SAN DIEGO–Two bankers and a credit union executive offered their thoughts on how each is approaching the challenges of growing their respective businesses, how they are addressing pain-points, and and even how “reverse-mentoring” is working at one institution during a panel discussion here.
The trio were part of a presentation to memebers of the media and others during D+H’s Connections 2015 conference here.
Participating in the discussion were Mark Nelson, CIO for the $600-million Horicon Bank in Wisconsin; Angel Gonzalez, commercial relationship manager with the $3.8-billion Centerstate Bank in Lakeland, Fla.; and Erica Erdozain, VP-commercial lending with the $632-million Seattle Metropolitan Credit Union. The discussion was led by D+H VP-Marketing Lindsay Sanchez.
Below is some of the Q&A discussion featuring common challenges, unique market issues, different approaches, and more.
Q: Talk about your market segments and challenges:
Seattle Metro’s Erdozain noted the credit union has expanded beyond its initial FOM of city employees to being able to serve anyone in the state of Washington. That has meant, especially in a market full of technology-related companies—beginning with Microsoft—that members have high expectations about service delivery and technology.
Erdozain, who is new to credit unions after having joined Seattle Metro in December of 2014, observed, “My background is in commercial lending, and one thing that has been very interesting to me is the level of engagement in credit unions. I wasn’t sure what to do with that at first, but I have found there is a loyal following of members. So we’re not even marketing to the commercial members at this point. Most of our loan apps come through telephone or online apps. That’s an adjustment for me as I’m used to doing business face-to-face.”
Erdozain noted she is a department of one—plus a consultant—and she has had to adjust to the organizational capacity of the credit union and herself. Nevertheless, she said Seattle Metro has booked $50-million in participation loans as it seeks to diversify its income streams. But she also noted, “What I had hoped would be 18-month process is going to be three years.”
Centerstate Bank’s Gonzalez said his bank is working to adjust to the diversity of the state of Florida, which has grown to 20-million people. The bank’s footprint stretches from Jacksonville in the Northeast across the rural and agricultural markets in the center of the state and south again to the highly urbanized South Florida. To be responsive, it has sought to push decision-making to the local levels.
Another challenge for the bank, which has grown more than six–fold in the last decade due mostly to acquisitions,
“It’s a very diverse market and we are growing quite a bit, so how do we continue to maintain the customer experience that is part of our core, best in class service philosophy?” he asked. “How do we maintain the feeling of a community bank, while also expanding into correspondent services. Part of this is quick turnaround times, and having happy faces who are involved in their communities, which means they have to time away from the desk.”
Horicon’s Nelson noted the challenge most “near and dear” to his heart right now is cybersecurity.
“We have a lot of customers and we really have to build relationships and trust that these transactions that we are pushing to the phone are really going to be secure,” Nelson observed. “The phone is where we have to be now; I don’t know where we are going to be in five years. We have to be in position to be able to move quickly. As an older bank, unfortunately, our staff is a little older, too, so succession planning is important. Our commercial lenders are getting older and we don’t have people in the pipeline. So we are putting a lot of work into that and mentoring younger people. I also have some younger people who are reverse mentoring me. They say, this (technology) is cool. Then I have to find a way to see if we can take that and make it work for us.”
Q: Where do you see growth in next years?
Erdozain said that she grew up on a family-owned business so “commercial lending is near and dear to me. But also staying relevant as we grow and in our market is really important. To me it’s about the meaningful relationships we have built over time. I know lots of financial institutions say ‘We’re different,’ but absolutely being able to execute on that is critical. Being able to help people, even if I’m not able to provide the solution, is important. I have tagged my department as Business Solutions. Most credit unions tend to focus on Business Services, but I t hink Business Services is what we did 10 years ago.”
Like Erdozain, Gonzalez stressed Centerstate Bank’s focus on being more than just about transactions and instead about relationships. He shared the story of a visit with a relative who asked Siri on his iPhone to turn on his lights at home, and it happened, and added, “That’s what a banker needs to be able to do. We need to do more looking at their personal financial transacations and then turn those into a relationships. We need to have the technology to help us to do that efficiently.”
Nelson said growth at his own bank has been slower than at other FIs, as Horicon Bank hasn’t made as many acquisitions as others have. But those acquisitions bring their own challenges.
“What happens is the bigger you get the customer base changes, so instead of having a $3 million a year business to provide services to, suddenly we’re seeing a $10 million or $30-million business that is looking to us for solutions,” Nelson said.
Q: Are there any areas you see as a distraction from being able to focus on other areas of growth?
“I found it interesting at an earlier all-staff meeting to look at the demographics of our institution that we tend to be on the younger side, and we still have a level of diversity,” answered Seattle Metro’s Erozain. “We are working with some consultants and working on a rebranding and a strategy.”
She noted the practice at online retailer Zappos where employees who are not willing to embrace the change being put forth are paid to leave. “We may not do that, but if we have people who have outgrown their job, then their role to find a job role that is better fitted to their needs,” Erdozain said. “We expect to significantly expand our employee base going forward. You can tell those who are willing to adapt and those who are not willing to adapt and who dig in their heels, a nd we will have to manage through those situations.
Nelson said what he hates to here are the words “We’ve always done it that way. Sometimes I get into these meetings and they think I’m a little four or five year old, because I’m always asking ‘Why?’ I want all of our people to use all of our solutions, and just getting some of our internal staff to adopt I (is challenging). I have been told we can’t order them to use it, so I am highly encoaurging them. You can’t sell it if you don’t use it, and if you don’t use it it’s not going to come from the heart.”
Gonzalez touched on a similar theme. He noted that when his bank first rolled out the D+H’s CreditQuest solution across the bank it did so from a “backroom,” or top-down perspective. It learned a lesson in the process.
“The benefits were not communicated to the front room and that’s where we got pushback,” he said. “So we put together a task force for three months, and D+H was tremendous throughout this process, and they came and met with us as we tried to comb through the issues creating pain for the front office. And they made changes, for instance, to little things that made it more user-friendly. Long story short, we ended up rolling out a modified CreditQuest and our loan officers felt they were more a part of the process. I’d say almost 100% of our commercial loans are now being entered in CreditQuest. We were able to turn that negatve into the positive by bringing folks to the table and letting them feel like they have a voice.”