As we wrap up 2021, we’re taking a look back at some of our favorite episodes from this year. We hope you enjoy!

The views, information, or opinions expressed during this show are solely those of the participants involved and do not necessarily represent those of SouthState Bank and its employees. 


Intro: Helping community bankers grow themselves, their team, and their profits, this is The Community Bank Podcast.

Erik Bagwell: Welcome to the community bank podcast, I’m Erik Bagwell, Director of Sales and Marketing for the Correspondent Division of South State Bank, and joining me as always is Caleb Stevens. Caleb’s a business development officer here at the bank and also a very integral part of this podcast and putting it together, Caleb, how are you?

Caleb Stevens: I’m good, good to be back for part two of our, best of show; we had a great time last week covering some of our favorite clips from the culture side of this show, but this week we really want to turn more to the strategy side. So, a lot of good stuff on digital banking, good stuff on M&A, and just in general, what does it look like to grow your bank and lead your team?

Erik Bagwell: All right, let’s jump right in, our first clip that we want to play was with Lee Wetherington, Lee, I think he came on in the summer, he’s with Jack Henry talked about open banking and got a ton of good feedback on this show. A lot of folks reached out to us and said that they really enjoyed it.

Caleb Stevens: Yeah, I think that this was our most listened to most downloaded show of all time so far, which speaks a lot to Lee and his knowledge and his expertise of banking and really the future of banking where it’s going with payments, where it’s going with FinTech. And he’s really funny at the same time; he kind of makes big topics really simple and humorous at the same time, so let’s jump into that clip right now.

Tom Fitzgerald: So, Lee, talk about this real fast, why is a banker going to hear that and go, yeah, I get that, but why would I open up my customers to FinTech? And that has to be a big barrier, so talk about that real quick.

Lee Wetherington: That’s a great question and in fact, let’s go ahead and talk about open banking because I can tell you, in fact, we actually did primary research here at Jack Henry back in March. At the beginning of every year, we poll our both bank and credit union CEOs on a number of questions about what’s on their strategic radars and roadmaps for the next two to three years. One of the things that we asked them about was open banking, is open banking on your radar in the next two years, 55% of community financial institution CEOs said, no, it’s not on my radar. And then we asked them a follow-up question, why, why is it not on your radar?
And 19% of that, 55% said, well, I don’t know what it is and I don’t care, this is the kicker, I don’t care to learn about it. These are my favorite people in the world, by the way, the willfully ignorant, who realize what they don’t know and don’t care to do anything about it anyway, that’s another thing. But 33% of that 55% said, I don’t know what it is, but I’m interested in learning about it and then another almost proportionate segment there said that it doesn’t fit our strategy, which is when bells and whistles went off in my strategy team’s situation room. We were like, wait, wait, wait, it doesn’t fit their strategy, what do they think that open banking is?
Now, let’s go ahead and define it, so open banking is basically the idea that a consumer or a business, a customer of the bank can share their bank data, their financial data with any other, they can share it with whomever they want, whether it’s another financial institution, a FinTech, a third-party, for whatever reason, they can just share that information at will; they can permission it and share it, that’s what open banking is. Now, I want to unpack why I think that 55% of CEOs don’t know what it is and of those who think that they have an idea, most of them are wrong.
If you go back to the origins of open banking, it’s in Europe, and this was by regulatory mandate in Europe, so the European Central Bank, basically several years said, if you’re a bank or credit union in the European Union and your account holder wants to share their data with a third-party, you have to enable that, you have to make that possible. That was by regulatory mandate, so the first thing for a banker that kind of has heard about open banking, many of them think that’s a European thing that doesn’t have anything to do with the United States, I don’t have to listen anymore, I can just discount that.
Well, they’re wrong because we have an open banking ecosystem that’s not mandate-driven, but market-driven in the United States, and it’s driven by one simple fact and that is that financial institutions all the way up to the biggest ones, just like Chase have realized that they can’t innovate fast enough in and of themselves to satisfy every need of every customer in this evolving landscape. So, they have to open themselves up to an ecosystem that can help with that innovation burden, this is where the FinTech ecosystem comes into place.
That’s exactly what Chase has done and then that set off a competition between Chase and the other mega banks, et cetera, et cetera, et cetera, you have to be realistic, you can’t be all things to all people, by the way, to your question about, Hey, open banking that just sounds like if I do that, if I plum my bank into the open banking ecosystem, I’m just making it easier for my customers to leave my bank and go somewhere else. That’s what it sounds like just on the face of it but look, that cow is already out of the barn, 35 to 45% of American consumers now, already have multiple checking accounts with disparate financial service providers, some of them are chartered, some of them are not, that cow is out of the barn.
So, the strategic question is, how as a community bank or just any bank, how can you secure and maintain first app status for your customers? Be home base, be the primary financial institution in reality, not just because they happen to have a checking account with you, by the way, we need to talk about that too, what does that mean to be a primary financial institution these days? But your strategy as a bank is to secure and maintain first app status across all of the financial relationships that your customers have out there, that is cow out of the barn, acting like it’s not, and that if we plum into open banking, we’re just letting the cow out of the barn means that you don’t understand where we already are.
So, that’s the reality that banks are facing that I think that the strategic imperative is very, very clear, first app status, or we want to talk, we could go into crypto, by the way, first wallet status; that’s where you want to be and the only way to do that is to execute well on an open platform strategy. So, if you understand where we are, if you understand that there is an open banking ecosystem in the United States, if you understand that the plumbing of that ecosystem has emerged by way of financial data exchange platforms like Plaid, Finicity, Akoya, Yodlee, et cetera, those financial data exchange platforms which are basically API hubs that are connecting all financial accounts to all other accounts in the United States.
If you understand that you understand, one, I have to be plugged into that, and by the way, you asked the question was, what do we do in the next five years? You have to be plumed into the open banking ecosystem, and then you need to be focused on an embedded FinTech strategy, that’s the bottom line. In other words, get the platform in place, plum into the open banking ecosystem, do payments flow analysis of the payments data in my own bank to understand where my existing customers are already doing stuff with third parties.
In other words, what’s already relevant to them and then inverting the open banking rails and APIs to bring that stuff home, literally to aggregate it back into the bank’s native digital user experience. Now, I just said a very dirty word, I said, aggregation; this is another reason why a lot of bank leadership tune out here because as soon as aggregation comes up, they think screen scraping and screen scraping sucks. Screen scraping was the way of the past, it is brittle, it violates every best practice security protocol we’ve ever come up with; screen scraping is indiscriminate, these days, a lot of people don’t realize that they’re doing this even with Venmo.
You sign up for Venmo, you don’t realize it, but you’ve given Plaid a third-party, your banking credentials for them to log in as you and screen scrape everything, not just what they need for Venmo screen scraping and web crawlers are indiscriminate, so this sucks for a lot of different reasons. And so, a lot of times, again, people hear aggregation, they think screen scraping, they tune out but what they don’t know is how much of screen scraping has been replaced with standardized secure direct API connections between players, so the data it’s not brittle, it’s very durable, it’s reliable, and it’s permissioned and specific.
So, only the data that’s been permissioned to be shared is the data that’s actually being shared, not indiscriminate, by the way, just to give you a data point there, by the end of this calendar year, 75% of the financial data exchange that Plaid is facilitating will be being done by secured standardized APIs or application programming interfaces rather than screen scraping. So, if you thought that aggregation was dirty and ugly and broken for very good reasons, you were right in the past but you’re not right any longer about that.
So, if you discount that as a part of the infrastructure and the plumbing for this open banking ecosystem, you’re going to be blindsided by players who do understand that it is not only better today, but it is the only way to plum into this open banking ecosystem, and then be able to invert that with an embedded FinTech strategy.

