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Miscellany

Wow, I’m Actually Leaving My Day Job!

This week I celebrate an important anniversary in my professional career as I close this chapter and begin a new one.

Twenty years ago this week, I joined a small bank that would become one of the largest and most respected in the country. It has been an incredible ride, and I got the chance to work with some of the greatest people in the business. Not many bankers get to learn directly from an American Banker Banker of the Year CEO, but I have worked for two. At the same company. (Jerry Grundhofer and Richard Davis.)

During that time, we grew from $6 billion to nearly $350 billion in assets, and the market value of the company grew from $750 million to over $60 billion, with two 3-for-1 stock splits along the way. (More detail is available on My Day Job page.)

I know that the experiences and opportunities that I have had, the people I have met, and the things that I have learned will serve me well as I leave and begin a new chapter.

Where Do I Go From Here?

First of all, I will continue writing here about the intersection of leadership, advice and innovation. I started this blog as an outlet for my professional passions, and it has exceeded my expectations. It has been viewed thousands of times in over 30 countries, and my posts are also now available on www.bankinnovation.net and www.bankNXT.com.

New Opportunities

Secondly, I am thrilled with the new opportunities that have been presented to me so far–  and I haven’t even officially left yet! I feel very fortunate to have so many friends all around the industry, and very fortunate to know that I will have the chance to make a significant impact in another senior leadership role.

Hanging Out My Shingle

Among those current opportunities are some speaking and consulting engagements, so I will also add the titles Founder and CEO to my resume. I have started a new consulting firm called Clientific, LLC as a way to help others while I consider the right long term leadership role. The ‘intrapreneur’ gets to try ‘entreprenuer’ on for size– at least for a little while!

Let me know if you think I can help you or your firm.

Why Am I Leaving?

Simply put, the timing is right. I am proud of the work my team has done to help turn what was once a small regional bank into a competitive national platform. I have always called myself an “embedded entrepreneur” and said that I love to build great businesses with great people. That has certainly been the case here. The organization is ready for someone to pick up from here and take it to the next level, particularly with a deeper concentration on the high quality credit book we have built. I couldn’t imagine a more amicable and professional parting of ways, and I remain a fan and a friend of the bank and its leadership and teams. I wish them nothing but the best.

Stay tuned for details of my new adventures!

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My Mom has a PhD in Common Sense

2019 update: My mom lost her decades-long battle with COPD in May of this year. I found good homes for her new Macbook, her iPad and some of the new hobbies she had taken up in her 80s. I kept her iPhone 8 with the wallpaper set to celebrate her beloved Cleveland Indians, and the framed printed version of this blog post that she proudly displayed in her living room. I’m glad I didn’t wait until she was gone to write it, or this one, The World I Want to Live In.

“I need a new Skype headset, do you know if they take PayPal?”

That was a text I received from my then 72-year old Mom a couple of years ago.

From her iPhone 3G.

Before she upgraded to the 4S, 5S or her current 6S.

She also had a Twitter handle and a Kindle before I did.

The ‘Figure it out’ Gene

It’s not that she’s necessarily tech savvy. I sent her my old wireless router so she could have finally have WiFi at home after she bought her first iPad. She had no idea how to insert it between her cable modem and her Dell desktop at the time, so she placed a call into her personal help desk (me), while I was walking through O’Hare airport. After a confusing round robin of misunderstood explanations on both ends, I finally said (lovingly, of course) “You will have a time to speak, but this is not that time” and then I dictated a diagram for her to sketch out for herself. It was kind of like trying to play Draw Something through Siri.

We still laugh about that, but she figured it out, she is naturally curious. She once described herself as having the ‘figure it out’ gene, and I quickly realized that was a trait present in most of my favorite people. Neither of us is very patient with helpless types.

“At work they ask me how I know how to fix copy machines” she once told me. “I just open the cover and look for things that look like they’re broken or disconnected. How hard is that?”

Sadly, it’s apparently too hard for too many.

A Ph.D in Common Sense

Mom doesn’t have a ton of formal education, but she is a voracious reader of nearly anything  that she can get her hands on (on paper or in pixels), and I always say she has a Ph.D in Common Sense. She grew up working with my small business-owner grandfather, and I’ve heard her give advice on marketing and management to the successful entrepreneur who has entrusted her for the past 30+ years.

And believe me, you don’t want to come up against her on Words with Friends. She holds about a .700 record against me, mainly due to her maddening penchant for tucking multiple words into random gaps (usually with Triple Word Scores) and leaving me nothing to work with.

It’s not that she doesn’t appreciate formal education. She dropped out of high school, but she grew up in a very different era in a blue collar family that worked early and often. But she made sure that I was the first person in the family to go to college. “When you go to college…” I always remember saying to me when I was young. Never “If you go”.

She instilled in me my love of reading, learning and traveling (often to her chagrin, she worries, you know), and she encouraged me to explore, take risks and be an early adopter. I wouldn’t be who I am without her.

Happy Mothers Day, Mom.

