMATIVE ACTION

AFFIRMATIVE ACTION COMPLIANCE DOESN’T HAVE TO BE DIFFICULT

16

THE EYES HAVE IT

WAIT AND SEE

A Year Out From .Bank And Banks Have Yet To Migrate

CUSTOMER PORTFOLIO MANAGEMENT

Driving Customer Profitability while Lowering Attrition Risk

12 BLOCKCHAINS

20

How Small Banks Can Leverage Blockchains to Change the World

GROWTH FROM WITHIN

Never Forget: Your Customers are Your Best Prospects

22

Dealing With Harassment in the Workplace

24

INDUSTRY NEWS

26

PERSONNEL FILE

28

COMMUNITY GOOD WORKS

IS IT HARASSMENT?

TWG STAFF CEO & PUBLISHER Timothy M. Warren Jr. PRESIDENT David B. Lovins

www.thewarrengroup.com

©2016 The Warren Group Inc. All rights reserved. The Warren Group is a trademark of The Warren Group Inc. 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: The Warren Group, 280 Summer Street, Boston, MA 02210

30

IN CASE YOU MISSED IT

Interested in receiving additional copies of Banking New England?

Call 617-896-5357 or email custompubs@thewarrengroup.com

EDITORIAL EDITORIAL DIRECTOR Cassidy Murphy ASSOCIATE EDITORS Joe Kourieh and Malea Ritz EDITORIAL INTERN Beth Siegert SALES DIRECTOR OF BUSINESS MEDIA George Chateauneuf PUBLISHING GROUP SALES MANAGER Jason Long SENIOR ADVERTISING ACCOUNT MANAGERS Claire Merritt &

Michael Lydon ADVERTISING ACCOUNT MANAGER Bob Holzhacker ADVERTISING & SALES COORDINATOR Tori Blanchard ADVERTISING INTERN Mackenzie Elkow CREATIVE/MARKETING DIRECTOR OF MARKETING & CREATIVE SERVICES John Bottini MARKETING COPYWRITER Mike Breed PUBLIC RELATIONS & SOCIAL MEDIA MANAGER Jeff Smith DESIGN PRODUCTION MANAGER Scott Ellison GRAPHIC DESIGNERS Amanda Martocchio and Tom Agostino

BANKING NEW ENGLAND

3

PROTECTING VULNERABLE AFFIRMATIVE ACTION CLIENTS

Affirmative Action Compliance Doesn’t Have to Be Difficult Sarah Babinea, MHR, PHR, SHRM-CP, is the managing partner of Compass Metrics LLC, a woman-owned, disability-owned consultancy.

She is a subject matter expert in affirmative action and diversity and inclusion for communityoriented banks. For a free review of your bank’s AAP, please email sarah.babineau@ compassmetrics.com.

Sarah Babineau

BY SARAH BABINEAU

F

ew industries are subject to more regulatory oversight than financial services. And there is very little difference between large, global, commercial financial institutions and small, community-oriented banks with small HR departments, limited resources and budgets – at least in terms of affirmative action compliance. But small community banks need not use expensive applicant tracking or human resource management software to ensure compliance. Often, the same levels of data collection and reporting can be achieved using your payroll system and a combination of Excel spreadsheets or Access databases.

Here are three things to look out for:

1. Make sure your consultant knows what they are doing.

Few things will throw your efforts off faster than hiring a subject matter expert who doesn’t have the most up-to-date information about requirements, analytics or audit strategies. The world of affirmative action is changing at a dizzying pace and what was true even six months ago, may now no longer apply. So what can you do?

• Read through a recent Affirmative Action Plan (AAP).

• Do you understand everything?

• Has your consultant explained any confusing sections?

• Are there references to reports or activities you don’t have?

• Are there references to time frames that are inaccurate?

If you see a statement along the lines of “we run quarterly reports on performance and train all managers annually,” and you know you are not actually doing that, beware. While some standard language referring to typical annual obligations are okay, pages of boilerplate 4

BANKING NEW ENGLAND

language like this are not your friend. When your CEO signs that she has read the AAP and assigned responsibility for the AAP to the vice president of HR, the Office of Federal Contractor Compliance Programs (OFCCP) expects that all signatories understand the obligations and activities reported.

Bottom line: if you’re not doing the activity, or not doing it on the schedule implied in the AAP, remove or change the language.

When hiring someone, ask what sources they use to keep current on developments.

• Are they involved in an industry liaison group?

• Do they receive email updates or attend free webinars from OFCCP or law firms?

• Do they have connections with other AAP professionals?

• Do they keep you apprised of changes?

The world of affirmative action is vast and OFCCP in each region operates somewhat independently.

Knowing the regulations is a good start, but having connections that keep you up to date with audit trends will help identify any new areas that need attention. In general, the fewer surprises, the better. Make sure your consultant has multiple, reliable sources of information so they can give you as many options for compliance as possible.

2. Make sure you know which data to collect.

Writing a compliant AAP starts 12 months or more before the plan date. Much of compliance is knowing what data to collect over the year and making sure it is complete and accurate. Once the plan year has passed, it is too late to go back and review disposition codes for applicants that were not hired, reasons why employees terminated, or reasons for changes in title or compensation. This information is critical if red flags

show in any of the analytics. Once problem areas are identified, the raw data should be reviewed for nondiscriminatory reasons that could have triggered the red flags. Examples Above.

This data is especially important if an audit turns into an onsite review, which OFCCP now requires in 25 percent of all audits. Having the original documentation available to refresh everyone’s memory takes a lot of stress out of the prospect of having to explain decisions to a compliance officer.

Situation

Analysis

There were two applicants for a position with a placement goal from the prior year. The one who was believed to be most qualified got the job, even though the hire didn’t help make progress toward the goal.

It’s not enough to say that the hire was more qualified than the applicant who was not hired, especially if the applicant who was not selected would have helped make progress toward your goal. Preparing to explain the details of the decision and ensuring the same processes apply to all applicants will help uncover any problematic thinking among those responsible for hiring.

Your impact ratio analysis demonstrates potential adverse impact in terminations.

Adding a bullet to the Identification of Problems areas with the results of a deeper analysis shows diligence. Being able to say, “Of those terminations causing the indicator, x were voluntary terminations for reasons beyond the bank’s control, such as relocation,” can defuse the tension that comes with addressing an indicator.

3. Make sure your systems are easy to use and capture everything you need.

Applicant tracking and human resource management systems are great, but they can be expensive, hard to implement and challenging to use. If most of the information you need is already in your payroll system, it may not be worth the investment. Carefully designed spreadsheets and databases can accurately capture the supplementary data you need.

Fields can be structured so that job titles, names and other important information is captured in the same format every time. Fields that are required to contain data can be flagged so they can’t be skipped. This makes it easy for even the newest HR assistant to easily and accurately track data.

Without audit experience, it’s hard to know exactly which data becomes the building blocks of a compliant AAP. Having easy to use structures in place before your plan needs updating (or before OFCCP comes knocking) takes the stress and uncertainty out of the entire process.

Your consultant should feel like an expert resource to whom you can turn to make informed decisions about AAP compliance. BNE

Why partner with MassHousing?

MassHousing’s home mortgage loans are crafted to help overcome barriers to home ownership. We continually strive to create innovative products and features that solve problems for today’s homebuyer.

Chances are, there is a MassHousing Mortgage that is right for your client, allowing them to move forward with a home purchase.

Learn about our mission, products and how we support successful home ownership in Massachusetts at

www.masshousing.com

MassHousing does not lend directly to consumers and offers its loan products through MassHousing Approved Lenders. If you are not already an Approved Lender, contact one of our business development officers found at www.masshousing.com/bd.

www.masshousing.com/bd

E Q UA L H O U S I N G

O P P O RT U N I T Y

BANKING NEW ENGLAND

5

PROTECTING WAIT AND SEEVULNERABLE CLIENTS

A Year Out From .Bank And Banks Have Yet To Migrate Laura Alix is the finance reporter for The Warren Group, publisher of Banking New England. She may be reached at lalix@thewarrengroup.com.