Erik Bagwell: We were really excited to have this person on the show, Tom Michaud; he is the CEO of KBW and was very gracious to come on with us one afternoon. And Tom talks about M&A, tell a bit more about what we talked about with Tom, Caleb.

Caleb Stevens: Well, this one was one that you had to get on the books several months in advance because of how busy he is, so we really appreciate Tom joining us and a really good discussion, getting his thoughts on M&A particularly as it relates to coming out of COVID. When we recorded this back in the summer COVID was still sort of on the front burner in terms of there was the Delta variant and a lot of uncertainty still and M&A was still rebounding and Tom offers some helpful thoughts to bankers on how to be thinking about M&A as we go forward here. So, let’s go to that right now.

Tom Fitzgerald: We probably have a bunch of listeners that were contemplating M&A prior to the pandemic and of course, they put those thoughts, those ideas on hold. What would be your counsel to them now, as far as kind of getting back into either the acquisition side or the sales side? Is there urgency, do you see for them to kind of move at that now? Or would you still counsel some patience on that?

Tom Michaud: I think that there is urgency but first of all, let’s talk about the patience part. The patience part and the reason why I think that consolidation stopped is that there’s nothing scarier about not having your arms around credit quality at the time of consolidation. One thing that could really go wrong is if credit quality heads south, while you’re trying to put together a merger, I think that since we’ve moved beyond the greatest concerns of credit quality due to this pandemic I think that concern moment is off the table.
As far as urgency, we’re not only back on that pre-COVID pace, but even more so I think that it’s more intense, and so I would encourage bankers to look at this now because we are generally still a benign credit quality environment, the economy is ramping in the recovery and is expected to ramp even more. I think that if you were thinking about doing a deal have it consolidated before the economy really picks up, or maybe even before the next cycle may start to get built, I think that makes sense.
And then the other thing is that there are fewer options, having done merger work for several decades, the number of buyers or best buyers is shrinking as the industry shrinks, so sometimes if you’re thinking about buying a company, there are two or three targets that really stand out as great partners. If you’re thinking about selling, there may be two or three, three buyers that stand out. And if those companies go and do strategic things with other banks, then you’ve permanently lost that buyer or partner or target, and so I think that you have to be proactive, and so I think that there should be a sense of urgency if you think consolidation is part of your plan, both as a buyer or a seller.

Erik Bagwell: All right, our next interview that we want to highlight was with Al Dominick, Al’s the CEO of Bank Director. A lot of you guys see a lot of their research that they publish, they put on a choir or be a choir conference, a very, very popular conference, I think that they do it out in Arizona every year.

Caleb Stevens: Out in Phoenix in the winter time, so there’s no better place to be.

Erik Bagwell: That’s a good time to go to Phoenix, no doubt but talk about this interview.

