Andy Cecere and Richard Davis at U.S. Bank Stadium
With U.S. Bancorp’s leadership transition underway, the big question is whether it will deliver faster earnings growth — the one shareholder demand that has proven elusive Inside handoff
March 2017 americanbanker.com
ABM0317_Cover_Final.indd 1 2/2/17 6:15 PM 0C2_ABM0317 2 2/2/2017 10:36:53 AM Contents MARCH 2017 / VOLUME 127 / NO 3
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Briefi ngs BankThink 5 Car Dealers Get Hip 20 Learn to Self-Disrupt 6 The Pay Puzzle Scott Raskin of Spigit says 8 Pruning Risky Loans bank executives should constantly brainstorm with all employees to foster a BankTechnology culture of innovation 14 9 Core Inevitability Fearful banks hesitate on BackPorch needed core conversions, COVER STORY but what’s riskier — keeping 24 Quotes from Supreme legacy tech or replacing it? Court Chief Justice John 14 Game Time Roberts, Jay Sidhu of Andy Cecere takes over in a tricky period for Customers Bancorp, and U.S. Bancorp. Its shares trade at a significant 10 A Zelle of a Premiere more premium compared with most of its peers. The big-bank backers of But the pressure is on to accelerate earnings a new P2P option get a growth. Can he deliver on the one shareholder chance to correct past IN EACH ISSUE demand that has proven elusive even for mistakes 4 Editor’s Note Richard Davis to achieve? 13 Bots Everywhere Once banks get comfortable with them, American Banker (ISSN 2162-3198) Vol. 127 No. 3, is published monthly by SourceMedia, One State Street Plaza, 27th Floor New York, NY 10004. Subscription price: $119 per year in the U.S.; $139 bots will be working in for all other countries. Periodical postage paid at New York, NY and additional U.S. mailing of ces. POSTMASTER: send all address changes to American Banker, One State Street Plaza, New York, every department NY 10004. For subscriptions, renewals, address changes and delivery service issues contact our Customer Service department at (212) 803-8500 or email: [email protected]. Send editorial inquires and manuscripts to American Banker, One State Street Plaza, 27th Floor, New York, NY 10004. This publication is designed to provide accurate and authoritative information regarding the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering nancial, legal, accounting, tax or other professional service. American Banker is a registered trademark used herein under license. © Copyright 2017 SourceMedia, Incorporated and American Banker. All rights reserved. www.americanbanker.com.
MARCH 2017 AMERICAN BANKER 1
001_ABM0317 1 2/3/2017 9:23:54 AM What’s going on americanbanker.com @ Keeping nancial services professionals updated on vital developments and focusing sharply on their most important concerns
MOST READ MOST SHARED BANKTHINK Trump Team Signals BBVA Compass Why the #BankBlack It Will Oust Cordray Faces Crucial Test Movement Is Working A top of cial with the Trump The new CEO, Onur Genc, Teri Williams of OneUnited administration said former fresh from Turkey, will have Bank rebutted critics of the U.S. Rep. Randy Neugebauer to nd a way to leverage the initiative to increase deposits was under consideration to many tech and innovation at black-owned institutions, run the Consumer Financial investments BBVA Compass citing research on the bene ts Protection Bureau in place of has made and strengthen its for people in low- to moderate- Richard Cordray. U.S. presence. income communities. Waiting for the Return BBVA Compass’ new core platform promised to make it a better bank, but returns since the late 2012 rollout have sputtered
10% Return on average assets Return on average 9 tangible equity 8 7 6 5 4 3 2 1 0 4Q3Q2Q1Q 4Q3Q2Q1Q 4Q3Q2Q1Q 3Q2Q1Q ’13 ’14 ’15 ’16
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Established 1836 One State Street Plaza, 27th floor, New York, NY 10004 Phone 212-803-8200 AmericanBanker.com Emails [email protected] Volume 127, No. 3 Editor in Chief Marc Hochstein 212.803.8887 Tanaya Macheel 212.803.8268, Midwest Jeffrey Dembski 847.498.4520 Executive Editor Managing Editor Dean Anason 770.621.9935 Ian McKendry 571.403.3857, Jacob Passy West Sara Culley 831.438.8408 Bonnie McGeer 212.803.8430 212.803.8209, Allison Prang 212.803.8614, Southeast David Cleworth 843.640.3713 Group Editorial Director, Regulatory Policy Copy Editor John Reosti 571.403.3864, Gary Siegel Rob Blackwell 571.403.3834 Marketing Manager Neil Cassidy 212.803.8440 212.803.1560, Jackie Stewart 571.403.3852, Executive Editor Bonnie McGeer 212.803.8430 Deborah Vanderlinder 212.803.8323 Kevin Wack 626.486.2341, Senior Art Director Senior Editor Alan Kline 571.403.3846 