A perspective from Travillian’s Head of Banking and Fintech, Brian Love.

Last weekend I was invited to speak at the Bank Holding Company Association’s Spring Seminar , “Time to Soar”, held in Edina, Minnesota. Let’s be honest: “Soaring” in this economic moment is an optimistic sentiment, given the perfect storm of shrinking margins, rising rates, and bank failures. Banks are possibly more “sore” right now than soaring. However, every entrepreneur knows that the best time to seize an opportunity is when your peers may be hunkering down. A few of the speakers at the seminar made me reflect on community bank recruiting trends and best practices.

Risk talent is alarmingly hot.

Gary Svec of Performance Trust told bankers in the room to consider ways to be proactive with the balance sheet, so there’s no regret when the market rebounds. He also stated that institutions should take their ALM processes more seriously, even advocating a deep dive into their deposit models. I agree and expect increased demand for financial risk talent related to assets and liabilities, liquidity, interest rates, and capital management in 2023 and 2024. Over the last year, we’ve executed a good deal of senior compliance and BSA searches, which reinforces that this risk trend has legs. Banking by its definition is the risk business, so make sure you don’t accidentally sabotage yourself by not bolstering the ranks.

To win talent, you have to pay up and know the habits of your competitors. 

Several executives I talked to at the conference remarked on the escalating price of talent, as well as the inability to find or attract “A” players.  These two topics are totally related: if banks are serious about winning the battle for talent you’ve got to be prepared to spend. Also, importantly, you’ve got to be aware of the trends, cultures, and behaviors of your competitors. For instance, when we helped two community banks successfully lift-out an SBA team and a C&I lending team, respectively, candidates cited their incumbent banks decrease in lending output or a tightening on credit practices as the reason they left. Lenders will move when they can’t get deals done, or their proverbial faucet gets turned off. In another situation, a toxic workplace, rife with conflict and a more reactionary culture, made it easier to lure an executive away from a bank that was much more established than our client.

Foster innovation to create new business lines… and attract tomorrow’s clients.

It’s not a newsflash that excitement around banking fintechs has dwindled due to regulatory uncertainty (cemented last week by the FDIC’s issuance of a consent order to renowned tech-friendly player, Cross River Bank). However, a panel at the BHCA Seminar led by Blake Crow, Des Moines Market Leader at Eide Bailly LLP, featured three bank executives who have utilized innovation to propel their forays into consumer lending and payments channels. One of them, Dave Hales, CEO of Global Innovations Bank ($50 million in assets based in Keester, MN) told me how excited he was to land what he hopes will be the first of many fintech partnerships in his BaaS program. I invited two CEOs that I greatly admire, Erik Skovgard, CEO and President at Lincoln Savings Bank and Brian Johnson, CEO at Choice Bank, to be on my panel, and we discussed their bank’s continued commitment to BaaS. Their focus is on banking tomorrow’s customers through long-term, intricate relationships with fintechs like Acorns and Current.

Overall, while the current economic climate may not be conducive to banks soaring, it is a crucial time for community banks to bolster their risk management teams to prepare for the future. To attract and retain top talent, banks must be willing to pay up and be aware of their competitors’ habits.

Additionally, fostering innovation and forging partnerships with fintechs can create new business lines and attract tomorrow’s clients. The banking industry is constantly evolving, and those who adapt and innovate will be the ones who thrive in the years to come.

Key Takeaways

1. Risk talent is in high demand and banks should focus on bolstering their risk management teams to prepare for the future.
2. To attract and retain top talent, banks must be willing to pay up and be aware of their competitors’ hiring trends and practices.
3. Fostering innovation and forging partnerships with fintechs can create new business lines and attract tomorrow’s clients. Those who adapt and innovate will thrive in the future.