Future Forecasting

0215_FutureForecasting_770

Several workshops at this year’s ICBA national convention in Orlando next month will examine what’s ahead for community banking

By Beth Mattson-Teig

ICBA Community Banking LIVE 2015

Feb. 28–March 4, 2015

Schedule at a Glance

Saturday, Feb. 28 (pre-convention day)

  • Give Kids the World—Community Service Project
  • Registration/Banquet Desks Open

Sunday, March 1

  • Registration/Banquet Desks Open
  • First-Time Attendee Orientation*
  • Pre-Convention Sessions (Bank Director Current Issues, etc.)**
  • Expo Exhibit Hall Open
  • Welcome Reception in Exhibit Hall

Monday, March 2

  • Registration/Banquet Desks Open
  • Expo Exhibit Hall Open
  • Concurrent Workshops
  • Tours**
  • Lunch with Exhibitors
  • State/Regional Partners and Exhibitor Receptions*

Tuesday, March 3

  • Registration/Banquet Desks Open
  • General Session
  • Concurrent Workshops
  • Tours**
  • ICBPAC Silent Auction**

Wednesday, March 4

  • Registration/Banquet Desks Open
  • General Session
  • Annual Banquet/Show

(*) By Invitation.
(**) Additional Registration Fees Required.

The Latest ‘LIVE’ Info
For the most current information on all things about ICBA Community Banking LIVE 2015 in Orlando, visit www.icba.org/convention2015.

So what’s in your community bank’s future? Those attending next month’s ICBA national convention in Orlando are about to find out.

ICBA has planned a lineup of more than 60 workshops and networking sessions for the convention, many of which aim to better prepare community bankers for the fast-developing issues they face both today and in the future. This year’s workshops take an in-depth look at key trends, their impact on the industry, and some of the strategic initiatives and solutions community banks are deploying to expand and grow their businesses in the current climate. Topics to be covered by respected industry experts include social media, succession planning, identifying new sources of revenue, understanding a new generation of customers and the evolution of the retail location.

Finding new income sources

So what is the future of the community banking model?

J. Michael Woody Inc., a bank consulting firm that provides teaching, training and expert witness services based in Edmond, Okla., will tackle the topic at the convention while leading the aptly titled workshop “Future of Community Banking—Is the Model Broken?”

Yes, community banks are seeing costs rising, while net interest margins for community banks are dropping, Woody observes. He adds that the path forward toward success for many community banks involves continuing to control expenses while finding new noninterest operating income sources.

Woody will explain how the Bank Holding Company Act gives community banks the opportunity to pursue new business lines such as brokerage, insurance, venture capital and travel. The workshop will examine how to adapt to the changes and challenges community banks face in customer demands, product delivery, regulation and critical products. In particular, it takes a deeper dive on the options available to community bankers to boost profitability.

Part of the workshop will also open up discussion to allow bankers to learn from others’ successes and failures, through what works or doesn’t work. “There are pitfalls into any strategy, but I think necessity is going to drive community bankers to take a look at some of these new businesses,” Woody says.

Grooming new leaders

A major issue for community banks in preparing for the future is providing for an orderly management succession. Many community banks today have had the same management in place for a long time and may not have a formal management succession plan in place, says Greyson Tuck, a director at Gerrish McCreary Smith consulting firm in Memphis, Tenn.

“What we are hoping to do is give some of these younger community bankers the tools that they need to figure out what it is that we need to do today to successfully lead their organization when their time comes,” Tuck says.

Tuck and colleague Doc Bodine will be presenting a leadership development workshop on “Preparing Today for Leadership Tomorrow.” The workshop applies to both existing bank leadership and those up-and-coming future bank leaders. From the perspective of experienced managers, the question is how to develop the next generation of leaders. For the up-and-comers, the focus is on what they need to do to be better prepared to step into those leadership roles.

Leadership is a popular topic that is frequently addressed through different ICBA educational seminars. “But, there is a little bit of a gap in how do we take general leadership concepts and apply them specifically to the day-to-day in our industry,” Tuck adds. For that reason, the convention workshop will not be just a general discussion on leadership, but more specifically it will address developing leadership and how to apply that to a bank’s own daily practices, he adds.