Nick Perkins Bryan Yurcan 212.803.8753 Group Director Custom Marketing Solutions Editor at Large Penny Crosman 212.803.8673 Art Director Virginia Wiese 704.987.3224 Technology Editor Robert Barba 212.803.8640 Group Editorial Director, Banking/Capital Markets Robin Henriquez BankThink Editor Joe Adler 571.403.3832 Richard Melville 212.803.8679 Associate Director of Classified Sales Contributors Kristin Broughton, John Engen, News Editor Andy Peters 404.500.5770 JoAnne Kao 212.803.8325 Kevin Wack, Bryan Yurcan Community Banking Editor VP, Content Operations and Creative Services CIRCULATION/CUSTOMER SERVICE Paul Davis 336.852.9496 Paul Vogel 212.803.8832 Subscriptions [email protected] Contributing Editor Daniel Wolfe 212.803.8397 Customer Service/Renewals Director of Creative Operations Digital Managing Editor [email protected] Michael Chu 212.803.8313 Christopher Wood 212.803.8437 212.803.8500 Copy Editor Neil Cassidy 212.803.8440 Chief Executive Officer Douglas J. Manoni VP, Research Reprints For information about reprints and licens- Deputy Editor, BankThink Dana Jackson 212.803.8329 ing content, visit www.SourceMediaReprints.com or Chief Financial Officer Michael P. Caruso Mary Wisniewski 323.380.5248 contact PARS International Corp. 212.221.9595. Chief Revenue Officer Marianne Collins Reporters/Producers Kate Berry 562.434.5432, ADVERTISING EVP & Chief Content Officer David Longobardi Kristin Broughton 212.803.8755, Lalita Clozel VP Sales, Banking & Payments Director of Content Operations Chief Product & Audience Officer Minna Rhee 571.403.3855, Brian Collins 571.403.3837, Dennis Strong 212.803.8372 Theresa Hambel 212.803.8245 Chief Marketing Officer Matthew Yorke Brian Patrick Eha 212.803.8715, John Heltman SVP, Conferences & Events John DelMauro 571.403.3847, Brian Lewis 212.803.8442, N.Y., N.J., Conn., Penn. SVP, Human Resources Ying Wong Yong Lim 212.803.8463, Liesbeth Severiens 212.803.8691
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0B3_ABM0317 3 2/2/2017 10:36:56 AM Editor’s Note BY BONNIE McGEER
Make Sure Your Digital Strategy Creates Value Bankers are no longer thinking about whether to build new and better ways of analytics. In particular, a structured debt doing business; rather they are puzzling over exactly how to do so. instruments marketplace called SIMON A lot of projects so far have been about keeping up with customer expectations. But connects brokers seeking debt solutions at most that just helps maintain value. Going beyond that is essential to gain a com- with banks that issue them. petitive advantage and create value. Oering competitors’ products So as the industry undergoes a digital transformation — and ntech challengers en- through SIMON might seem risky, but the croach — make choices about where and how your bank can best compete in this stratey has been paying o, with Gold- evolving ecosystem, then invest accordingly. The point is to create a digital stratey man rising from fourth to rst in struc- that fuels shareholder equity, said John Lester, a partner at Oliver Wyman and co- tured note issuance over the last three author of a new report that addresses this topic. years, according to the report. “I think the real question CEOs should be asking, and I’m sure are beginning to be In the third model, “component sup- asked is, ‘What is the value we’re getting from all of these digital initiatives?’ And I pliers” focus on being the best in what think for too many incumbents, the answer is, ‘Not a lot so far,’ ” Lester said in a video they oer. They invest in consumer in- discussing the report. “What we’re exploring is a way to reorganize and rethink the sight to design new products and retool way you do digital transformation so that you actually drive towards value directly, in existing ones, and plug into as many po- a systematic way.” tential customer experiences as possible, Digitizing all aspects of the businesses generally results in spending a lot and do- including nontraditional ones, the report ing nothing really well. Instead, the report, titled “The State of the Financial Services said. Low cost, low cycle time and spe- Industry 2017: Transforming for Future Value,” suggests picking one of three business cialized expertise are all important here. models as a way to help dene goals and choose technoloy best suited to add value. Salesforce.com is one example. It of- In the rst model, “demand aggregators” provide a frictionless experience that fers automated plug-and-play sales and helps customers with all aspects of lling a particular need, like buying a car. This marketing tools via the cloud and incor- might entail