Tag: bank regulation

For community banks, marketing often points to finding ways to educate, support and grow community, as well as customer knowledge and awareness.

True relationships withstand the test of time, and such is the case with the community bank/customer connection. It’s not unusual to hear about a community bank having served a family or a business for generations, and that’s a testament to the strength of the relationship.

As we consider marketing in this month’s issue, I took time to reflect on exactly what differentiates the community banker and how marketing can help in growing and retaining business. I kept coming back to the fact that for community banks, marketing often points to finding ways to educate, support and grow community, as well as customer knowledge and awareness. By extension, these promotional efforts assume a natural role in a community bank’s journey, just enhancing what are already mission-critical initiatives.

Where I’ll be this month

I’ll be connecting with community bankers from around the country at ICBA LIVE in Honolulu, Hawaii, from March 12–16. I hope to see you there!

For example, consider ICBA chairman Brad Bolton’s Community Spirit Bank in Red Bay, Ala., and its work to share tips for financial resolutions in the local paper. Offering that information to the community helps individuals strengthen their financial savvy and supports a broader story of community bank leadership.

Or look to ICBA past chairman Bob Fisher’s bank, Tioga State Bank in Spencer, N.Y., and how it teams up with local television stations to support cause-related activities, like the No Shave November Cure the Blue 5K. Not only does this event help raise funds for an important program, it also demonstrates the bank’s commitment to its community.

These examples offer only a snapshot of what community banks all over the country do to support their communities from a mission-based approach. In many cases, the added promotion these efforts deliver is a side benefit to serving the community.

That’s precisely why these efforts are successful: They garner attention because they are the right things to do. These stories create a value proposition around why banking with a community bank is so vital, and the differentiation from megabanks and credit unions happens by leading with the community bank relationship model front and center.

So, as you think about your bank’s planned storytelling this year, know that ICBA is standing by to help. In fact, stay tuned for a very exciting announcement that we’ll be making during ICBA LIVE, which will shine a light on what differentiates community banking. And our work won’t stop there. We invite to you join us as we continue to tell the community banking story.

Because beyond marketing, what you do matters to the customers and communities you serve. You are and will remain a partner through your customers’ lives and financial journeys. From a marketing perspective, that’s an ideal place to be.

Rebeca Romero Rainey
President and CEO, ICBA
Connect with Rebeca @romerorainey

Photo by Ismail Rajo/iStock

The time has come for the long-awaited FedNow launch. As community banks navigate this process, there are plenty of resources available to answer questions and provide guidance.

By Colleen Morrison

Between May and July of this year, non-pilot instant payment transactions will be live on FedNow, the first new Federal Reserve payment rail in more than 40 years. After much strategy, planning and discussion, the implementation phase has arrived.

“As we near launch, I’m reminded of where we started,” says Nick Stanescu, senior vice president and business executive of the FedNow Service. “The decision to build the FedNow Service was the result of a multiyear initiative of collaborating with the industry to explore ways to modernize the U.S. payment system.”

He notes that the launch of FedNow will represent a major landmark in modernizing and improving the U.S. payment system. “Importantly, this will level the playing field by allowing financial institutions of every size to benefit from safe and efficient instant payments,” he adds.

Three sources of information on FedNow

As community banks look to take advantage of this new opportunity, they seek resources to help them navigate the journey. With that in mind, industry experts agree there are three key sources of information to support banks in honing their instant payments plans.

1. FedNow Explorer

The Federal Reserve launched the FedNow Explorer to help financial institutions establish their individual evaluation and implementation needs. Offering a guided journey, a self-explore option and a quick link to resources, this site incorporates the latest news and information from the Fed about FedNow. In particular, the Service Readiness Guide and the Service Provider Showcase provide insights into preparation requirements and available solutions.

“You have to educate yourself; you have to educate your employees and your management team. So, starting off with the FedNow Explorer has a lot of great resources,” says Sherri Reagin, chief financial officer at FedNow pilot participant North Salem State Bank, a $590 million-asset community bank in North Salem, Ind. “We even showed one of the videos at our annual training to all of our employees. They’ve heard me talking about FedNow for a couple of years now, but they didn’t fully understand it until there was a visual. There are so many great resources on that website where people can really get started.”