For example, when a particular situation arises, consider what is the best way to involve a younger employee and help him or her to become a leader through experiencing that good or bad scenario, Tuck observes. Problems often provide an opportunity to develop skills.

“As a younger leader, when a problem does come up, what can you do to support those around you, which is really one of the key concepts of leadership—making those around you more productive, rather than just focusing on getting your job done,” he adds.

Educational Workshops

This year’s Community Banking LIVE 2015 will offer more than 60 workshops organized in the nine topics below

  • “C-Suite” Management—Briefs you on issues and concerns critical to experienced professionals who run community banks.
  • Compliance and Risk Management—Strategy and preparedness education for community banks so they can stay ahead of the curve and out of harm’s way.
  • Individual Growth and Professional Development—Polishing up your old skills and learning a few new ones to give you the advantage you need in today’s rapidly evolving world.
  • Leadership Development—Provides insights on trends and developments that are shaping the future of community banking and helping you prepare for the next generation of employees and customers.
  • Lending—Expert insight and guidance for today’s lending environment including agriculture, small business, credit cards, mortgage and commercial.
  • Regulations and Exams—Designed to keep you up-to-date on supervisory, regulatory and operational issues at the federal level.
  • Revenue and Growth—Specialty workshops dedicated to community banks with a specific focus on revenue generation and franchise expansion.
  • Technology—Informs you of technological advances that can enhance your bank’s bottom line, increase its operational efficiencies and boost its competitiveness.
  • Your Bank, Your Brand and Social Media—Strategic insights and education on how to skillfully build your brand and communicate effectively with your customers.

New This Year

Give Kids the World—Community Service Project

Saturday, Feb. 28

To extend the community banking spirit in Orlando, Fla., community bankers have the opportunity to assist a nonprofit program, called Give Kids the World, that allows children with life-threatening illnesses to experience Walt Disney World and other Florida family attractions. Community bankers and their guests are invited to help spruce and maintain the program’s Orlando vacation facilities, which have served more than 85,000 families.

Space is limited in the volunteer program, so please sign up early. Transportation will be provided. Note: Volunteers must be at least 12 years old. For more information, visit www.icba.org/convention2015.


Exhibit Hall

Expo is the largest trade show for community banks anywhere. It is your one-stop shop to talk directly with more than 240 world-class service providers exhibiting this year.

Transforming the retail branch

Community banks face the challenge of adapting retail banking strategies in an increasingly connected world. One of the common questions that community bankers ask today is: What is the role of the retail branch, and, more important, is there a need for branches?

There are naysayers who believe that the retail branch is declining and there is much less need for them. However, research shows just the opposite, says Kevin Blair, president and CEO of NewGround, a bank branch construction and detail advisory firm in Chesterfield, Mo. “The importance of a branch today is perhaps more significant in terms of brand presence and serving the complex sales and service needs of the customer,” he says.

However, technology is having a definite impact on the design and delivery of the branch experience, Blair says. There are significant changes occurring within branches in terms of the size, scale and use of the branch because of technology. More community banks are combing those elements to create a new branch prototype.

And those changes highlight a potential problem: What do banks do with their old legacy branches that are no longer relevant?

Blair will address these questions and more in the “Community Banking 2020: Time for Disruptive Retail Transformation” workshop. The session will also feature specific solutions and examples of how the top performing organizations are repositioning themselves to meet the shifting demands of consumers.

“I think most community bankers are behind in understanding what they need to do and how quickly they need to move,” he says. “It is really a critical time for community banks to step up and take action.”

Attracting the Gen Y consumer

As community banks plan for the future, those plans need to account for a new generation of customers. Generation Y, or millennials as they are often called, represent the fastest-growing segment of customers in the entire banking industry. The millennial cohort, which includes those between the ages of 19 and 37, is a generation of nearly 80 million strong. By 2018, they are going to have more buying power than the baby boomers, demographers have widely touted.

“That is incredible and that is something that community bankers need to be aware of as they are planning strategically for their business over the next five years and beyond,” points out Aleis Stokes, ICBA’s senior vice president, media and public relations.