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Stop When You Get to Yes!

That’s classic sales management advice, yet I have seen countless sales professionals ignore it at their peril.

The advice applies outside of sales too, and I just witnessed it yesterday in a whole new context on my flight to San Francisco.

We are all buckled into our (relatively) comfortable exit row seats and the flight attendant had just finished giving us the instructions for operating the doors. As per FAA regulations, she said that she needed to make sure that each and every one of us understood the instructions and that we were ready, willing and able to assist in the event of an emergency, and then she began checking with us one by one.

When she motioned to me in the window seat, I looked her in the eye and said “Yes”, as did the poor guy stuck in the middle seat next to me.  When she turned  to the man seated in the aisle seat, he looked up quizzically and said “Hmm?”.

The flight attendant asked him again if he understood the instructions and if he was ready, willing and able to assist in the event of an emergency.

The passenger replied in a thick accent “Yes. My English is not that bad”.

The flight attendant replied that she was concerned that he might not be able to understand instructions in the chaos of an unlikely emergency and that she was going to have to move him to another seat.

He protested with a few sentences in fluent, if heavily accented, English; trying to assure her that he did understand.

It was too late. the flight attendant had to make a judgment call on the potential safety of passengers, so she moved him.

The guy in the middle seat shrugged and slid over into the now vacated aisle seat, giving both of us the next best thing to first class– reclining exit row seats with an empty middle seat between us.

He knew how to stop when he got to yes.

And I did too.

Preview: Bank Innovation Conference

Here’s where to find me the next couple of days while I’m at the Bank Innovation conference in San Francisco. I’ll report back next week with implications on the intersection of leadership, advice and technology.

Wednesday, March 28, 2012

Session 1:  What Is “Banking” Today?  A Debate on the Future

  • How can banks realize the dream of “holistic” banking considering legacy challenges
  • What do the most successful start-ups tell us about the future
  • Which conventional wisdoms about the future of banking are wrong
  • How does the branch and ATM fit into the concept of the Future Bank?

Panelists:

Noah Breslow, Chief Operating Officer, On Deck Capital

Shawn Budde, Co-Founder & Chief Risk Officer, ZestCash

Dan O’Malley, Founder & CEO, PerkStreet Financial

Jeff Stephens, Founder, Tribed and CBC

Session 2:  New Product Strategies & Possibilities

  • Where the consumers are, now
  • Innovations worth noting and ones worth ignoring
  • How CFPB and Dodd-Frank realities color product design
  • The future of PFM
  • How should “commerce” integrate with “banking”

Panelists:

Philip Jenkins, Chief Operating Officer, Strands Finance

Rafael Lopes, VP, Sr. Product Manager – International Products & Digital Channels, City National Bank

Iker Marcaide, Founder, Peer Transfer

Todd Sandler, Head of Product Strategy & Deposits, ING Direct

James Shanahan, President, Shanahan & Associates, LLC

Josh S. Turnbull, Managing Consultant, Advisory Services,  Center for Financial Services Innovation

Session 3:  Social Banking Without Being Insecure or Annoying

  • Elements of an effective Twitter strategy
  • The mobile piece explored
  • Is it possible to successfully leverage location apps?
  • How does banking become a part of the social media experience?

Panelists:

Kimarie Matthews, VP of Social, Wells Fargo

Josh Reich, CEO, Simple Finance Technology Co. / BankSimple

Eric Rinebold, Industry Principal — Digital Engagement, Infosys

Thursday, March 29, 2012

Session 4:  Channel Agnosticism: Being Everything to Every Customer

  • Getting more consumers to embrace innovation
  • Usage trends
  • Overcoming the challenge of balancing customer wants and legacy system realities
  • Can branches be maximized?
  • What are the operational challenges that need to be overcome in order to be truly channel agnostic?

Presenters:

Ginger Schmeltzer, SVP, Digital Channel Management, SunTrust Banks

Geoff Knapp, Vice President, Online Banking & Consumer Insight, Fiserv

Julie Milbrand, Vice President, Community Banking, Internet Services Group, Wells Fargo

Session 5:  Separating Digital Wallet & Mobile Payment Fact from Fiction

  • One wallet or multiple wallet platforms? What level of integration can we expect or is necessary?
  • What’s out there now? What’s on the way? Where does NFC fit in?
  • Loyalty, points, rewards and virtual currencies
  • The future of cashless payments

Panelists:

Bill Clark, President, Spindle

Mark Fischer, Chief Executive Officer, Inspire Commerce

Michael Garelik, Financial Services Innovation & Mobile and Alternative Payments Specialist

Omar Seyal, Co-Founder, Tagstand

Eric Remer, CEO, PaySimple

Session 6:  Shop-aholic: Integrating Banking Into a Better Shopping Experience

  • Rewards and banking
  • Payments platform implications for bankers and retailers
  • Where do ATMs fit in?
  • How the digital wallet fosters better retailing?