Laura Alix

BY LAURA ALIX

T

he new .bank domain name opened for availability in June of last year, and while its security benefits were shouted from the rooftops, not a whole lot of banks moved over to the domain name – at least not yet.

“Our clients are definitely registering their names, so they’re securing their spot, so to speak. But I don’t know any of my clients that have implemented it or rolled it out,” said Gerald R. Gagne, a member of the firm Wolf & Co. Bankers have good reason to consider the .bank domain name instead of sticking with a general top-level domain, he said. The new domain name has enhanced security requirements not similarly required of general domain names, and .bank is available only to verified members of the banking community.

“The advantages to moving to a .bank domain are that it helps remove the risk of bank customers accessing a spoofed site because .bank domains can only be purchased by banks. Bank ownership is vetted during the process of obtaining the domain,” said Anneliese Gast, manager of web services and bank solutions at Fiserv.

But whether it’s for branding reasons or otherwise, few banks have actually made the leap to .bank.

Through the end of July, 2,594 banks nationwide had purchased a total of 5,253 domain names, according to Craig Schwartz, the managing director of fTLD Registry Services, a private entity established by various trade groups to operate the .bank and .insurance domain names.

“Historically, on average, banks have purchased about 2.1 domains per bank,” he said. “Some have purchased many more and it might be for the purposes of brand protection for key product names or service names. For much smaller banks, we generally see them registering one.”

But of those who have registered one or more domain names, just 170 have actually migrated over to .bank, Schwartz said.

“I don’t know if it has to do with branding. If they’ve already spent a lot of money branding a certain way, that could be it,” Gagne remarked. “But bankers are slow to move and when they do move, they tend to move all together.”

Migration Versus Marketing

In Massachusetts, the $459 million Mansfield Bank has already secured its new domain name and is planning to shift later this year, said Joseph Parisi, vice president of marketing.

6

BANKING NEW ENGLAND

“The larger reason for moving is cybersecurity and that is a major plank in our customer protection platform,” he said.

Mutual Bank in Whitman, Massachusetts also secured its .bank domain name, said Marketing Director Christine Grundy. The $460 million institution purchased a domain name in the first round of reservations and recently renewed it, she said.

But while the .bank transition is a priority for Mansfield Bank, Mutual Bank is happy enough just to have secured its spot.

“It’s a big project to transition, not made easy by the fact that the very features that make dot-bank secure also prohibit setting up a redirect from our existing dot-com site. And we haven’t felt any downside to the status quo,” Grundy said via email. “Converting is on our long-term agenda, but not a front-burner item.”

Schwartz said that’s one of the most common misperceptions about switching to the .bank domain name.

“One of those misperceptions is that the migration is difficult, that it’s time consuming, challenging and expensive, and we’ve heard from a number of banks that have said the process was far simpler than they ever would have expected and in some cases less expensive than the process of acquiring the .bank domain names themselves,” he said. “It’s not as hard as banks think, but it does take planning and the allocation of resources and coordination.”

That entails developing a coordinated plan and working closely with various departments within the bank to make sure that legal, marketing and IT are all on the same page. Banks should also make sure their core processors can support the .bank domain name.

Gast noted that Fiserv has let its customers know it can support the new domain name and said that it’s a good idea to give any vendors supporting the bank’s website as much lead time as possible.

Schwartz said he anticipates a greater movement toward .bank throughout 2017, and he wants banks to think about the new domain name as a competitive advantage. It tells the general public, in a simpler way, that the bank cares about the safety of their customers’ personal information.

“You can tell people about your servers and your firewalls, but the average person is not going to understand that level of detail,” he said. “If you can talk about what .bank means and what it provides, it’s an easier story to tell.” BNE

Expanding your bank’s capabilities.

By putting you first.

When your bank looks for a partner, you look for one that shares the same ideals as you. Your belief in community.

Your commitment to your customers. Your pledge to provide outstanding service. At Eastern Bank you’ll find all of that. We have the financial strength, the correspondent capabilities and the one-on-one attention you deserve. A team dedicated to your customers’ needs. And a bank who works tirelessly for the community. Because at Eastern Bank, you’re first.

Member FDIC

To find out how we put you first, call us at 781-598-7354.

PROTECTINGPORTFOLIO CUSTOMER VULNERABLE MANAGEMENT CLIENTS

Driving Customer Profitability while Lowering Attrition Risk

BY SCOTT MCCLYMONDS

Scott McClymonds is the founder of CEO Velocity consulting, has helped dozens of banks significantly improve profits and efficiency, grow key business units and transform employee performance. He is an expert at integrating leadership, marketing strategy and technology to develop competitive advantages.

Banking New England subscribers may reach Scott at scottm@ceovelocity.com, (479) 263-0774 or on LinkedIn at linkedin.com/in/ scottmcclymonds for a free one-hour strategic.

Scott McClymonds

8

BANKING NEW ENGLAND

M

y previous article in the last issue of this magazine introduced customer portfolio management (CPM) as a vital strategy to help you understand customer profitability, strengthen your brand and increase your profitability.

In contrast to traditional analytics, CPM offers a holistic approach to your customers, markets and individual performers that can be used for budgeting, asset-liability management and branding.

We discussed using four customer profit groups as the foundation for CPM because profitability measures the value customers bring to your bank, and four groups provides sufficient definition without overcomplicating the analysis.

In this second article we’ll use a case study to take a deeper dive into CPM by showing how community banks can cost effectively use the same tools and analytics as bigger banks to improve their financial performance and market presence.

Creating Value and Closing the Gap

Let’s begin our case study by examining new accounts and balances over the last year. Figure 1 shows the number of new accounts opened during that time. It is broken into four distinct profit groups, which we call End Zone, Red Zone, Mass Market and Lower Tier. Orange bars represent new accounts opened by pre-existing customers and green represents activity from new ones. Similarly, Figure 2 shows balances associated with the new accounts.

The charts show that End Zone customers opened 13 percent of new accounts and those accounts provided 89 percent of new balances. Reading it another way, 87 percent of our new account efforts brought in 11 percent of the new balances.

If you knew 13 percent of your new core deposit accounts created 89 percent of your new money, what would you do about it? I advise clients to more closely examine who those customers are and what is attracting them to your bank, then develop ways to find more like them. Many of the same types of customers are in your bank but have not seen or been shown the value of bringing the rest of their relationship to you. Other equally profitable prospects live in your markets and can be persuaded to bank with you through referrals from your high profit customers.

Your executives need to know these numbers well because they are the drivers of your CAMEL rating, ROA, net income and efficiency ratio. End Zone customers are driving your bank’s growth of capital, assets and income, while the other three profit groups are creating most of the expense.

The End Zone customer will need to drive your budgeting in terms of asset, liquidity and profit growth; while the other groups will drive your budgeting in terms of personnel and operations expenses. Your ALM will be closely associated with the behaviors of the End Zone group as well, so your financial team will need to closely inspect the maturities of their loans and deposits and use those to help project ALM needs into the future.

Trouble in the End Zone

Your most profitable customers, those in the End Zone group, are not equal in their profitability or behavior within your bank. The next few figures draw out those differences and show serious issues needing attention.

Figure 3 shows the most profitable sub-group of End Zone customers earn the bank about $36,000 per year, while the less profitable sub-group earns about $21,000 annually. Those are healthy numbers in any case, but certainly distinct. In most banks these customer groups are largely unknown, invisible, with no plan in place to address their needs.

Figure 4 show the most profitable sub-group, End Zone 1, has an average of seven services, which CONTINUED ON PAGE 10

Solutions Get Results Teller Tools for Money Handling Automation

Your People are Your Best and Most Under-Utilized Assets The Right Solutions Will Give Your Tellers the Tools They Need to Get Results

Self-Service Coin Centers

Currency Recyclers

Currency Dispensers

Contact a Magee Consultant Today 800-347-1414 ext. 336 · tconklin@mageecompany.com · www.magner.com

© 2016 Magner Corporation of America. All rights reserved.