2. Your Federal Reserve account executive

The Federal Reserve account executive stands as a valuable resource for asking bank-specific questions about the FedNow Service and can benefit community banks that want to be early adopters. For example, Stanescu points out that there are four core capabilities of instant payments readiness that a community bank’s Federal Reserve account representative can help evaluate:

• Connectivity to FedNow
• Real-time posting and immediate funds availability
• Settlement through either a Fed master account or a correspondent’s
• Send and receive functionality

Each area creates important decisions for the bank, and the Fed account executive can help financial institutions navigate the pros and cons.

“Your Fed account executives are great places to start, as well as your technology solution providers, based on the product lines you think are going to use FedNow,” says Kari Mitchum, vice president of payments policy at ICBA.

3. Core and third-party providers

To that point, solution providers will play a crucial role in implementation from the core system to downstream customer-facing applications. Community banks will need to decide their required functionality in receive-only or a send-and-receive scenarios and work with their providers accordingly. For most, that process starts with talking to their cores.

“My advice: Build a plan, understand what partners must be involved and do a lot of exploring with vendors,” says Debra Matthews, chief of deposit operations at $2.1 billion-asset Texas First Bank in Texas City, Texas, a FedNow pilot participant. “Explore what your core has available and plans to do in the future and determine if any additional third parties are needed for implementation.”

Reagin agrees, emphasizing the enhanced role that core providers will play to accommodate FedNow. “Everything we do, all the fintechs that we use—if you’re going to settle a payment, it has to go through your core provider to get through your system,” she says. “So, they’re going to have to be involved, regardless of who you use to interface between the Federal Reserve and your financial institution.”

Instant payments will soon be table stakes

While the FedNow Service will launch in just a few months, the wide-scale rollout will take some time, and customer adoption will follow suit. However, if market history bears any indication, instant payments will be a critical part of payment processes in the future.

“Keep in mind Apple Pay has been out for almost 14 years, and QR codes were created in 1994. FedNow coming out is not going to be some overnight change,” Mitchum says. “There’s that story from [FedEx founder] Fred Smith that he had the idea for FedEx in the 1960s, and the paper got a ‘C’ on it. They said, ‘Nobody wants stuff next day; there’s no need for this.’

“Now we’re in the time of Amazon same-day delivery, two-hour delivery. But that doesn’t mean that we got rid of USPS. It doesn’t mean we got rid of two-day shipping. There are multiple choices for moving goods; there’s going to be multiple choices for moving money.”

But with the rate of change in today’s digital space and this immediate gratification environment, it won’t take long for demand for instant payments to accelerate.

“I think FedNow is going to transform the way that we do business, and the way that businesses operate in the future.”
—Sherri Reagin, North Salem State Bank

Use cases like early wage access, P2P payments and insurance disbursement have already emerged, and others will continue to develop. Community banks that don’t begin exploring instant payments may find themselves at a competitive disadvantage more quickly than they might think.

“Financial institutions need to really learn the benefits of FedNow to be able to accelerate the services that we can offer to our customers. I think FedNow is going to transform the way that we do business, and the way that businesses operate in the future,” Reagin says. “The sooner we can get our customers and our employees acclimated to it, it’s just going to skyrocket.”

Colleen Morrison is a writer in Maryland.

I am grateful to have had the opportunity to serve as chairman. I will continue to advocate for community banking, and for the rest of my career, stand side by side with you to fight our future battles.

Serving as ICBA chairman has been one of the highest honors of my life. It’s hard to put into words how special this experience is. The work you’re doing every day puts real faces and names to the communities we’re fighting for, and it has been a privilege to be your representative at the national level.

Yet, it takes the voices of many to make a true impact. That’s why I’ve asked community bankers to sacrifice a few minutes every day to advocate for our industry. We are what stands between our customers and an overreaching federal government and regulatory system. We hold the line for Main Street America, which needs us.