Panelists:

Marc Caltabiano, VP Marketing & Products, Cartera Commerce

Lewis Gersh, Managing Partner, Metamorphic Ventures

Samir Kothari, Co-Founder, Truaxis

Brian Rigney, VP & GM Business Solutions, CashStar

Session 7: The Organic Online/Offline Twitter Ideastorm

  • During this session, we’ll undertake a good, old-fashioned brainstorm, but using newfangled social media with ideas aired live and via Twitter converging into a dynamic blend of innovation and a glimpse of the future.

Session 8:  App Crazy: Postcards From the Edge of Digital Banking

  • Why certain apps work, and certain apps suck
  • App update by device
  • What’s the next new-new thing?
  • Smartphone vs. tablet vs. both

Presenters:

Eric Connors, SVP of Products, Yodlee

Joe Adams, Managing Principal, Hampton Pryor Consulting

Is Bank Merger Mania Imminent?

The results of the Federal Reserve’s recent Comprehensive Capital Analysis and Review (CCAR) stress tests have increased the long running speculation that another round of rampant bank mergers may by just around the corner. The number of banks in the U.S. is about half of what it was in 1990, and I don’t see anything changing that trend line.

The most recent spate of bank failures peaked in 2010 with 157, and despite all the headlines, this was significantly lower than the prior peak of 281 failures in 1990. But the primary driver of consolidation in the industry over time has actually been mergers, not failures. Merger activity increased every year from 1992 to 1995, peaking at 606 that year. During that run-up, the number of mergers ranged from 3.7% to 6.1% of the total number of banks.

In 2011 there were only 167 mergers, equal to only 2.8% of the total number of banks, so it would appear that there is plenty of room for additional consolidation. Stubbornly difficult rates of unemployment, housing prices and loan demand make it challenging to achieve decent ROE growth, and the stronger banks have significant advantages over the weaker ones.

Worse, all of those banks competing (all too often on price alone) for a larger share of a slow growing market will likely cause further margin erosions. And again, the stronger banks are better positioned to withstand these pressures too.

Serge Millman of Optirate recently noted that banks are battling with 27 competitors in a typical market, and that 66% of all deposits are held by banks competing in regions with 50 or more competitors!

Since 1990 there have been an average 6.5 mergers for every failure, more than triple the 2011 rate of 1.8 to 1, and the peak of the last cycle was a whopping 598 to 1 in 1997.

Throw in the hassle and expenses of complying with the hundreds of new rules coming out of Dodd-Frank (most of which are nowhere near finalized), and it isn’t hard to imagine many bank directors deciding to sell in the not-too-distant future.

Best Ideas from the Best of the ABA

After exploring my inner geek the week before at the Microsoft Research TechFest2012 and the GeekWire Summit, it was time to put the pinstripes back on this past week (figuratively, at least) as I headed to Scottsdale for the American Bankers Association Wealth Management Conference.

There were more suits and ties and fewer jeans (and no North Face or Marmot jackets), and more pads and pens and fewer iPads and utlrathin notebooks, as I might have expected. I didn’t have live Twitter conversations about the carpeting that looked like QR codes; but just like last week, I still found some bright and engaged people trying to navigate turbulent and uncharted waters to engage their customers and grow their business. Here are the highlights:

Best quote:

“Watching the stock market last year was like watching a chicken try to fly.  

Too much ballast and not enough lift.”

–  Dr. David Kelly, Chief Market Strategist, J.P. Morgan Funds

–

Back to the Future: 

“Go back 10 years to 2002– the key question was when to get back into technology stocks? No one was asking about REITs, commodities, emerging markets, gold, or any of the things that have outperformed since. U.S. stocks have out-performed BRIC (Russia, Brazil, India and China) for 4 years straight, but no one is interested.”

–Richard Bernstein, founder, CEO and chief investment officer,

Richard Bernstein Advisors, LLC

–

Ready and Willing, but Unable?

“Fifty percent of high net worth clients are willing to interact with their advisors via mobile, but only 18% have it available to them.”

 –Eileen VanScoy, Executive Vice President of Product Management, SunGard

–

What Drives Client Loyalty? It Depends:

What Drives Loyalty To Advisors:

  1. Trust
  2. Proactive communication (1x/month)
  3. Quality of advice

What Drives Loyalty To Firms:

  1. Quality of advice
  2. Service
  3. Value for money

(Note that clients think advice is a firm’s responsibility- Top driver of loyalty to the firm, third driver of loyalty to the advisor)

–Michael Kostoff, Partner, WISE Gateway LLC,

former Executive Director of the VIP Forum

–

What Drives ‘Brand Love’ and Trust?

  • Integrity
  • Intent
  • Capabilities
  • Results

Define the desired service experience, make culture a verb and make sure everyone in the organization understands and lives the desired experience as “The way we serve”:

  • Starbucks- the “third place”, as comfortable as your living room.
  • Ritz Carlton- re-create the home of loving parents.
  • Zappos- “wowful happiness”

–Joseph Michelli, PhD,
Author and Organizational Consultant