Currency Counters Coin Counter/Sorters Coin Counter/Packagers

PROTECTINGPORTFOLIO CUSTOMER VULNERABLE MANAGEMENT CLIENTS

CONTINUED FROM PAGE 8

Number of Accounts

Customer Attrition Risk: Low (6+ Servies/HH) Medium (3-5 Services/HH) High (1-2 Services/HH

60,000

End Zone Rank 1*

50,000

Low 100%

48,800

End Zone Rank 2

40,000

Medium 55.5%

34,160

30,000

24,402

20,000 16,013

10,000

14,230 7,592

4,446

0 End Zone

Red Zone

Mass Market

Lower Tier

Account Balance $1,400,000,000 $1,318,023,000 is t

w Ne

ing

ing Ex

is t Ex

is t

w Ne

Lower Tier

Mass Market

ing

Red Zone

Ex

is t

ing

End Zone

$3,050,250

0

$4,005,370

$200,000,000

$11,388,000

$49,393,300

$400,000,000

Ex

$600,000,000

w

$800,000,000

$333,158,500

$1,164,910,000

$1,000,000,000

Ne

$1,200,000,000

End Zone Rank Profitability Summary- Income Per Household Measures Profits per HH Interest Income per HH Fee Income per HH $40,000 $35,000 $30,000 $25,000 $20,000

High 27.8%

$10,000 $5,000 End Zone 1

End Zone 2

End Zone 3

Services/HH by End Zone Rank

End Zone 1

End Zone 2

End Zone 3

0

1

2

3

10 BANKING NEW ENGLAND

4

5

6

7

8

Medium 50% High 50%

is fairly good. In contrast, End Zone 2 and 3 only average about three services. I often call this hidden risk, or the risk no one is aware of.

That’s because customers with fewer services are more likely to attrite, and three services is a low number for any household, let alone an End Zone 1. Putting $30,000 in annual profits at risk is a large risk, and compounding it by the almost 3,600 households in this example creates a staggering profit risk.

Your executive team should be having a meeting at this moment to determine how to mitigate this risk.

Fortunately we’re able to dive more deeply into this risk of attrition to pinpoint these trouble spots. Figure 5 shows a little over half of End Zone 2 and 3 customers have between three and five service with us, with a little less than that holding one or two services.

Since we know customer profitability in each sub-group we can quantify the financial impact of attrition, and contrast that with the associated risk.

Customers holding higher numbers of services are more likely to purchase additional ones than those with less services, so a relationship strategy geared toward End Zone 2 and 3 customers with three to five services should yield greater results.

However, customers with one or two services are more likely to attrite, and are also harder to build relationships with. Since they are both highly profitable and at high risk, we cannot ignore them and need to put our best minds to work to understand how we can create more value for them.

Fixing the End Zone Trouble

$15,000

$0

End Zone Rank 1*

Low 16.7%

Now that we’re aware of our End Zone trouble spots, we need to fix them. Our starting point is to understand who the End Zone 2 and 3 customers are. From there we can use our insights to put together a corrective action plan. With the approval of the executive team and board, we will operationalize the best ideas through a strategy, defined goals and metrics, and empowering our employees assigned to these customers.

Congratulations. You now know more about CPM than almost all of your peers. This brief case study has shown the benefits of utilizing CPM, and the ramifications of ignoring it. Although we focused on End Zone customers, we could have just as easily created the same exercise for Lower Tier customers.

Far from the typical analytics or MCIF system sitting in a corner or operated by a junior person, CPM is a strategic function that spreads customer knowledge throughout your bank and lets you focus on key areas of performance.

As we have seen, CPM goes beyond marketing into finance, training, sales, operations and deep into the values of your customers. Integrating it with your bank’s core values, strategy and operations will strengthen the benefits you can provide your customers and community. BNE

With financial service pressures on the rise, gross profits diminishing, government regulations changing, and technology advancing rapidly, the demands on financial services are at an all time high. As each day passes, it becomes more difficult for you to stay on top of the day­to­day servicing of your clients. Therefore, it is imperative that you not only have strong IT management in place, but also have established and implemented effective internal controls and operational processes to avoid misappropriation of assets, avoid fraudulent financial reporting, and reduce the risk of control deficiencies.

IT Vulnerability Assessments Physical Security Evaluation Penetration Testing Wi-Fi Vulnerability Assessment Confidential Data Review Backup Infrastructure Evaluation Firewall Testing End User Education (Social Engineering/Phishing Exercises) SOX404 Testing FFIEC Cyber Security Assessment Service Organization Control (SOC) Reports NIST Cybersecurity Framework Evaluations

Audit. Security. Assurance. www.ocd-tech.com/bankmag

PROTECTING VULNERABLE CLIENTS BLOCKCHAINS

How Small Banks Can Leverage Blockchains to Change the World

Rik Willard is founder and managing director of Manhattan-based Agentic Group.

Rik Willard

12 BANKING NEW ENGLAND

BY RIK WILLARD

T

he concept of changing consumers’ fundamental relationship with finance and growing new ways of financial inclusion in the 21st century is at the core of what we do at Agentic Group. We work on this issue daily and, like all technological breakthroughs before it, blockchains open entirely new fields of inquiry and possibilities.

Primary among these new thought lines is banking. And primary in the discussion of banking is the gradual decline of local and community banks at a time when they are most needed.

On one end you have big banks which, after initial skepticism, have come to see blockchains as a way to lower costs and increase market efficiencies.

Whether these savings will also apply to their customers is another story that only time will tell.

On the other end, we see the steady decline of small banks, and with that decline, the dwindling of services specific to the needs of a community or region. You might even refer to this phenomenon as the “Rise of the McBanks” or “Big Box Banking.” We all know that both of these can destroy smaller local community businesses and the same is happening in banking.

The reduction in prominence of small banks is becoming public knowledge. According to William Keeton, senior economist in the Economic Research Department of the Federal Reserve Bank of Kansas City, “…community banks account for a much smaller share of total banking activity than they did 20 years ago, but they still play a key role serving certain types of communities and providing certain types of banking services.”

Since the 2008-2009 financial crisis, U.S. banking assets and deposits have continued a long trend of consolidation in a handful of large banks. The number of small banks has declined 28 percent, from 8,263 in Q1 2000 to 5,961 in Q4 2014. Simultaneously, the ranks of large banks have increased over 32 percent, from 76 in Q1 2000 to 101 in Q4 2014.

Tellingly, between 2010 and July of 2015, only three banks opened in the U.S. Small banks are essential to both local economies and entrepreneurship as well as homegrown innovation, and will become more – not less – important as jobs generally shift to robotics, CONTINUED ON PAGE 14

Information Security The loss or compromise of sensitive data can have a devastating effect on your institution’s operation and reputation. Our Information Security Practice was built to help you identify and mitigate risks to your company’s data and infrastructure.

Services Risk Management & Compliance Risk Assessment Digital Forensics & Incident Response Disaster Recovery

IT Assurance

Penetration Testing Vulnerability Assessment Social Engineering

IT Audit

Compliance Gap Analysis IT General Controls

One Company, Many Solutions Business Solutions

Information Technology

(978)-538-9055 | 81 Main Street | Peabody, MA | gravoc.com

Information Security

Media Production

BLOCKCHAINS

CONTINUED FROM PAGE 12

automation and artificial intelligence as Americans are forced to be more creative in uncovering new business models that support community and regional economic goals.

Blockchains provide the perfect ecosystem to strengthen small banks and stem the tide of declining local bank infrastructure through a federated system of small banks that create the “feel” of a big-bank by data sharing, standardized lending practices, and importantly, risk-mitigation, effectively becoming active nodes on a blockchained network.

Big banks, through advice and consulting through R3CEV, DAH and others, focus primarily on important issues such as AML/ KYC, trading and anti-front running. Smaller banks are challenged to provide the same levels of professional services while retaining a distinctly local touch.

A network of small banks connected to blockchains, embedded smart contracts and a permissioned environment can: • Share AML/KYC data across the nation without compromising customer privacy.

• Mitigate overall risk through shared lending and financing (bundled microlending and microfinance initiatives).

• Provide some needed relief from DoddFrank regulations, without destroying the very real virtues of the legislation.

• Keep fees at local levels while performing much of the same functions as big banks.

• Conserve personalized (human) customer service.

• Increase instances and efficiencies of local peer-to-peer payments.