Caleb Stevens: Yeah, this is one that Tom and I did together and Al has the opportunity like we do to spend time with bankers all over the country in all different states in all different sizes. And we really talked about what are some of the common hallmarks, common traits that all great community bank leaders have, and Al has some great thoughts. So, let’s go to that now.

Tom Fitzgerald: Well, Al, tell me, we have a lot of the C-suite executives listening to our programs and those that want to be C-suite executives listening as well. Through all of your experience and the work that you do, are there some characteristics or traits that you see in the great leaders in the community banking field?

Al Dominick: It’s a loaded question, it’s almost like, I’m a sweet eater, I love desserts, so it’s like you have just invited me into an ice cream shop and he said, okay, pick a flavor, so I have to pick one because there are a lot of different flavors of leadership that I think stand out right now. I think that empathy is really important and I think that we’ve seen over the last year and a half in particular that those leaders that can say sometimes you need a hand and sometimes you’re going to give a hand, stand out.
I think that you also have to think about those leaders, and again, it’s not about title, but it’s about your intellectual curiosity, are you looking at the world in a way that respects the amount of change that we’re going through? And instead of being afraid and paralyzed by new challenges, you get excited to learn more about them and I think that really strong business leaders really value that curiosity quotient. Hand in hand, I think that you have to be a lifelong learner, there are some great examples that I’ve come across in my career; one comes out of US Bank.
So, we were talking about Acquired Be Acquired briefly, this is an event that happens every January out in Arizona, the week before the NFL holds the Super Bowl and it attracts a really great and influential audience, but it’s a lot of content over a two and a half-day period. For years, I could set my watch to seeing one of US Banks outside directors in the front row with his notebook out, 15 minutes before anything started, whether it’s 7: 45 on a Sunday, 8:00 on a Monday, 8:15 on a Tuesday, and he would take notes and he would ask questions and he’d stay engaged.
And here you’re talking about somebody who is wildly successful in his own professional career, he was on the board of, at the time I think the third or fourth-largest bank, and he constantly was interested in what the smallest businesses were doing, what FinTechs were up to, not just what an investment banker was modeling out as what the next six months could give. And so, I think that there are people like that, that get up from their desk and out to see the world and business leaders that can do that I think are really effective.
But if we’re talking in the financial sector, there are other things that you have to have, you have to understand risk, you have to understand that risk is not a four-letter word in the pejorative sense, you have to make sure that if you’re doing things you’re not going to get sideways with your regulator, you have to understand the compliance concerns. So, risk management is big, developing a culture because culture is not something that you can force, but it’s something that you can be a part of and you can set the tone so that your team is inspired to do a little bit more.
Finally, it’s the simple stuff; you have to understand your shareholders and stakeholders and how to prioritize, and finally, if you’re not knowing how to allocate capital, I think that you’re going to have kind of a rough go of it. I don’t know how many points it is, in my mind, it’s seven, but maybe it’s a few more, maybe it’s a few less, but again, I think that good leaders combine all different facets of that framework in their own unique way.

Tom Fitzgerald: And I think that listening to you right now and just going through some of those traits, I was thinking that this past year, the empathy trait and that intellectual curiosity trait I think really have come to the fore because nobody knew how to handle a pandemic when it came upon us; the decisions that you had to make as far as staffing, do we work from home? How do we make that work, the work from home? And when do we start asking people to try to come back? I think that a lot of that is that empathy factor and as you said, that intellectual curiosity factor, boy, you may have been in the business for 30 years, but nobody was ever ready for what we’ve had in the last year

Al Dominick: No, no, in fact, somebody was talking to me about, they’ve gotten their MBA and they were really proud of that diploma hanging on their wall but last year was like a second MBA that actually counts. And so, when you think about what some of the takeaways of the last year and a half, it’s going to, I think manifest itself in the strategic planning discussions that are taking place. I think that, again, anecdotally there are people who have said I haven’t really approached strategic planning as I need to going forward, it can’t just be a one-off exercise in the fall.
It can’t be a glorified budgeting process, where I worry more about what I’m spending than what I could be potentially earning and I think that whole concept of how do I stay creative? How do I stay ambitious and not be constrained by the asset size of the institution that I’m a part of is becoming more of a discussion topic?

Erik Bagwell: All right, our next clip that we want to play is Renee Brooks, Renee is the COO of South State Bank, Renee was very gracious to come on, she is very busy. I remember this show because we did it at about 7:00 in the morning. She gets up and gets going early but Renee talks about digital banking, tell us a little bit more about what this was about.

Caleb Stevens: Yeah, this really provided some good insight and her thoughts on digital banking, especially from the consumer’s point of view, so the mobile app, your digital strategy, and she’s led the charge with the new banking app that we rolled out. I think that it was either late last year or early this year and she’s done an awesome job, especially when you think about combining CenterState and South State together, we were honored to have her and her time to speak into all things, digital banking. So, let’s go to that right now.

Tom Fitzgerald: Tell us what you’ve seen in the last 10 years, what are some of the major trends in digital banking that you’ve seen and have experienced?