My top three

Reflections on community banking:

1. Never take our community bank mission for granted; advocate for it.
2. Keep innovating and implementing new technologies for your customers.
3. Someone at your bank wants to lead it for the next generation. Let them.

In today’s environment, that vigilance is critical to staying ahead of emerging threats. Each day brings forward new concerns, and we have to stay focused on who we are and who we represent. So, keep pressing forward in defending this great industry we get the opportunity to serve.

For example, every community banker has a primary focus on how they can better serve their customers. It isn’t about making more money, but how we respond to community needs. We should also remind policymakers that community bankers are small business owners, too. And even though we have fiduciary and regulatory responsibilities to remain profitable and provide a return to our shareholders, our focus always comes back to how we can serve our customers better. In maintaining that focus on our relationship-centric mission, we will continue to thrive.

That’s why it’s vital for community banks to remain independent, and a big theme for me has been encouraging bank executives to identify their next generation of leaders. There are those within your institution who share your vision and passion. Support their development and groom them to take the reins. Without your bank, your communities are at risk. So, make a succession plan to ensure your bank remains the lifeblood of the community.

With that in mind, I implore you to keep fighting for Main Street. Keep raising your voices to advocate for your customers. Keep engaging with innovative companies to grow, evolve and better serve. Keep identifying future leaders to ensure the longevity of your institution, because your communities need you in their corner.

I want to close by saying I am grateful to have had the opportunity to serve as chairman. I will continue to advocate for community banking, and for the rest of my career, stand side by side with you to fight our future battles. With that passion leading, I’m confident we’ll witness the continued growth and success of our beloved industry.

Brad Bolton, Chairman, ICBA
Brad Bolton is president and CEO of Community Spirit Bank in Red Bay, Ala.
Connect with Brad @BradMBolton

BankOnBuffalo president Michael Noah says the bank’s mobile branch will provide service to those who don’t have easy access to banks. Photos by Luke Copping Photography

BankOnBuffalo has hit the road with its new mobile bank, BankOnWheels, to meet the needs of underserved communities.

By William Atkinson

This past November, BankOnBuffalo, a division of $5.5 billion-asset CNB Bank headquartered in Clearfield, Penn., added a new branch to its preexisting lineup of 12 branches and offices in or around Buffalo, N.Y.

Where is this newest office located? Well, it depends on the day of the week. The $1.1 billion-asset community bank division based out of Buffalo built and outfitted a “rolling branch,” called BankOnWheels, an innovative banking experience that makes full-service banking accessible to more consumers and small businesses, particularly those in underserved communities, according to BankOnBuffalo president Michael Noah.

“We are providing banking options in areas that have been known as ‘bank deserts,’ which is very important to us as a community bank.”
—Michael Noah, BankOnBuffalo

The first of its kind among financial institutions in western New York, BankOnWheels is a full-service bank branch within a 34-foot recreational vehicle. It enables the community bank to deliver essential banking services to communities that previously had little to no access to them. “We are providing banking options in areas that have been known as ‘bank deserts,’ which is very important to us as a community bank,” Noah says.

All the bells and whistles

The mobile branch has all the essentials to fill that void. BankOnWheels includes a walk-up ATM and two exterior teller windows where transactions can be performed and a platform desk is located for customers to speak with a bank associate.

“Anything you can do in one of our branch locations, you can do in the BankOnWheels.”
—Michael Noah, BankOnBuffalo

Inside, it has most of the features of a traditional bank: a lobby, teller window and an office for private conversations with a BankOnBuffalo associate.

“We saw the need, and we were eager to get the BankOnWheels rolling across our community,” says Noah. “Even with the rapid rise of technology allowing so much banking to be done remotely, research told us that consumers and business owners still greatly value branches where they can have face-to-face conversations with bankers, get answers to their questions and receive the assistance they need with transactions, loan applications and account openings.”

BankOnWheels has all the technology and services that the community bank’s brick-and-mortar locations do, including wire transfers, an ATM, a teller cash recycler and an instant-issue debit card machine. “Anything you can do in one of our branch locations, you can do in the BankOnWheels,” Noah says.