• Maintain and increase overall lending flexibility due to localized KYC spread across the network through a permissioned ecosystem.

• Deepen their list of financial services through federated aggregation.

A federation of small banks connected nationally via a blockchained, permissioned network also allows for innovation at a local level that can enhance the network level.

Technology breakthroughs create new thought modalities. Once local network innovation is unleashed in one area, it can quickly spread outward and be adopted by some, or all, of the networked nodes. This could fast-track innovation on a national level to the benefit of local and regional banks and their customers.

Many Americans have deep-rooted concerns about the current state of banking, which in many cases now seems to favor only “too-big-to-fail” financial players. This is one facet of our system that needs to be addressed sooner rather than later if we are to conquer the challenges of this new century.

A distributed system of smaller banks – with a bit of Central Bank reform – could hedge against the type of systemic failure we experienced less than a decade ago.

In essence, small, local and regional banks are as essential to keeping America truly great on a domestic level, as the big players are on an international level. In my mind, this is not an either/or proposition, but one where both systems can live in parallel, serving the common good on every level. BNE

DRIVE REVENUE BUILD LOYALTY LOCAL SHOP

PROMOTE COMMUNITY

Building strong communities, one point at a time™ Buzz Points® is a rewards and marketing platform that is proven to have real impact on your bottom line. A commissioned study conducted by Forrester Consulting™ on behalf of Buzz Points examined the potential return on investment that community banks may realize by utilizing the Buzz Points program. The study concluded that Buzz Points partners realize 139% ROI over a 3 year period.

14 BANKING NEW ENGLAND

THE SECRET IS OUT!

Today’s banks are searching everywhere for a technology partner that does business the same way they do—a commitment to innovation and a focus on service. Well, look no further than CSI. Our innovative solutions and customer-centric approach are the secret combination you’ve been waiting for.

csiweb.com/Secret

Core Processing • Managed Services • Regulatory Compliance • Digital Banking • Electronic & Print • Payments Processing Treasury Management BANKING• NEW ENGLAND 15

BANK BIOMETRICS

the

Eyes Have It 16 BANKING NEW ENGLAND

Banks Lag in Embracing Biometrics

BY STEVE VIUKER

M

any years ago, in the days of catchy bank slogans, Chemical Bank’s was, “When Your Needs Are Financial, Your Reaction Is Chemical.” With an “eye” to the future, that slogan is once again relevant.

However, the “chemical” is now biometric technology, referring to the collection and use of biological data and behavioral characteristics.

These next-generation identification controls are being used to combat fraud and make transactions more secure.

“I have mixed opinions about biometrics,” said Ben Goodman, founder of 4A Security & Compliance. “First, I find it remarkable that most banks allow consumers access to their accounts with a four-digit PIN that doesn’t expire, and in most cases hasn’t been changed in years. The hacks of the global SWIFT system show that banks stand to lose far more money in a single attack from vulnerabilities caused by their own poor security practices, than from lots of fraudulent account takeovers.”

Goodman notes that “when your credit card is stolen, you can call the bank and they’ll send you a new one. When your password is compromised, you can change it instantly. When your medical record is stolen, there’s nothing you can do about changing that. Same problem with biometrics in cybersecurity – you can’t just reissue your

fingerprints if some bad guy finds a way to steal them.”

The technology is already a hit with certain segments of the population.

Baby Boomers Janice Chartoff and her partner, Steve Marshall of Herndon, Virginia are both users of the new technology. Chartoff uses the scan technology to access accounts at four banks: Citibank, Barclays, PNC and SunTrust.

“I always use the scans because I’m old and can’t remember passwords,” she explained. (She is 56.) Said the even older Marshall, “It’s much easier than typing on the tiny iPhone keyboard, and I don’t have to change passwords.” He uses it on his SunTrust account and says he’ll use it every time a website offers the option.

Some of the nation’s largest banks, acknowledging that traditional passwords are either too cumbersome or no longer secure, are increasingly using fingerprints, facial scans and other types of biometrics to safeguard accounts.

According to a recent New York Times article, millions of customers routinely use fingerprints to log into their bank accounts through their mobile phones. This feature is enabling a large CONTINUED ON PAGE 18

BANKING NEW ENGLAND

17

PROTECTING BANK BIOMETRICS VULNERABLE CLIENTSCONTINUED FROM PAGE 17

percentage of American banking customers to verify their identities with biometrics.

Bank Banks Embrace Technology

Other uses of biometrics are also coming online. Citigroup can verify 800,000 of its credit card customers by their voices. USAA, which provides insurance and banking services to members of the military and their families, identifies some of its customers through their facial contours.

The Times reports many models of the iPhone have touch pads that can scan fingerprints. The cameras and microphones on many mobile devices are so powerful that they can record the minute details needed to create a biometric ID. The smartphones also provide an extra layer of security: Many biometric features will only work when used on the specific phone that belongs to the bank account holder. With some voice authentication systems, banks use certain prompts to prove it is a living customer and not a recording.

Many eye scans require customers to blink or move their eyes to prevent a thief from using a photo to gain access.

Wells Fargo has been working with EyeVerify, a startup in Kansas City, Missouri, to develop its eye scan feature, which is being tested with a small group of corporate customers. The technology creates

Fintech Needs Regulation

BY STEVE VIUKER

Say the word regulation to someone in financial services and the cringe factor is immediate – it brings to mind reams of rules, including Dodd-Frank. Indeed, Donald Trump has proposed gutting much of the Dodd-Frank Act, but bringing back Glass-Steagall.

Regulatory oversight of fintech startups is tightening, according to a report from PwC. The report noted that 86 percent of financial services CEOs are worried about the impact of being too heavily regulated. However, Stephen Sheinbaum, founder of Bizfi, is an advocate of regulation. Sheinbaum said that fintech is a fairly young industry and should have transparency. He also points out the difference between firms that lend to business and those to consumers and how vastly different they are, as are their governing rules and regulations. Sheinbaum also sees potential for more cooperation between banks and fintech firms as banks seek a new lending client base.

But there is regulatory confusion. For customers, a loan is a loan and a payment is a payment. As Slate reported, customers of the peerto-peer payment company Venmo have found themselves subject to lapses in data security and transparency that a bank regulator would never allow.

The Treasury Department has published research and recommendations regarding marketplace lending. The Consumer Financial Protection Bureau has discussed business practices with fintech companies, including companies’ origination fees. The Federal Trade Commission is seeking input with consumer advocates and law enforcement to weigh fintech’s implications for consumers. Said SoFi general counsel Rob Lavet, “Regulatory agencies want to ensure that

18 BANKING NEW ENGLAND

a map of the veins in the whites of an eye. To log into an account, a customer taps open a Wells Fargo app on a smartphone. When prompted, the customer’s eyes are lined up with a pair of yellow circles on the phone screen. If they match, the customer gains instant access to the account and can start moving money or conducting other transactions. For now, Wells Fargo is offering eye scans only to select corporate customers, for whom the stakes are arguably higher because there is potentially so much money involved.

Bank of America has embraced fingerprints. There are limits on how far an average retail customer can proceed through the banking process without a password. JPMorgan Chase customers can gain access to their bank accounts with their fingerprints, but have to use a traditional password to transfer money. It takes only about 40 seconds to capture enough information about a customer’s vocal patterns to create a voice imprint that can be used as a form of identification. Once a print is established, it can reduce the time that customers spend identifying themselves to a call center representative.

“The future will likely see a more widespread embrace of biometrics in authentication, for better or worse,” said Goodman.

“Personally, I’ll deal with the inconvenience of having a bank card reissued, rather than use my fingerprint to pay for dinner.” BNE

consumers receive all required disclosures and that the product will not harm consumers.”

Adding to the mix is the fact that investor interest in fintech companies looks to have stagnated. After hitting an all-time high last year, the first quarter of investing in the space shows a 41 percent decline compared to the first quarter of 2015, the PwC report noted.

As fintech companies mature, some have taken to adding exregulators in senior roles, CNBC reported. Former FDIC chair Sheila Bair joined lender Avant’s board of directors. Last year, lender SoFi brought former Securities and Exchange Commission chairman Arthur Levitt on as an advisor. Startups are looking to bolster credibility with Beltway veterans, at a time when regulators are seeking to address a gap in regulation between large, traditional financial institutions and startups.