Renee Brooks: It’s interesting, just sort of thinking back, so 10 years ago, the mobile app was just coming on the scene if you think about it, so when I think about how and I know our conversation is around digital, but let me just kind of say to start with. When I think about digital banking, I’m really thinking more strategically about the consumer, like how do we deliver service to the consumer? And so, when I think about that, I think about that consumer, that banking customer 10 years ago, and so when you think about digital banking back then, it was just online banking on their desktop and they got in and they looked at their balances, they may have transferred money just between accounts at their bank.
And the fastest money movement that we had was bill pay within your online banking platform but then over the last 10 years, just the pace of that mobile app adoption and really the pace of money movement. If you think about how fast you can move money today and not just small amounts, very large amounts instantaneously, and it’s not through the traditional wire system. So, I think that number one, just the rapid pace of what’s happened with the mobile app and having all kinds of abilities within that mobile app on your mobile device money movement.
And then when I think about our consumers, I think that one big difference is today that they expect 24/7, not only uptime on your systems but also the ability to move money and actually get banking done at any hour any, day of the week, so really that overall consumer expectation has really changed dramatically over the last 10 years.

Tom Fitzgerald: It’s funny that you say that about the pace of the money moving and the expectations, my mom is 76 years old and four months ago was mailing checks to folks for bills and I came in and said, Hey, let me show you how this works online and mobile. I got her an Apple phone, she loves it, she cannot believe it, she feels like she has gone to a different world with just being able to not just even see an account, but to see the bills get paid so fast and, move money and all that.
So, there is a stereotype though that digital banking has just been for younger generations, but that’s not the case, I’ve seen it with my mom, talk about that because I think that there are some stats out there and probably COVID caused this, but a lot of the older generation is actually getting into it so.

Renee Brooks: Well. And I think that the point you brought up about your mom, but what I’ve noticed with COVID, number one, I think that it kind of goes back to the consumer when I think about folks that are in the sixties, seventies, eighties I really think that if they’re going to adopt digital banking, it kind of comes back to how do, how do they do other things in life? How do they order goods and services?
Are they on social media? How many grandmothers and grandfathers, they get pictures of their grandchildren through Facebook and text and you know, Eric, just like you did with your mother, I think that’s what you’re finding folks were kind of helping them maneuver through it and then once you educate them, well, they love it. It’s absolutely love, but kind of interestingly here’s a stats, so we offer checking accounts through an online channel, and if you kind of look at the demographics, so 12% of our online checking accounts are folks that are 55 or older.
So, that’s through our online channel, then if you kind of look at the branches, it’s about double that, so, maybe more like 24, 25%, so maybe and this was data from last year, I think that my message is, the stats tell me they’re still opening online. And then to your point, I think that, especially with COVID, our older generations, were the ones that were most susceptible to something serious with COVID and it really forced them to make that change. And so, we have seen an even greater adoption as it relates to mobile deposits and just not coming in our offices anymore from that older generation.

Erik Bagwell: All right, let’s go next to Mark Galvin, Mark is the CEO of a company called ePresence and he is a social media wiz, kind of a social media coach, we even described him as, and he talks about how to grow LinkedIn. Talk about that real quick, Caleb.

Caleb Stevens: Yeah, Mark is kind of like the Lee Wetherington of LinkedIn, he’s really funny, but he also knows his stuff when it comes to social media and LinkedIn. And this was a great discussion about how bankers can develop new business using LinkedIn, of course, COVID has changed the way that a lot of us develop new business and do prospecting and Mark has some great thoughts. And at one point in the interview, I think that he actually did some analysis on my own profile that led to some helpful changes. So, let’s go to that now.

Tom Fitzgerald: Let’s, focus now, Mark, on looking at that bank executive, that’s listening to us and he’s navigated, probably a boomer, he’s navigated his career so far, probably when he came up, there was no such thing as LinkedIn there was nothing like Twitter. They might have an account; they might sign in and wish people a happy anniversary and good luck on the job promotion, but probably use it very little beyond that. As I said, they’ve kind of navigated to this point in their career, why is it important for them now to maybe turn up that presence that they have on their LinkedIn profile or other social media in general?

Mark Galvin: Yeah, the one reason is they’re going to get beat to death by their competitors if they don’t, so here’s an example. I have a friend who is a banker in Canton, Georgia, and his goal is to get more and more loans in, that is his mission, it’s a huge goal, I don’t know how he does it, but he does it well; when he goes in and he knocks on the door and tries to establish a relationship with a target. If that target goes on to LinkedIn to see more about him and they can’t find him, but they can find the competitor that competitor has a better chance of staying top of mind.
Also, he can establish himself on LinkedIn, like Caleb, you have a great presence on LinkedIn, so as I land on your profile and I see you your profile is going to reinforce something, if it’s not there, if it’s non-existent, it’s reinforcing nothing. So, you can control that message and now here’s the deal, people want to do business with people that they like know, and trust, so I trust Caleb because I can see him on LinkedIn, I can see what he’s done, I can see that he’s qualified; if we are not trying to enhance that message, control that message because you certainly can, then we’re missing an opportunity that’s becoming more and more ubiquitous.
Here’s what’s interesting about LinkedIn, Linkedin used to be the place you went for a job, they are now turning it into a database; it’s a business database where, Hey, you know what? Before when Caleb reached out to me, I pulled him up on LinkedIn and I’m like, oh yeah, I remember Caleb because maybe I don’t remember the conversations that we had well, and I can see who he is and it helps me connect to him better, that’s why you’ve got to do it. It really is crucial that we do a better job of communicating to our target audience, who we are through LinkedIn.