BankOnWheels evolved over several years as bank executives spoke with and listened to community leaders.

“People didn’t ask for another bank location that the community couldn’t get to,” Noah says. “They wanted a way to bring the bank to the people and make it more accessible for the community. That really was the evolution of BankOnWheels: listening to and responding to the community.”

Building a branch

The planning process took more than two years. “We were involved in a ground-up planning process, similar to opening a new branch,” says Noah. “The project evolved over time, because we had to make sure that BankOnWheels had all the necessary capabilities of one of our branches.”

BankOnBuffalo worked with local vendors to build and outfit the inside of the RV. A firm called Mobile Facilities LLC built the mobile banking unit, and multiple vendors were engaged in wrapping and servicing BankOnWheels. “This was an extensive process undertaken to bring the final product to the community,” says Noah.

The community bank uses its existing branch staff to operate BankOnWheels, with four to five employees working on rotation, two at a time. “This creates a consistent client experience from a very well-trained and versatile team,” Noah says.

As for security, BankOnBuffalo vetted and selected a third-party security firm, based on the firm’s ability to manage the complete security process and protect the community bank’s employees.

“They work closely with local law enforcement and our corporate security team,” Noah explains. In addition, a professional security team from the security firm drives the RV and provides comprehensive security for BankOnWheels and its staff when they’re on the road.

Expanding its footprint

When the branch first became operational, it began serving three communities through its deployment in Niagara Falls and Buffalo.

Within weeks of opening, BankOnBuffalo gained new customers in these areas and began opening new accounts. Based on the results and additional input from the communities, the bank plans to add other sites to the list in the future and keep this show on the road.

William Atkinson is a writer in Illinois.

By Lindsay LaNore, ICBA

The theme for ICBA LIVE 2023 is “Light the Fire. Light the Way.” As leaders, that’s a huge part of what we do: spark enthusiasm, encourage creativity and guide our teams on the paths to success. But inspiration doesn’t always happen spontaneously, or even daily, so it’s incumbent upon us to develop strategies and create environments that inspire and motivate our teams, all while making sure we stay inspired ourselves.

Here are some great tools for cultivating inspiration.

1. Remove limitations. Sometimes a project or task seems, on its face, to have restrictions. But we can often remove those perceived limitations, be experimental and think outside the box. Yes, this could result in a few errors, but it might also generate successful new ideas or strategies. Let your team know that it’s OK to fail.
2. Don’t forget to dream. This idea is inspired by the book The Dream Manager by Matthew Kelly, and it’s a powerful message to share with your team. Encourage everyone to start a dream book, to write down their dreams (both professional and personal), and to dream without limits. The book can serve as a resource to remind us of the dreams (big or small) that we have, and that reminder can jump-start the enthusiasm needed to begin or continue a task.
3. Focus on strengths. Lean into your employees’ strengths and talents, and they’ll feel naturally more authentic and empowered. Cultivating a strengths-based environment increases creativity and productivity.
4. Focus on team bonding. On average, a full-time employee spends 40 hours a week working with the same people. Don’t underestimate the value of team-building exercises to bring them together. If they’re in the thick of a project, invite them to take a break, pose a fun question to the group or play a quick game. Fostering camaraderie cultivates a stronger team. Colleagues who are invested in each other will look forward to working together.
5. Make motivation a topic. Adopt “Motivation Monday” and ask the team to talk about what motivates them. Ask them how they find inspiration personally. This can give leaders and fellow colleagues a beneficial understanding of what each employee values.
6. Let people do their jobs. No one wants to be micromanaged. Allow for autonomy where possible and be clear in your words so that employees know they are empowered to do their job. It shows a level of trust and respect, which generally leads to higher job satisfaction and greater productivity.
7. Show appreciation. We’ve said this before, but leaders must show appreciation for the work their team is doing. It goes a long way.

But above all, remember that employees are individuals. What inspires or motivates one may not be as powerful for another. So, tailor your tactics to suit both your team and the individuals within it.

