Liquidity, Regulatory Uncertainty, and Fintech Emerge as Major Themes at Annual Conference

Posted by Paul Davis on Feb 6, 2024 11:09:00 AM


Bank Director’s Acquire or Be Acquired Conference remains a prime-time event for understanding the ever-evolving dynamics in the banking industry (beyond the prominent M&A theme) and copious amounts of networking. Over the four-day conference, there were more than 2,000 attendees this year – and the SRM contingent did its best to connect with as many industry pros as possible.

Several key takeaways emerged from the conference, gleaned from the varied sessions and our interactions with fellow attendees. And while they may be unsurprising, they remain critical for bankers in the year head.

Here are a few SRM insights from our time in Arizona:

Liquidity Remains King

While much of the conference remains committed to M&A discussions and strategies, deposits were a constant talking point inside and outside the sessions. Bankers are hungry for any plan to help them retain and attract deposits by avoiding aggressive rates. (Click here for SRM’s thoughts on transaction accounts).

Regulatory Pressure is Heavy, and Real

Regulators have experienced a grand awakening, leading to heightened awareness of fintech partnerships. The OCC is on a mission, pressing innovation-focused banks to boost capital. Or, more aggressively, a “warpath,” as noted by Eric Corrigan at Commerce Street Capital. Clear examples of this are the OCC orders requiring Vast Bank and Blue Ridge Bank to have higher capital ratios.

Many banks could cut certain products and services in the face of regulatory overreach, Skip Hageboeck, President and CEO of City Holding in West Virginia, warned during a panel discussion. “If regulators crack down on service fees, will banks even want to offer checking accounts anymore?” he posited.

Coastal Financial CEO Eric Sprink said during a panel discussion that he still sees opportunities for banks that approach fintech in the right way. He noted that not all agencies – or their field offices – are the same, observing that the San Francisco Fed was “very progressive” with Coastal’s Banking-as-a-Service strategy. Coastal went through a gauntlet of 90-day exam cycles, where the Fed was open to being educated on the bank’s plans.

Partnerships in Fintech and Beyond Are Critical

While data and stats are critical, getting a sense of customer needs is essential. Sprink said fintech partners provide insight into what the bank’s clients need in terms of products and services. Coastal also gets great feedback on building loyalty and engagement.

The Great Staffing Challenge Continues

Corey Chambas, CEO of First Business Financial Services in Wisconsin, said hiring is tough, though emerging tech helps address some issues. Jay VanSickle, CEO at Wayne Savings Bancshares in New Jersey, suggested occasional audits to determine if employees are doing things that aren’t operationally critical — then understand why that’s happening and adjust.

The Bottom Line

As we noted in our recent insights report, 2024 will be tough to navigate, given so much uncertainty. This year’s Acquire or Be Acquired Conference validated that premise, with bankers emphasizing the need to be agile and adjust to ever-changing circumstances.

Topics: Bank Vendor Management, Credit Union Vendor Management, Deposits, Hiring, Regulation, liquidity, Risk Management, Fintech Contract Negotiation

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