Tom Fitzgerald: And I think too, in this age of COVID and the social distancing, I would imagine the hit rate to profiles on LinkedIn have just gone through the roof in the last year or so just because people can’t meet face to face. And they’re going to say, let me pull this guy up and see what he’s got going on and I just can imagine that it’s just gone through the roof.

Mark Galvin: I tell a lot of people that the LinkedIn profile, and it is true, the LinkedIn profile picture’s the most important part of your profile, that kind of freaks people out. Tom, I see your eyes go, oh, oh, oh no, don’t tell me; it’s the most important part because Tom, if I meet you face to face, I’m going to walk up and I’m going to shake your hand and I’m going to look you in the eye and I hope that we get back to that. But that is what we did as humans, when I land on your profile for the first time, I still do that because I don’t cease being human because that’s what we do, culturally in the US that’s what we do, so you have to have a great profile picture.
If I can’t see your eyes in your profile picture, that’s a problem because I’m not able to connect with you and we’re emotional beings, again, human beings, it’s what we do, so I need to be able to see your eyes. If you don’t have a profile picture or you don’t show it to people that you’re not connected to, I’m not going to connect with you as well, so yeah, it is super important that that piece is really developed well.

Tom Fitzgerald: So, no sunglasses on your picture profile, right?

Mark Galvin: That’s a great point, yeah, no; you don’t do sunglasses and, by the way, don’t show your favorite school colors either. Oh yeah. So, Georgia grads in the state of Georgia, shouldn’t have a Georgia hat on because the Georgia Tech grad won’t do business with them.

Caleb Stevens: Yeah, good luck in grabbing their business and getting hired by the Tech grad. Well, I appreciate the kind words on my profile, Mark, because I think that often I’m like, man, I don’t think my bio is very good, I probably need to expand it, make it a little more catchy. For my headline should I say what I do or should I say my title? So, without giving away all of your consulting secrets give us just a few thoughts on what makes a great LinkedIn profile for someone who’s in the banking industry.

Mark Galvin: Yeah, I don’t mind giving away secrets quite frankly because I don’t mind helping at all, here’s the gig. Your number one place on your profile is your profile picture, so I’m looking at yours now and if anyone wants to pull up, you can define him his handle is Caleb Stevens 14, and if you understand handles; you’ll figure that one out. So, if you pull up Caleb, you can see that he’s in a jacket with a tie, the tie doesn’t make a difference anymore, doesn’t make at all; the jacket does make a difference, so wearing a jacket in your profile picture, you absolutely have to do even in banking.
And the reason is that we take profile pictures, we drop them into a crowdsourcing app where random people rate photos and they don’t know the person, what we find is jackets make a difference, ties do not, people who have a well-lit face get higher scores on competence, influence, and likability. The other thing is that I would crop your picture closer, so I mentioned eyes before; your picture is more or less it’d be like your bust-up, so your head and you’re about down midsection. I would crop that closer so that I can see your eyes better, eyes are so important, same picture, just crop it a little closer; the other thing that you should do is your headline is, helping community banks compete.
Well, I want you to go through an exercise, all of you that are listening, go to LinkedIn, hit that search bar, and type in the search terms for somebody you want to do business with, somebody that you need to provide a solution. So Caleb, if I didn’t know you and I know what you did, give me just two words that somebody would probably use to search for you if they didn’t know you.

Caleb Stevens: They would probably search correspondent banker, if they were a bank and they were looking for correspondent services in general that would probably be an easy one.

Mark Galvin: So, let’s take that, correspondent banker, if I go to the search bar and search for you, I’m not going to find you because that’s not in your headline and that’s that line right below your name, so these are just two words. I want you to come up with 20, so any of you out there come up with 20 words that are hard-hitting, hard skilled words that someone would use if they’re searching for you, so correspondent banker, there are a lot more out there that you could find and I tell you what, 20 words are hard and it’s meant to be hard.
So, you go hard skilled 20 words, then rank them, the first word is the most important, the 20th word is the least important, now that you have a roadmap; I want you to build a headline using as many of those words as possible and using the little vertical carrot key, which is over on the keyboard, on the right side, above the enter key. That’s the vertical key and why because it tells everybody that these are bits of data, these aren’t commas, so I’m not going to grade you for grammar.
So, it could look like this correspondent banker vertical bar, the next one could be commercial comma, residential comma, I’m making stuff up, this isn’t him, I’m just making this up for sake of time but you get the gist; that line will now make sure that you show up as somebody searches for you using those search terms.

Caleb Stevens: It’s kind of your identity in little bits and pieces in terms of what your title is, what you do, the problems that you solve, it kind of sounds like you’re; I like how you parse that out, I’ve seen folks do that before, it seems effective.

Mark Galvin: And don’t use emojis in the banking industry, I like to say, unless you’re in a circus, you don’t use emojis. So, no emojis, vertical bars and I tell you what, you can find my profile in it, it’s an example that you could use by the handle epresencemg, epresencemg altogether. So, and the way that these handles work, it’s, so epresencemg for me, calebstevens14 for Caleb.

