Familiar Territory

“It’s always important to be looking for the next great idea.” —James Sills, Mechanics and Farmers Bank

“It’s always important to be looking for the next great idea.” —James Sills, Mechanics and Farmers Bank

James Sills returns to community banking with a strong focus on technology and IT security

By Elizabeth Judd

Mechanics and Farmers Bank
Headquarters: Durham, N.C.
Assets: $300 million
Retail locations: Seven
Full-time employees: 75
Founded: 1907
Website: www.mfbonline.com


A New Perspective

Recently landing at Mechanics and Farmers Bank as chief executive after eight years away from community banking, Sills says the biggest industry change he sees is how technology has leveled the playing field between community banks and the largest financial institutions.

“If you look at the banking-related commercials on TV, most of them have a heavy emphasis on technology in terms of products and services that the bank wants their existing and potential customers to know they offer,” Sills points out.

With the memory of wide-scale data breaches at JPMorgan Chase and big-box retailers still fresh, Mechanics and Farmers Bank in Durham, N.C., can take considerable comfort that its new president and CEO identifies himself as a “technology strategist.”

Data security is not only foremost on James Sills’ mind; it’s a foundation of his professional knowledge and firsthand experience.

Sills is in the unusual position of having been chosen to lead a community bank after spending nearly a decade working in information technology outside the banking world. For the past five years, he served as chief information officer for the state of Delaware and as secretary for the state’s Department of Technology in the governor’s cabinet. He was responsible for the technology initiatives throughout the state’s government, including how technology supported the work of the state’s 34,000 employees.

“It’s unusual now,” Sills says, “but eventually I think you’ll see more people like me with a technology background” assuming the chief executive helms at more community banks.

Certainly, he is no stranger to community banking. His touch down at Mechanics and Farmers Bank represents a return, not a first go-around, to community banking. Earlier in his career, he worked as chief operating officer and president and CEO for community banks in Alabama and Tennessee, as well as executive vice president for the $120 billion-asset credit card bank MBNA in Delaware, which was later acquired by Bank of America.

Sills says he was drawn to join Mechanics and Farmers Bank because of its history as one of the country’s oldest minority-owned banks, its strong board of directors, its “terrific staff” and the “opportunities for improvement” he sees there. On the technology front, he is overseeing the final phases of a shift to a new core processing system and revamping the bank’s website and digital service offerings. Other plans include diversifying the bank’s loan portfolio and adding new products.

However, returning to his familiar area of operations, Sills believes that technology is now so central to financial institutions and everything they do that its importance can’t be denied: “If you look at the banking-related commercials on TV, most of them have a heavy emphasis on technology in terms of products and services that the bank wants their existing and potential customers to know they offer.”

To the cloud and beyond

Some of the most memorable lessons Sills learned in state government revolve around the growing importance of cloud technology—a lesson with ramifications for community banks. “Community banks are perfect for leveraging cloud technologies because they normally do not have large IT budgets or IT staffs,” he says.

Not surprisingly, other important technology lessons he’s learned involve cybersecurity. In his previous post with Delaware’s state government, hacking was the chief worry that kept Sills up at night. His main concerns were whether a hacker might succeed in stealing sensitive government or citizens’ data, or defacing the state’s websites as a political statement.

“All governments, banks and retailers are being attacked every single second of every day,” he says. “The potential hackers are very sophisticated and they have some unbelievable tools.”

For community banks to handle the onslaught of cyberthreats facing all financial institutions, Sills certainly recommends using data encryption to lock down all communication channels handling sensitive information. But he also urges community banks to remain committed to giving their internal teams ongoing training and information resources to educate themselves continually on the constant changes in cybersecurity threats.

“The threats change every day,” he points out. “So if your training has not kept pace with information related to network penetration, you could be susceptible to a pretty bad event.”

Sills has been heartened to find that Mechanics and Farmers Bank is taking precautions, such as conducting periodic third-party penetration testing and phishing training exercises with employees. “I feel good about what I’ve seen thus far,” he says.

Finally, Sills believes that it’s the role of community bank leaders to educate their customers on cybersecurity. They can, for instance, use their institution’s websites, monthly statements and even social media channels to remind customers to change their online account passwords regularly and refrain from clicking on any links from unfamiliar sources.

After an eight-year period career excursion away from banking, Sills says the biggest industry change he sees now is how technology has leveled the playing field between community banks and the largest financial institutions. Now the websites, mobile services and other technology-based offerings community banks provide are often as or more impressive than those available at financial mega-institutions, he says.

‘The next great idea’

For Sills, focusing on technology often requires a shift in mindset, with community bankers considering what they like about the mobile apps they might use personally and how different technological innovations in other industries might apply to financial services. “It’s always important to be looking for the next great idea or the next great app to see if we can incorporate whatever that app does into our banking environment,” he says.

Already, Sills has begun updating Mechanics and Farmers Bank’s website and planning for a more prominent Twitter presence. He is amazed at the amount of information on a community and customers that can be gleaned from social media, including about individuals who might never venture across the threshold of a community bank’s branch lobby. He also recognizes how social media is transforming even local community business networking, including how individuals meeting at local chamber of commerce events are exchanging LinkedIn invites rather than business cards.

“As community bankers, we have to use social media and other types of technology,” Sills points out. “I’ve been out of banking for a while so it’s a different lens I’m bringing and a different approach.

“I view myself as a change agent. I’m trying to mesh my skill set with the skill sets of my staff, and, in the long term, I’m convinced working together we will make [Mechanics and Farmers Bank] a better bank.”


Elizabeth Judd is a freelance writer in Maryland.

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