Lindsay LaNore (lindsay.lanore@icba.org) is ICBA’s group executive vice president and chief learning and experience officer

Valley Bank offers financial literacy education to women through Hoving Home.

Valley Bank is working side by side with Walter Hoving Home, a place of refuge for women struggling with addiction and other personal challenges, to offer residents financial empowerment.

By Roshan McArthur

For Valley Bank in Wayne, N.J., success brings with it an obligation to help others succeed, too. The near century-old, $57 billion-asset community bank believes deeply in financial empowerment, not just for its customers but for the most vulnerable community members, too.

For more than five years, Valley Bank has worked with Walter Hoving Home, a community nonprofit organization in Oxford, N.J. Hoving Home is a faith-based facility that helps mostly low-income women recover from issues like drug addiction, alcoholism, abuse, prostitution and human trafficking. In the 56 years since it was founded, the nonprofit has grown from one home in Garrison, N.Y., to six branches throughout the U.S., helping more than a quarter of a million women find their feet again.

“Hoving Home has provided them a safe place to recover from these situations, to reestablish themselves so they can reenter society, gain custody of their children and be productive,” says Karen Austin, Valley Bank’s VP and market manager. Austin initiated the relationship in 2018 after a chance encounter with one of Hoving Home’s team members during a conference at a local university.

“Valley was able to enter into this relationship by providing financial empowerment to the women who are residents of Hoving Home,” she explains. Over the years, that empowerment has taken the form of grants, donations of equipment and volunteer hours. In June 2022, for example, the community bank’s team members took part in a beautification day with shovels, rakes and “a lot of sweat equity,” preparing for the nonprofit’s annual graduation ceremony at its Oxford site. Valley Bank also provided laptops and printers for a new computer lab, and its property management group donated desks and cubicles from branches and departments that were being renovated to a new learning center.

“Our opportunity is to reach those who need it the most and provide a service so that, when they are able to regain their lives, they’re going to be able to make informed decisions and know there’s advocacy available to them.”
—Karen Austin, Valley Bank

“Having a local impact is something that’s very important for us,” says Bernadette Mueller, Valley Bank’s EVP for corporate social responsibility. “We want to be viewed as partners in our local communities, serving not only the people who live there but the people who work there, our whole constituency in that area, whether that be community groups or households.”

Creating a path forward

In addition to donations and volunteer hours, Valley Bank also provides financial literacy education as part of Hoving Home’s Career Readiness Program. Using a Consumer Financial Protection Bureau curriculum called “Your Money, Your Goals,” Austin teaches nine one-hour sessions to the women, covering saving, spending, budgeting, credit, debt management, managing financial setbacks and more. She also makes a point of keeping her students informed about current events that illustrate why financial literacy is so important.

These days, she is reaching more women than ever. “I used to do the sessions in person in Oxford, N.J.,” she recalls, “so I would drive on a weekly basis from an office in the Wayne area, an hour and a half up to Oxford, and then back another hour and a half home to my house. When COVID hit, that changed everything. And I became a little bit more effective at using Zoom. So, I conducted Zoom classes for the individuals in Oxford.”

At the beginning of 2022, the director of Hoving Home asked her if she could conduct classes for its other facilities as well: two in Garrison, N.Y., one in Pasadena, Calif., and another in Las Vegas. By teaching virtually, Austin has expanded Valley Bank’s reach nationwide.

“I feel that we as Valley have to support our local community, wherever and whoever that might be,” says Austin. “And our opportunity is to reach those who need it the most and provide a service so that, when they are able to regain their lives, they’re going to be able to make informed decisions and know there’s advocacy available to them. I feel Valley has played an extraordinary part in that, and I’m grateful to be part of that work.”

That gratitude runs deep, says Mueller. “Our people, across the board—from the facilities and the property management people loading desks, to the tech people setting up laptops—have been feeling the same way, just feeling so good about what they’re doing,” she says. “We’re getting much more than we’re giving.”

Roshan McArthur is a writer in California.