Erik Bagwell: All right, next up we have Lisa Blatter, Lisa works for South State Bank; she is our Director of Campus Recruiting and Career Development, and Lisa was very gracious to come on and speak with us. And you and I, I guess that we did this around the time that we went and spoke to the interns we have at our bank, we have about, I guess, 20 to 25 college interns, they’re always really, really sharp and we’re impressed with them every year. And we went down to Atlanta or downtown and spoke to them, talk about what you and Lisa talked to out when she was on.

Caleb Stevens: Yeah, this was a fun show, the first half was Lisa and the second half were two interns that we got to speak to and hear about their summer experiences. This segment we’re going to play to you is from Lisa and she offers some thoughts on what are some of the essential ingredients; every great internship program needs to have at your bank. Even if maybe you don’t have a big budget for this huge internship program, it is important to invest in young talent and to develop that pipeline and Lisa offered some helpful thoughts. So, let’s go to that now.

Caleb Stevens: So, we have a lot of CEOs listening, CFOs, and listening executives of smaller community banks, and maybe they’re not a $40 billion bank like South State, so maybe the resources and the funding for a program like this maybe wouldn’t be quite what a larger regional bank might have. But certainly developing young talent and investing in your community is very important to our listeners and to the leaders that listen; any thoughts for them as they structure an internship program, anything that you think, Hey, if you don’t do anything else, here are a few things that I would recommend that you focus on.

Lisa Blatter: I would say keep it small would be the number one rule, keep it simple, you don’t want to necessarily have an internship that’s everywhere and as a company, what do you want to focus on? Is it building your business for the most profitable unit or is it just getting your name out there to say, Hey, we’re doing this for college students and we want to invite them in? If you start off small and you focus on what the mission is as your company’s objective and you align it to where you want these interns to sit, then you can customize the path at a more realistically inexpensive solution.
Luckily for you, I happened to have had experience with working with an internship with a company that had 500 employees, and then when I took this internship over, there was about, I think that there were about 2500 employees here and now we’re at about 5500 or 5300-ish. And so, we’re still taking it small, we’re taking it in bite-sized pieces and we’re spending time on the most profitable unit which happens to be commercial banking and once we get that done really well, we’ll go ahead and expand it.
A comment from David Salyers is, you don’t have to be bigger to be better, you have to get better to get bigger, so we have to be better at what we’re doing right now and focus on the greatness that’s here and then our program will get bigger.

Erik Bagwell: Now, let’s go to a clip from a discussion that Chris Nichols had with Patrick Sells, Patrick’s on our podcast before was with a bank, but now he’s with a company called NYDIG and Caleb talk about this conversation.

Caleb Stevens: Yeah, Patrick is the Chief Innovation Officer of NYDIG and one of the key things that they do is that they serve as a legal custodian of Bitcoin for banks. And so, this was a good discussion between Chris Nichols and Patrick about the role of Bitcoin in the banking system and what he sees in the future. So, let’s play a quick clip from that right now.

Chris Nichols: All right, so let’s talk about what a financial institution’s options are, I want to hear more about this, I think that the timing is fantastic, Bitcoin at 51,000 near its high we have Coinbase Direct Offering coming out. I think that’s supposed to be the largest one since Facebook, the asset class of cryptocurrency is a trillion-dollar asset class now. So, you can say that it’s a fringe asset class only for so long and I think that now is the time where you have to say, no, no, it’s real, it’s going to be around for a while. Give us your take and tell us about the bank options.

Patrick Sells: Yes, definitely, I think that we are kind of entering into a new era of all things Bitcoin and cryptocurrency, even, so our research shows that today over 25% of Americans own Bitcoin alone. And if we look at recent market data, we see with PayPal obviously, that news got a lot of attention, 17% of their users bought Bitcoin in the first 30 days. Or I think that earlier this week, Goldman said that 40% of their clients already have exposure to cryptocurrency, so I think that today where we are cryptocurrencies and Bitcoin in particular is here to stay.
And I think that what’s really exciting is that the consumer wants banks to play a role in this, and so what we know over the last century or two, Americans have always been able to turn to their banks for a kind of safe keeper of their financial assets and really a Sherpa and a guide to helping them understand their way around the financial world. And up until this point, many banks couldn’t do much to help you, if a customer walked in and said, Hey, I have some Bitcoin, they probably don’t know what to tell you what to do with it or how to get access to it and I think that the industry is changing, it needs to change and it’s actually happening very quickly.
And I can’t help but wonder that when 2021’s written if it won’t be an era and a chapter in our history of the greatest innovation and adoption of new technology like cryptocurrency. And so, more specifically there are, I think many ways that banks are starting to think about how they too can engage in this space, obviously, the regulators have come out recently and given some new guidance as to specifically what certain banks can do in this world around like acting as a custodian for their client’s assets.
But I also think, and this is something that we’re really focused on at NYDIG is how do we partner with banks to help them offer products and services in a way that’s very safe and compliant with all the regulations. And so, like in our NYDIG acts as the legal custodian and we work in kind of a sister relationship if you will, and can power a range of products from buy, sell, hold to Bitcoin rewards cards and savings accounts where you can elect to get paid interest in Bitcoin.
I think that there are also many banks that are beginning to think about what does this or what could this mean from the world of payments, Visa and MasterCard have both come out in that space. And so, I think overall, there are a lot of options for banks and everyone’s quickly while the cement is wet trying to figure out kind of what can they do and how do they do it and recognizing that when you go ask your customers, a surprising amount own this, and want you to play a role in it. And that’s really encouraging to me as a former banker that like consumers, want banks to play a leading role in this new technology and asset class.