American Banker magazine reports some banks have created innovation labs to develop new apps and technologies. And it’s not just big banks – Eastern Bank, a nearly 200-year-old, $9.5 billionasset mutual institution in Boston, has its own lab to incubate promising new solutions and to partner with fintech companies, for example.

Rob Nichols, president and CEO of the American Bankers Association, has said that banks are eager to work with fintech providers. He explains that some banks license person-to-person payment platforms. Other banks refer borrowers to online marketplace lenders, collaborate in originating loans or purchase completed loans.

Nichols concludes that the two industries aren’t interested in mutual destruction but are looking for regulatory certainty. 

PARTNERING WITH BANKS TO HELP MORE CUSTOMERS. WAY TO GROW.

MassDevelopment’s financing expertise has been invaluable for banks across Massachusetts.

We offer solutions you won’t find anywhere else. Our programs include bond financing, loans and guarantees, tax credits and access to grant funding. And with that comes the knowledge to help you figure out the best option for your customers. For more information, call 800.445.8030 or visit MassDevelopment.com.

GROWTH FROM WITHIN

Never Forget: Your Customers are Your Best Prospects

BY MARY BONACCIO

Mary Bonaccio is director of client services for The Verdi Group, a marketing firm with expertise in the financial sector. The Verdi Group’s Needs to Leads program has been implemented and tested over the past 25 years not just for the banking industry, but also for many other organizations large and small, including B2B and B2C. Email: marybonaccio@ theverdigroup.com.

Mary Bonaccio

20 BANKING NEW ENGLAND

T

his is one of the principle axioms of selling, and it applies across all industries, both business-tobusiness and consumer. But it’s especially true for banking, and there’s a good reason for that.

It’s because bank customers are always changing.

If you have a 20-something student customer who opened a college savings account for $5,000 and a no-minimum balance checking account to keep college money and summer job money safe, you know one extremely important fact about this person: He or she won’t always be a 20-something. In 10 years or less, your 20-something checking/savings customer will get married (and become a joint account). He or she will buy a house (and become a mortgage customer), and have a baby (and open a college savings account).

In 20 years or less that same customer will change jobs and, since he’s a Millennial, probably a few times. And you will open an IRA for him and his spouse. And you will manage his 401k rollover.

And you will help with retirement planning. And you will, if you’re on your game, make a referral so he opens an investment account. And the time may come when your customer – that original relatively low-value college kid with his low-balance accounts – will become your best customer, giving you the opportunity to earn substantial revenue from the spreads on his loan accounts, and fees for his

retirement and investment accounts – even including fees for estate planning and wealth transfer.

Every customer has a larger customer in his future – waiting for you to come along and unlock the door. But what will it take to do that?

The timing is important. You must be his bank when he is ready for more services. You must have built the trust required for this precious customer to realize you can help. And you must ask for the business at the right time.

So how do you know it’s time to ask for more business? There are a number of ways to accomplish this, but one way is to implement a semiannual or annual customer needs survey to open up this dialogue.

The customer needs survey should combine the elements of a carefully crafted research instrument with an incentive to participate and an invitation to the customer to self-assess his financial picture and his lifestyle changes that can drive the need for additional financial services. Banks that have used this type of program over the course of the past five years report an average of 100 customer responses per branch with each survey execution, with needs ranging from specific product purchase plans to the more general (and often more lucrative) opportunities arising from a customer’s life event – change in marital status, new job, selling or buying a home,

LIFE STAGE

CUSTOMER NEEDS No-minuimum checking, savings account, credit card

THE THINK TANK

PRESENTED BY

Student

Joint account, mortgage Marriage

Family

College savings account, home equity line/loan

Do you have the next big idea, but you’re not sure how to put it into action?

Great ideas are only as strong as the foundation they’re built upon. The Warren Group partners with a variety of clients and companies to develop new real estate and finance products using our cutting-edge data, professional network, and resources. So, if you’re an ambitious entrepreneur or an industry innovator we can help you take your vision and turn it into a reality – Give us a call today.

IRA, 401(k), retirement planning

For more information contact David Lovins, President of The Warren Group, at 617-896-5348 or email dlovins@thewarrengroup.com.

Investments & Retirement Every customer has a larger customer in his future waiting for you to come along and open the door.

caring for older parents, saving for college or retirement, or estate planning.

“Our experience tells us that customer needs arise when a significant emotional event takes place,” said Jack Hubbard, CEO at St. Meyer and Hubbard. When a bank coaches its staff on how to capitalize on customer life events, many more sales opportunities arise.

Bankers ask better questions and needs-based cross solving happens, rather than productbased cross selling. When a banker coaches to needs-based selling, the learning tends to stay with the banker and the customer feels more confident about the conversation. The customer experience improves, the banker feels better about not being “salesy,” and the bank wins because the process is sustainable.”

The execution of a customer needs survey, bolstered by effective sales training, has been a winning approach for First County Bank in Stamford.

“A needs survey approach has consistently worked for us as a means of customer engagement, and has become a steady component of our marketing plan,” said Karen Kelly, chief marketing officer at First County Bank. “It is a key contributor to the achievement of our annual scorecard metrics.” BNE

Free money.

First-come, first served.

Really.

For a limited time, we’re offering members zero-percent Classic Advances to create or preserve jobs in their communities.

Our new program, Jobs for New England, will award up to $5 million in interest-rate subsidies every year through 2018. A maximum of $250,000 in subsidy is available per member each year. At current rates, $250,000 can leverage up to $30 million in one-year advances.

To find out more about Jobs for New England, contact Fatima Razzaq at 617-425-9564, or fatima.razzaq@fhlbboston.com.

But don’t delay. These funds won’t last forever.

See what your cooperative can do for you!

FHLBBoston Federal Home Loan Bank of Boston • 800 Boylston Street Boston, MA 02199 • www.fhlbboston.com

BANKING NEW ENGLAND

21

IS IT HARASSMENT?

Dealing With Harassment in the Workplace Employers Must Be Staunch in Defense Against Unwelcome Behavior

BY HELENE HORN FIGMAN

A member of the Massachusetts Bar for over 30 years, Helene Horn Figman is an employment law attorney who represents businesses in all types of employment law compliance and discrimination/harassment matters. She may be reached at hfigman@figmanlaw.com.

Helene Horn Figman

22 BANKING NEW ENGLAND

W

orkplace harassment is unfortunately a prevalent problem, and the financial industry is no exception. Statistics from the Equal Employment Opportunity Commission (2015) show workplace harassment is alleged in approximately 30 percent of all charges filed with the agency.

Harassment has a serious impact on both employees and employers. Employees suffering from harassment may become physically ill or feel pushed out of the workplace. Effects of harassment include lowered morale and productivity, unfavorable employee relations and high employee turnover.

For many, the term “harassment” is associated with sexual conduct. Sexual harassment may take the form of unwelcome sexual advances, requests for sexual favors and other verbal or physical harassment of a sexual nature, but harassment is not limited to sexual conduct. It also encompasses unwelcome conduct based on “protected categories.” On a federal level, such categories include, but are not limited to: race, color, religion, national origin, gender, age, disability and genetic information. Certain states additionally prohibit discrimination and harassment due to sexual orientation, gender identity and military status.

Taking preventative measures to avoid harassment from occurring is far more desirable than having to fix the problem after the fact. Employers must encourage employees, through policies and training, to report harassment and discrimination. Policies should be clear as to whom an employee can go to when

reporting harassment. An alternate person should also be listed, to ensure the employee is comfortable approaching someone.

Sometimes an employee will tell his or her supervisor or human resources about harassment and then ask that no action be taken. The caveat is, “I just wanted to let you know; please do not do anything.”

An employer must inform the employee that such secrecy is not possible. While the employee should be told that the matter will be investigated in a professional manner and as confidentially as possible, the company cannot promise complete confidentiality.

Despite the employee’s protestations, the employer’s failure to act would be tantamount to ignoring or condoning harassment. Further, this employee might just be one of many who are subject to harassment.