Stokes along with ICBA staffer Chris Lorence, the association’s chief marketing officer, will share recent ICBA research on millennials in a workshop titled “GenNext: Millennials—Your Next Best Customer.” The workshop will cover ways community banks can effectively target these younger consumers through their marketing and public relations efforts. The workshop will also discuss how community banks can leverage ICBA initiatives, such as the “Go Local” campaign to appeal to millennial customers. (See more related information in this month’s Marketing Today)

Results from the ICBA study conducted last summer show definite synergy between community banks and millennials, Stokes says. Some of the key findings of the research show that millennials value community banks, and they also are a very entrepreneurial generation. (Read about ICBA’s survey in a story in Independent Banker’s November issue, titled “Good News from Gen Next.”

More than half of millennial respondents to the ICBA survey (54 percent) said they prefer to work with locally owned and locally operated community banks to handle their financial needs. ICBA’s study also found that millennials have a strong entrepreneurial spirit. In fact, 46 percent of all millennials surveyed said that they are interested in learning about how to start and run a successful small business. That entrepreneurial sprit is a good match for community banks, which provide nearly 60 percent of all small-business loans in this country.

“What we also found is that there is a real opportunity to reach out to millennials and help to educate them on what a community bank is and what they have to offer,” Stokes says.

To that point, a majority of millennials that ICBA surveyed said they want to learn more about money management and finances. “So that is a real opportunity for community banks to step up and meet that need and provide financial information to millennials and be a partner in their financial future,” Stokes adds.

General Session Speakers

David Gregory
Former Host of NBC’s Meet the Press
@davidgregory

Kat Cole
CEO
Cinnabon Inc.
@KatColeATL

Carly Fiorina
Former Chairman and CEO
Hewlett-Packard Co.
@CarlyFiorina

Jack Hartings
President
The Peoples Bank Co.
Coldwater, Ohio
@jjhartings

Cal Ripkin Jr.
National Baseball Hall of Fame member
@RipkenBaseball

Camden Fine
President and CEO
Independent
Community
Bankers of America
@Cam_Fine

John Buhrmaster
President and CEO
1st National Bank of Scotia
Scotia, N.Y.
@JohnBuhr

Technology for young talent

Meanwhile, most people have heard about how millennials are “changing the workforce.” By 2025, for example, more than 50 percent of the workforce will be composed of that generational cohort. There have been numerous news stories and reports on the unique characteristics of millennials, such as their love of state-of-the-art technology.

However, Beau Ballin, vice president of marketing and client strategy at MotivAction, a Minneapolis marketing firm, says most community banks do not have a problem recruiting and hiring millennials. But, he adds, retaining those younger workers can be the bigger, primary long-term challenge.

“Bankers put time, effort, energy and resources into training these individuals, and then 12, 16, 18 months later [those employees] are gone and on to their next job,” he contends.

To address this emerging workforce challenge, Ballin will lead a workshop titled “Managing a Changing Workforce.” The workshop will dovetail into a second workshop, titled “An Appy Life—Mobile Applications that Can Help Increase Profitability and Productivity,” that Ballin will lead on how technology can play a pivotal role in engaging millennials in the workplace.

“The common thread between the two sessions is really leveraging and utilizing technology,” Ballin says.

In particular, Ballin points out how millennial workers have grown up inured with smartphones as an everyday accessory—one that they unconsciously rely on as their “first screen” of choice for personal and professional information, communication and networking. Recognizing this dynamic, he says, community bank leaders should begin thinking about how to incorporate smartphones and other personal mobile devices into their workplaces as accepted, everyday productivity tools. That thinking should include whether to adopt “bring your own device” policies in the workplace in general, but it should also consider the various mobile software applications that are available that promote productivity and efficiency in everyday work life, he adds.

The “Appy Life” workshop is designed to be very interactive to expose community bankers to different mobile apps that they might encourage their workers to use. In addition, bankers will be encouraged to share some of their own favorite mobile apps. Bankers attending the workshop will be able to use their own smartphones during the session to learn about useful productivity-related apps, but there also will be tablets available to use.


Beth Mattson-Teig is a writer in Minnesota.

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