Chris Nichols: Now, isn’t the very genesis of crypto though, Bitcoin in particular kind of the antithesis of banking, why now and what’s the convergence? Shouldn’t I want to be away from banks and away from the US government and away from everything, shouldn’t it be offshore, tell us about where it fits in today’s world.

Patrick Sells: I definitely think that part of the early adopters of Bitcoin definitely would’ve espoused that belief and that view; I think that though my understanding of Bitcoin and the more that I’ve spent time really sitting in it and thinking about it would present a different view, a radically different view in that Bitcoin solved the problem for the world that we needed to be solved. And that is an open-source monetary network that isn’t controlled by someone else or the supply, in particular, isn’t controlled, so one of the things about Bitcoin that I find so beautiful and that I think is rare as a form of money is that there truly is a finite supply.
Nothing can change the fact that there can only ever be 21 million Bitcoins and I think that especially as a kind of modern-day American, I haven’t had to think about my US dollars in that light or that context until last year when all of a sudden the government decides to print 3 trillion more dollars. There’s a stat out there that since March of last year, 35% of all US dollars ever in existence have been printed since March, and today we’re printing the same amount of dollars as all Americans working combined, and so when you think about, when we go back to middle school, supply and demand.
If supply is something that I can’t control and someone else at a whim can actually change it, points to a very volatile form of money, and so Bitcoin in its early inception, in kind of its original design I should say, was here is a finite store of value. And it’s going to take advantage of network theory and what we know about networks, which is the more users there are, the more valuable the network becomes and so in that light, I don’t actually think that Bitcoin is the antithesis of banking or should replace banking or replace central banks.
I think that it’s a perfect complement to a central bank kind of driven economy, a monetary system that we live in, and so I think that obviously, there are some out there who would see it differently, I think that many of us and part of what we’ve seen in the great rise and excitement and adoption of Bitcoin this year, or the last 12 months has been around really that understanding of Bitcoin. So, I would probably point to kind of a different outcome if you will, of the origins of Bitcoin and why what’s happening today is happening.

Erik Bagwell: All right, the last clip that we want to play is with Jack Hubbard, Jack is with St. Meyer & Hubbard; Jack does sales, training, and strategy. And we actually have taken some of the stuff that Jack said, taken it to heart, and are trying to implement it here in our division, Caleb, talk about what we discuss with Jack.

Caleb Stevens: Yeah, Jack’s got a wealth of wisdom and knowledge, he talks a lot about BEC, Blended Environment Conversations, and all about that, part of it is on Zoom and part of it’s in person and what does that look like in the future? And so, as you said, we’ve really taken a lot of Jack’s wisdom to heart as we kind of think about our 2022 plan in terms of growing what we do and helping customer banks all over the country. And so, let’s go to that right now.

Jack Hubbard: We’re in a very interesting time now, and we’re calling it BEC, Blended Environment Conversation, if you look at the statistics, here’s what’s going on. Some people, including CEOs, CFOs, senior executives, banks, people that bankers want to meet are saying to themselves and to the community, we’d like to work from home a couple of days a week because we got used to it. We now are sharing childcare, what are we going to do with the dog that we adopted during the pandemic and et cetera, et cetera, so I think that the mistake that some bankers are making is that they’re looking at this as a Zero-sum game.
When we talked a year ago, we had just launched our program called Remote Relationship Development, the video training series about how to have a conversation like we’re having today in a remote kind of way, we had about 4,000 bankers subscribe to that, which blew us away. We thought, well, our clients will take advantage of it, et cetera, but they were in the thousands, as we go back and say to bankers now, oh, do you want to renew? A lot of them are saying, no, we’re good because we’re out selling face to face, I think that’s a mistake; this hybrid model, this BEC, Blended Environment Conversations model, I think is going to be around for a long, long time because we’ve gotten used to it.
And we now know better how to do it, I’ll give you a quick case study; we have a bank that we work with where a resource manager, not a relationship manager, but a resource manager went to a doctor on a virtual call and said, I’d like to talk to you about your relationship, et cetera and so it got to the point where the doctor said, you have some interesting things to say here. It’s a little different than my current bank, I’d like to get all my doctors together and in a virtual call on Zoom, the doctor got seven other doctors in the Zoom room together, and the banker was able to close the business, not over the computer, but as a result of using the computer, BEC, he went out and did some face to face calling but there are some blended environment situations here with virtual.
I’ll just tell you one other thing that I think is that’s happening for sure and that is this whole idea around net sharing events are coming back, now you notice that I didn’t say networking, it’s net sharing, in my mind, if it’s work, it isn’t worth it. I think that what we’ve taught people in the past is to go out and work the room, go out and have an elevator speech, well; those are as antiquated as black and white television. What we really need to be thinking about is when we go out into a face-to-face environment, as we will, what value am I providing? How do I customize my introduction?
How do I make sure that I’m providing value, not working the room because it’s better to be interested than interesting? So, whether it’s on a hybrid model and a virtual model or a face-to-face model, I think that the change in selling is a forever kind of approach.