Recognizing harassment is no easy task. Why? Because employees often look at whether they “intended” to offend, discriminate or harass their coworkers. Have we treated our coworker the way we would want to be treated? Good intentions or making assumptions as to how others want to be treated, however, is not the standard under legal analysis. Instead, we must look at the recipients. Have we treated people the way they wish to be treated?

Consider these types of statements: • “I really like your perfume.”

• “Gee, your hair smells great.”

• “You look hot today.”

• “You know what people say about ‘those’ types of shoes …”

Whether these statements constitute harassment will depend upon many factors including, but not limited to, the context, the tone, whether the statements were isolated or pervasive, and the reaction of the recipient. On its own, a compliment about one’s perfume may not rise to the level of harassment, but there could be instances where, as one of many comments in total, it creates a hostile environment. The other three statements could definitely be problematic.

Employees that share too much information about personal sexual conduct can also create a potential sense of harassment.

Social media has made the anti-harassment arena more complex for employers to navigate.

An increase in messages posted to social media has resulted in an increase in complaints by employees. Addressing employee use of social media is challenging and involves a delicate balance of prohibiting discriminating, threatening and vulgar comments while not interfering with the employee’s protected rights under the National Labor Relations Act. Implementing a policy regarding social media is critical to address this new area of risk.

Policies against sexual harassment are important in making your employees aware of the parameters of their conduct and comments at the workplace. Publication and annual presentation of the policies is advisable and even required in some states. While it is not mandatory, state and federal agencies encourage employers to conduct education and training programs on sexual harassment for all employees on a regular basis. Employers are further advised to conduct additional training for supervisory and managerial employees, which should address their specific responsibilities as well as steps that management employees should take to ensure immediate and appropriate action in addressing harassment complaints. This is significant because employers are liable for the conduct of those persons that they place in supervisory positions.

In order to avoid or diminish liability, appropriate detailed training should be conducted to show that the employer took reasonable care to prevent sexual harassment and discrimination in the workplace. Insufficient or poor training with improper or inappropriate information will not support an employer’s good faith efforts to prevent harassment or offer a reasonable defense.

Understanding harassment, issuing clear policies and conducting training are important risk management tools for all employers in banking and financial institutions. BNE

Improve Performance CustomerLab® Identifies product opportunity, target segment and geographic focus NextProductLab™ New Launches multi-platform cross-sales StaffingLab® Assesses productivity and identifies financial impact MarketLab® Evaluates total demand and competitive landscape BranchLab® Defines demand, penetration and financial impact

National Marketing Award Winner

LocationLab® Defines means of market entry ProfitLab® Defines product profitability to prioritize business interests PerceptionLab® Evaluates Brand Performance PlanningLab® Positions your brand for enduring strategic success

603.424.5664 • www.longgrouponline.com 22 Greeley Street • Suite 2 Medallion Center • Merrimack, NH 03054

The best things in life are free.

Especially money.

We’re offering members zero-percent Classic Advances, on a first-come, first-served basis, to create or preserve jobs in their communities.

Our new program, Jobs for New England, will award up to $5 million in interest-rate subsidies every year through 2018. A maximum of $250,000 in subsidy is available per member each year. At current rates, $250,000 can leverage up to $30 million in one-year advances.

To find out more about Jobs for New England, contact Fatima Razzaq at 617-425-9564, or fatima.razzaq@fhlbboston.com.

But don’t delay. These funds won’t last forever.

See what your cooperative can do for you!

FHLBBoston Federal Home Loan Bank of Boston • 800 Boylston Street Boston, MA 02199 • www.fhlbboston.com

BANKING NEW ENGLAND

23

PROTECTING INDUSTRY NEWS VULNERABLE CLIENTS

WalletHub: US Credit Card Debt To Top $1T By Year End

Finally, the personal finance site noted that last year saw a record increase in credit card debt, of $71 billion, and last quarter saw a record-low first-quarter pay down of $27.5 billion.

WalletHub also recently ranked several major credit card issuers by transparency. The site named Capital One, Bank of America, U.S. Bank, State Employees Credit Union, Boeing Employees Credit Union, Pentagon Federal Credit Union and Navy Federal Credit Union as having the clearest overall credit card applications. It named Wells Fargo and San Diego County Credit Union as having the least clear credit card applications.

First Niagara Transitions Into KeyBank

American consumers racked up $34.4 billion in credit card debt during the second quarter, representing the largest second-quarter accumulation since at least 1986, and are on track to rack up $1 trillion by the year’s end, according to the personal finance website WalletHub. In its 2016 Credit Card Debt Study, the personal finance site called the figures “serious cause for concern” and drew comparisons between this year’s second quarter and the same period in 2007, when Americans accumulated $31.9 billion in credit card debt. Year-to-date, Americans accumulated $912 billion in credit card debt, while by this time in 2007, they had accumulated $898 billion.

In the second quarter this year, the charge-off rate stood at 3.13 percent, compared with 3.85 percent in the second quarter of 2007.

Buffalo, New York-based First Niagara branches recently received new signs, as the bank transitioned its clients into KeyBank clients.

As part of the merger, 30 branches in the Albany area will close, with the first closures to start Oct. 7 and run through 2017.

According to the Albany Business Review, several banks, including Pioneer Bank, Kinderhook Bank and Saratoga National Bank & Trust Co. have expressed interest in acquiring the branches.

The merger adds 300 branches to Key’s network in New York, Pennsylvania, Connecticut and Massachusetts, as well as $29 billion in deposits and total assets of $40 billion to Key. The acquisition makes KeyCorp the 13th largest bank in the country.

KeyCorp has said it is limiting job cuts to 250 throughout the state, though it is not clear how many jobs will be lost in Albany. As of July, the two banks employed more than 1,200 people in the Albany area with about 800 at KeyCorp and 400 at First Niagara.

Bringing Your Commercial Portfolio Risk Management Efforts Full Circle.

LOAN REVIEW PROGRAMS

LOAN LOSS RESERVE METHODOLOGY

LOAN PORTFOLIO STRESS TESTING

CEIS REVIEW CONSULTING

• General Loan Review • Methodology Validation • Portfolio Acquisition Review (Due Diligence) • Methodology Refinement • Leveraged Loan Review/Structured Finance Review • Bottom Up Loan Level Approach • Top Down Capital Adequacy Assessment

CONTACT US NOW TO LEARN MORE!

888-967-7380 // www.CEISReview.com 24 BANKING NEW ENGLAND

• Credit Risk Process Review • Loan Policy Maintenance

CFPB Fines Wells Fargo $100M Over Phony Account Openings The Consumer Financial Protection Bureau (CFPB) announced Thursday that it had fined Wells Fargo $100 million over charges that thousands of its employees opened up secret accounts in customers’ names to boost sales numbers.

“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” CFPB Director Richard Cordray said in a statement. “Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed. Today’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences.”

The bureau said that employees aimed to meet sales targets under compensation programs that rewarded them for encouraging customers to enroll in deposit accounts, credit and debit cards, and online banking.

Bank employees temporarily funded new accounts by transferring funds from customers’ existing accounts, a practice which dates back at least five years, the regulator said. The CFPB estimated the practice may have resulted in as many as 1.5 million deposit accounts and 565,000 credit cards that might not have been authorized by customers. Additionally, employees sometimes created phony email addresses to enroll customers in online banking, the bureau said.

In a statement, the bureau said that while compensation programs like the one described here are common and accepted, Wells Fargo “failed to monitor the implementation of these programs with adequate care.”

In addition to the $100 million paid to the CFPB’s Civil Penalty Fund, Wells Fargo was required to refund all the assorted fees associated with the unauthorized accounts, estimated to be at least $2.5 million.

The bank also must hire an independent consultant to review and potentially overhaul its procedures. The will also pay $35 million to the Office of the Comptroller of the Currency and $50 million to the city and county of Los Angeles. BNE

There’s no such thing as a free lunch.

But money, that’s a different story.

We’re offering members zero-percent Classic Advances, on a first-come, first-served basis, to create or preserve jobs in their communities.

Our new program, Jobs for New England, will award up to $5 million in interest-rate subsidies every year through 2018. A maximum of $250,000 in subsidy is available per member each year. At current rates, $250,000 can leverage up to $30 million in one-year advances.

To find out more about Jobs for New England, contact Fatima Razzaq at 617-425-9564, or fatima.razzaq@fhlbboston.com.

But don’t delay. Zero-percent funds won’t last forever.

See what your cooperative can do for you!

FHLBBoston Federal Home Loan Bank of Boston • 800 Boylston Street Boston, MA 02199 • www.fhlbboston.com

BANKING NEW ENGLAND

25

PROTECTINGFILE VULNERABLE CLIENTS PERSONNEL

Career achievers in banks across New England are constantly on the move, with their professional journeys reflecting a combination of mobility and longstanding service. In this space, we acknowledge them, and welcome readers to submit news of their own banks’ efforts and endeavors to Editorial Director Cassidy Murphy at cmurphy@thewarrengroup.com.

Featured Banks • BankNewport • Bay State Savings Bank • Blue Hills Bank • East Boston Savings Bank • Kennebunk Savings • Meredith Village Savings Bank • Meridian Bancorp Inc. • Merrimack County Savings Bank • MillRiver Wealth Management • Webster Five Cents Savings Bank

26 BANKING NEW ENGLAND

Appointments and Elections BankNewport

Dedham Institution for Savings

BankNewport recently appointed Maria T. Botelho to vice president and commercial loan officer.

She will be responsible for developing, building and managing commercial lending relationships throughout Maria T. Botelho Rhode Island and southeast Massachusetts. Botelho most recently worked as vice president and small business area manager at Santander Bank, N.A. The bank also appointed Joseph J. Arver to vice president and senior financial analyst. He will be responsible for asset liability management, the organization’s annual operating budget, funds transfer pricing, investment Joseph J. Arver reporting and various other analytical functions. Arver comes from State Street Financial in Boston, where he worked as assistant vice president and senior financial analyst.

Jeri A. Martins was also appointed to vice president and mortgage loan originator.

She will be responsible for originating residential mortgage loans, construction loans and refinancing in the Charlestown, Narragansett, Jeri A. Martins South Kingstown and Westerly markets. With over 14 years of mortgage origination experience, Martins comes to BankNewport from Member Advantage Mortgage – UMASS Five College Credit Union in Northampton, Massachusetts, where she served as a senior mortgage loan officer.

The Dedham Institution for Savings appointed Brendan Minich as a loan office at a recent meeting of the board of investments. Brendan has eight years of experience within the industry; having most recently held a position at Mansfield Bank Brendan Minich as mortgage loan originator.

The bank also appointed Melissa DaCosta Hockhousen as vice president of commercial real estate. Melissa has worked with Radius Bank, Webster Bank, Rockland Trust Company and several others. Most Melissa Hockhousen recently, she held a position as vice president and senior relationship manager at Radius Bank.

Bay State Savings Bank

Meridian Bancorp Inc.

Bay State Savings Bank announced recently that Maria Heskes-Allard has been named senior vice president and senior commercial lender at its Worcester, Massachusetts location. Heskes-Allard has over 25 years of experience as a Maria Heskes-Allard commercial lender, most recently as senior vice president of Clinton Savings Bank.

Meridian Bancorp Inc. recently announced Russell Chin and Cynthia Carney have been appointed to its board of directors. Chin is the principal of Chin Law Firm and has practiced law in Massachusetts since 1981. He has experience representing various types of clients. Carney has been the principal and broker of Carney & Company LLC for over 20 years. Carney brings a background in business, commercial real estate and residential real estate marketing, sales and leasing.

East Boston Savings Bank East Boston Savings Bank has announced Sandra Caggiano has been appointed to its board of directors.

Caggiano, a former corporator and trustee for East Boston Savings Bank, brings experience within the Municipal and District Court Departments of Massachusetts.

Kennebunk Savings Kennebunk Savings announced that Thomas Zuke as senior vice president and CFO. Zuke was previously with another Maine mutual savings institution where he was CFO since 2009.

Thomas Zuke

Promotions Meredith Village Savings Bank

Elise Cushing has joined the business development department as a business development officer for Meredith Elise Cushing Village Savings Bank (MVSB). She was previously the branch services manager for the bank’s Ashland, New Hampshire office.

Cushing joined MVSB in 2010 as a teller at Kelly Beebee the Plymouth, New Hampshire office on Main Street.

Kelly Beebee recently joined the mortgage lending department as a mortgage loan originator. She was previously branch and

business development manager for the bank’s Plymouth Main Street office. Beebee joined MVSB in 2006 as a head teller.

New Hampshire Mutual Bancorp

Michael Boisvert has been promoted to vice president of internal audit for New Hampshire Mutual Bancorp. In his Michael Boisvert new role, he oversees the internal audit function for the entire organization. Boisvert has has 30 years of experience in banking and joined Meredith Village Savings Bank in 2005.

Webster Five Cents Savings Bank Webster Five Cents Savings Bank announced the promotion of Kim Brown

from personal banker to assistant branch manager of the newest branch in Worcester. Brown began at Webster Five in 2002 as a senior teller at the main branch.

Kim Brown The bank also promoted Anjena Kuzdzal to mortgage loan originator. Kuzdzal began her career with Webster Five in 2009 as a customer service representative at the Anjena Kuzdzal Oxford branch. Prior to joining Webster Five, Anjena worked in loan and mortgage servicing for seven years, where she developed her loan servicing skills and interest in assisting customers.

New Arrivals Blue Hills Bank

Blue Hills Bank has added Kevin Byrne to its residential lending team as vice president and senior loan officer. Byrne has 30 years of experience in loan Kevin Byrne officer and sales manager positions, but most recently worked with PHH Home Loans as a senior loan officer.

Meredith Village Savings Bank

Daniel Dolan has joined Meredith Village Savings Bank (MVSB) as vice president of commercial lending. He Daniel Dolan is based out of MVSB’s mortgage, business and personal loan office in Hampton Falls, New Hampshire. Dolan has 31 years of experience in community banking. Prior to joining MVSB, he worked as vice president commercial lender at Eastern Bank.

Merrimack County Savings Bank

Jake Potter has joined Merrimack County Savings Bank as a mortgage loan originator.

Potter will be working out Jake Potter of the bank’s North State Street office in Concord, New Hampshire.

Potter has 16 years of banking experience.

Prior to joining the bank, he was branch manager at Lake Sunapee’s Hillsborough office for 10 years.

MillRiver Wealth Management

Ian Wilmot has joined MillRiver Wealth Management as a financial advisor in MillRiver’s Wolfeboro Ian Wilmot office, located inside Meredith Village Savings Bank. In this role, Wilmot will work with customers to create an

engaged, professional partnership, focusing on each client’s individual goals and objectives.

Wilmot comes to MillRiver with more than six years of experience in financial services.

Prior to joining MillRiver, he held various positions at Santander Bank and Citizens Bank.

Webster Five Cents Savings Bank

Webster Five Cents Savings Bank has hired Keith Kirkland as vice president and business lending officer to join the Keith Kirkland business banking division.

In this role, Kirkland will be responsible for the structuring and closing of business loans, developing new business, as well as maintaining and servicing the existing loan portfolio. Kirkland has 28 years of experience in the banking industry and most recently worked at Southbridge Savings Bank as vice president and commercial lender. BNE BANKING NEW ENGLAND

27

PROTECTING GOOD VULNERABLE COMMUNITY WORKS CLIENTS

Financial institutions large and small have been making a difference in their communities for years. In this space, we acknowledge them, and welcome readers to submit news of their own banks’ efforts and endeavors to Editorial Director Cassidy Murphy at cmurphy@thewarrengroup.com.

Androscoggin Bank Lewiston, Maine-based Androscoggin Bank’s MainStreet Foundation distributed $13,510 to five nonprofit organizations.

BankNewport

Berkshire Bank Berkshire Bank announced that its charitable foundation awarded $1,120,862 in grants from Jan. 1 to June 30 to nonprofit organizations across Massachusetts, New York, Connecticut and Vermont.