Caleb Stevens: And you talk about the BEC, Blended Environment, I would imagine, and I’d love to hear your perspective on this, that prior to COVID, that would be a much bigger challenge from a technology standpoint and from a comfort level standpoint for a lot of bankers and having gone through COVID though. It wasn’t fun though, it was sad in many respects and it was difficult and there are some bright spots and there was a lot of learning to be had and maybe some new opportunities and new doors that have been opened because of it. That’s kind of my take on it, what do you think?

Jack Hubbard: Don’t disagree at all? In fact, what we’re seeing is that business is being closed on a hybrid kind of basis and the interesting thing is that the business that is being closed is actually higher on an average basis. Larger deals are being closed on a hybrid kind of basis but one of the things that you did mention, and we talked about this a year ago is the importance of two things, technology, and training. And we found in a study, this was after we launched our program, that 70% of CEOs suggested in a survey that we did, that they had not provided the tools or technology, the training, and the computerization at home that the bankers needed to be effective.
And when we asked why, they believed that it was a short-term thing, so back to our model, if we believe that this is a forever issue, I think that executives need to realize two things. Number one, there are going to be weather-related issues, there are going to be childcare-related issues that are going to cause the banker to have to be at home from time to time, they need to skill-up, and we need to provide the technology. But there’s one more subtlety that a couple of our community banks are doing, and this is really powerful, they’ve created what they call a Zoom room in their office, they’ve set up what you’ve set up in your studio; they have microphones, they have good lighting, they have good computers.
And so, when someone wants to go in and make a call, they can use that room in a hybrid kind of way at the office, and still set up in a way that’s going to be very professional, now here’s, what’s really powerful and we can all agree, ooh, that’s a really good idea, but here’s where marketing has come in. Marketing said, okay, in the room, let’s put some posters behind the banker, so let’s say that they’re calling on a veterinarian; let’s get some quotes from service-related industries, doctors, et cetera, so that in the background, what the veterinarian is seeing is quotes about how wonderful the bank is.
Then maybe in the afternoon, a different banker’s calling on a manufacturing company, they change out the posters to make it manufacturing. I think that this whole pandemic as tragic as you have suggested, and certainly is, has made creativity and innovation in banking kind of come to the forefront and people are starting to realize, Hey, these bankers aren’t as boring as I thought they can really do some pretty good things.

Tom Fitzgerald: Jack I had a guy tell me one time, he’s actually an insurance salesman and he made the comment, he said, yeah, salesmen; they don’t ever have wives that are not pretty because they’ll talk to anybody. And that’s the only thing that I ever remember that guy telling me as I sat in an interview with him for probably over 45 minutes, but there’s probably a lot of truth to that. Talk about cold calling and it’s something that I don’t care how good a salesman you are, it’s probably not your favorite thing to do, what are some effective ways people are cold calling now?
I’m assuming that picking up the phone, a lot of folks don’t answer the phone anymore, emails, I delete probably 20 emails a day that are basically cold calling emails. What are you seeing today that’s effective?

Jack Hubbard: Well, we’ve sent and received more emails in the past year than in our history, a billion emails go out every day and that’s increased during the pandemic because, by very nature, it had to but let’s talk about cold calling. We have rejected any bank that wanted to have us teach their bankers how to cold call, in a relationship-based environment cold calling is about the worst thing that I can imagine, except for blitzing, this is another thing that bankers do.
So, we get a bunch of bankers in a room together and we beat our heads against the locker and we have a motivational speaker and we go get them tiger and then we each get thrown out of about five buildings in the day, and the next time that we do blitzing, we look in the mirror in the morning and we go, oh God, it’s blitz day. And you know what’s really interesting, the buyer looks in the mirror and goes, God, I hope a banker who I don’t know from a bag of donuts will come in and tie my entire business up for about 30 minutes, that’s what blitzing and cold calling could do.
Now, having said that, there are some things I believe that you can do effectively; one of them is, and you had the amazing Brynne Tillman on a couple of weeks ago and one of the things that she may have talked about, and if she didn’t, I know that she does it herself, and that is video messaging. So, one of the things that we’ve seen bankers do really effectively, is you can send a video message to a first-degree connection only, so that’s forced the bankers to get out and connect with them.
Number two, when you send that, you can send a six-second to one-minute message during that message if the banker provides something of value, says something of interest, says something that piques the curiosity of the buyer, the buyer is much more likely to respond. So, what’s an example of that? If I call a manufacturing company and I say in the past year, during the pandemic, we’ve helped three manufacturing companies increase their cash flow by an average of 17% and I’d like to share some tools that might help you be able to do that as well, and put some money in your pocket.
The likelihood is that they’re going to call back versus hi, I’m a new banker in the area and I’d like to come out and learn a little bit more about your business, a trainee hat is not put on the buyer here, we don’t need that, what we need is the buyer is looking for value. And so, there are some ideas that you can do; I’ll tell you one other thing, Eric, that I found to be really effective and that is what we call combo prospecting and what simply that means is that I send an email and then I follow up with a voicemail.
Or I send a voicemail late in the evening and I follow up the next morning with an email that kind of says a little bit more extensively of what I said in the voicemail, but either way, if you want to do cold calling the real key, the one word that’s a key to get your calls returned is curiosity. Because becoming a commodity by telling everybody that it’s always good to get to know another banker, I’d like to come out and show you how I can save you some money on your banking, those things aren’t going to cut it anymore.


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