Bristol County Savings Bank

Featured Banks • Androscoggin Bank • BankNewport • Bay State Savings Bank • Berkshire Bank • Bristol County Savings Bank

BankNewport hosted a tennis clinic for youth from the MLK Community Center in Newport, Rhode Island as part of its Summer Adventure Camp, a program that incorporates fitness, literacy, science and math based activities. Tennis pros from the Hall of Fame Tennis Club shared their knowledge and skills with the youth.

BankNewport

Bristol County Savings Bank, through its Bristol County Savings Charitable Foundation, awarded grants totaling $80,000 to 11 nonprofit organizations located in the Southcoast Region of Bristol County, Massachusetts.

Bristol County Savings Bank

• Charles River Bank • Country Bank • Eastern Bank • Lake Sunapee Bank • Merrimack County Savings Bank • Middlesex Savings Bank • Needham Bank

BankNewport distributed a $10,000 grant to East Bay Community Action Program to help fund digital literacy courses for students enrolled in their Workforce Development programs, An Even Start in Newport and the East Bay Skills Alliance.

BankNewport

• Newburyport Five Cents Savings Bank

Charles River Bank

• New Hampshire Mutual Bancorp • South Shore Bank

Newport, Rhode Island-based Bank Newport distributed a $100,000 grant to the Newport Hospital Foundation to help fund the purchase of a 3D tomosynthesis mammography unit for the women’s imaging section of radiology at the hospital.

Bay State Savings Bank

The Worcester, Massachusetts-based Bay State Savings Bank raised $3,500 for its Champions for Children honoree, Worcester PIF (Pay It Forward) at the Taste of Shrewsbury Street in June.

28 BANKING NEW ENGLAND

Bristol County Savings Bank (BSCB), through its charitable foundation, recently awarded a $10,000 grant to the Boys & Girls Club of Pawtucket

Charles River Bank presented a donation check of $1,000 to the Medway Mustang Gridiron Club of Massachusetts.

Charles River Bank

Charles River Bank recently donated $500 to the Mendon Police K-9 program in Massachusetts.

Country Bank

Lake Sunapee Bank

Newport, New Hampshire-based Lake Sunapee Bank recently raised $2,000 for CATCH Neighborhood Housing through Bankers’ Bank Northeast’s annual Charitable Golf Tournament.

Country Bank employees recently joined forces with Habitat for Humanity Metro West/Greater Worcester, Massachusetts to build a local veteran family a custom playhouse.

Merrimack County Savings Bank

Newburyport Five Cents Savings Bank

Newburyport Five Cents Savings Bank Charitable Foundation made a $5,000 donation to support Essex County Greenbelt Association’s services. The donation supports the organization’s mission to protect and conserve local farmland, wildlife habitat and scenic landscape.

Newburyport Five Cents Savings Bank

Eastern Bank Merrimack County Savings Bank donated $15,000 to the nonprofit agency Harbor Homes in Nashua, New Hampshire.

Boston-based Eastern Bank’s charitable foundation awarded $10,000 to SHARE Outreach Inc. to support the organization’s Self-Reliant Program.

Merrimack County Savings Bank

Eastern Bank

Massachusetts-based Newburyport Five Cents Savings Bank Charitable Foundation made a $25,000 donation to support The Pettengill House’s general services. This donation supports the organization carry out its mission to support and empower children and families.

New Hampshire Mutual Bancorp

CASA of New Hampshire recently received a $10,000 grant from Eastern Bank.

Eastern Bank

The Merrimack County Savings Bank Foundation granted $2,000 to CATCH Neighborhood Housing in support of the Riverbend Mill rental development project in Franklin, New Hampshire.

Middlesex Savings Bank Middlesex Savings Charitable Foundation awarded a total of $325,500 to 20 nonprofit organizations based in Eastern and Central Massachusetts.

Needham Bank

The Eastern Bank Charitable Foundation awarded $10,000 to Manchester, New Hampshire-based Helping Hands Outreach Center as part of its annual “Targeted Grants” program.

Needham Bank is the lead sponsor for the newly completed Veteran’s Road Playground Project. The “Gus” Toomey Playground will serve as a place for the families living in Dedham Housing Authority housing in Massachusetts, to gather and to socialize and play at a brand new community park.

New Hampshire Mutual Bancorp pledged $2,510 to Lakes Region Child Care Services in support of its playground expansion at the organization’s Early Learning Center in Belmont, New Hampshire.

South Shore Bank

South Shore Bank donated $2,000 toward Weymouth, Massachusetts’s 2016 4th of July Celebration.

BANKING NEW ENGLAND

29

PROTECTING VULNERABLE IN CASE YOU MISSED IT CLIENTS

Featured Banks

Savings Bank of Walpole Recognized For Employee Appreciation

• Berkshire Bank • Bristol County Savings Bank • Savings Bank of Walpole

Keene, New Hampshire-based Savings Bank of Walpole has been named one of the best companies to work for in the state by Business NH Magazine’s annual Best Companies to Work For competition. The bank was recognized among 17 other businesses in the state that exceeded the competition’s criteria for excellence.

The magazine evaluated the companies’ performance through an extensive employer survey detailing benefits and workplace practices, and employee surveys that were completed by at least half of the company’s workforce were taken into account. Business NH Magazine also conducted on-site meetings with a crosssection of employees, followed by a tour of each business, to establish its final choices. The bank was included on the list for creating a workplace where employees are appreciated, recognized and rewarded.

Berkshire Bank Plans Boston Expansion The Pittsfield, Massachusettsheadquartered Berkshire Bank is planning to move into downtown Boston, fresh 30 BANKING NEW ENGLAND

off the heels of its recently announced acquisition of another franchise with a strong presence in New Jersey and Philadelphia.

Berkshire filed an application in July with the Massachusetts Division of Banks to open a branch at 121 Congress St. “Berkshire chose to go the route of opening a new location to allow for greater site selection opportunities versus purchasing an existing traditional branch,” Tami M. Gunsch, executive vice president of retail banking, said in a statement emailed to Banker & Tradesman. “The Berkshire Bank branch model reduces operating, core build-out and square footage costs. Lower costs means more branch convenience, brand presence and maximizing teamwork through an efficient floor plan that can easily shift tasks in response to customer traffic.”

Gunsch said the bank anticipates opening the new branch at the year’s end and indicated the bank would share more details closer to that time.

In late June, Berkshire announced it would purchase First Choice Bancorp, based in Lawrenceville, New Jersey, in an all-stock deal valued around $111.7 million.

BCSB Reports Small Business Loans Under New Program

Taunton, Massachusetts-based Bristol County Savings Bank reported originating 355 small business loans, with committed original loan balances totaling $40,670,892.20, and with outstanding principal balances of $18,530,911.32 as of June 30, 2016.

The bank is one of 51 in Massachusetts participating in the Small Business Banking Partnership created by the Massachusetts State Treasury. The program works to redistribute state tax funds to insured, responsible community banks that will extend new loans to small businesses.

Bristol County Savings Bank was originally approved for and received $5 million under the Small Business Banking Partnership in July 2011 and then received an additional $5 million in funds under the expanded program in March 2012. The bank is currently one of only 29 Massachusetts banks to have received the additional funding, up to the maximum of $10 million. BNE

OWN MY SOLAR Tailored Marketing Platform To Increase HELOC Utilization And Loans Powered By Solar.

LENDER BENEFITS • Additional touchpoints through cross-selling and new referrals • Offer green initiatives to indicate your institution’s innovative spirit • Program marketing templates and customer education

PROPERTY OWNER BENEFITS • Save thousands in utility costs • Take advantage of federal and state tax incentives • Increase property value and future marketability

Visit us at The Bank Summit for a Live Demo and to learn how we can help you grow your lending portfolio.

978-886-3155 | INFORMATION@NRGTREE.COM | WWW.NRGTREE.COM | 250 NORTHERN AVE, 4TH FLOOR, BOSTON, MA 02210

HOW WILL YOU KEEP AHEAD OF THE CURVE?

Experience the Difference Bank Design • Architecture • Branding • Bank Equipment Construction • Branch Transformation www.nes-group.com

905 South Main Street, Bldg B Suite 201, Mansfield, MA 02048 • 508-339-6600

www.drlarchitects.com