partnering with other providers to oer services the bank doesn’t. porates established technoloy, includ- The report cites USAA’s Auto Circle as an example. Over the past ve years, USAA ing Amazon Web Services, Slack and went from simply providing auto nance and insurance to assisting customers through Microsoft’s email platform, the report the entire car-shopping process. It partnered with the comparison website TrueCar to said. As such it covers the whole sales and allow customers to shop for and purchase cars online. marketing spectrum, rather than just one Car shoppers spend most of their time deciding what to buy, then often take what- component, making it more compelling. ever loan the dealer oers during the purchase. By inserting itself into the process as Strategic approach aside, going digital customers compare cars, and oering nancing and insurance options in real time, is essential to serving millennials, who USAA set itself up as a preferred provider, the report said. Since the launch of Auto are less likely to adopt current prod- Circle, USAA’s penetration of its customer base for auto loans has more than doubled. ucts, and less likely to acquire products In the second model, “platform providers” that already process massive amounts through established distribution models, of transactions leverage those capabilities on behalf of other companies. Platform the report warned. providers earn fees, so the more interactions they facilitate between customers and But regardless of target audience, the product providers, the better. key is to focus on providing value to The report listed Uber, Airbnb and eBay as examples. Within the nancial services people’s lives, rather than getting caught sector, payments networks and stock exchanges are both platform providers. up in the next big technoloy craze. And A lesser-known example that the report cited is Goldman Sachs’ Marquee platform, choosing where to invest starts with which launched in 2013 to provide access to the global investment bank’s proprietary knowing your own value proposition.
4 AMERICAN BANKER MARCH 2017
004_ABM0317 4 2/3/2017 1:33:37 PM Briefi ngs AUTO LOANS | COMPENSATION | COMMERCIAL BANKING
of complexity. Auto Finance Shifts But in one recent sign that change is coming, Ford Motor Credit announced Into the Digital Age that it is enabling shoppers to buy vehi- cles and nance their purchases online. The Dearborn, Mich., automaker’s nancing arm is starting with a single Ford offers car shoppers THE TRADITIONAL CARSHOPPING EX Ford dealer in Ohio, but it plans to roll a way to buy online and perience — visiting showrooms, negotiat- the program out to more locations over set their own loan terms ing a price and enduring long waits in a time. The idea is to o er U.S. car shop- windowless o ce — is widely loathed. pers — who spend an average of 10 hours By Kevin Wack Yet it has endured, even at a time when researching their purchases online, consumers can buy nearly anything else according to an Ernst & Young report online in minutes. from 2015 — the option of transacting There are numerous reasons why. from the comfort of their own homes. A car is a big purchase. It typically in- Last fall, Mercedes-Benz’s nancing volves multiple transactions, including arm also began allowing car buyers to a loan. An auto dealer, a lender and the arrange nancing through a mobile app. carmaker all have roles, adding layers Lee Jelenic, director of mobility at
MARCH 2017 AMERICAN BANKER 5
005_ABM0317 5 2/2/2017 3:09:42 PM Ford Motor Credit, said the auto industry In recent years, some companies, in- In September, shortly after Wells was by the scandal, Wells already had an em- must adapt to consumers’ changing ex- cluding the electric car maker Tesla, have penalized, the Oce of the Comptrol- ployee morale problem. pectations. He cited research that found sought to eliminate middlemen from the ler of the Currency announced a review Now the tilt toward a heavier reliance today’s car buyers make an average of 1.6 car-buying process. of sales practices at all of the large and on base pay could mean a pay cut for visits to the dealership, compared with By contrast, Ford Motor Credit and midsize banks it supervises. So the OCC those retail bankers who account for an ve visits a decade ago. AutoFi are keeping U.S. auto dealers at apparently did not object to Wells’ new outsized share of the company’s sales. “We’ve seen a huge shift in consumer the center of their business plans. Over compensation plan, which should ease So retail banking chief Mary Mack has behavior,” Jelenic said. “And we want to time, the industry’s shift toward e-com- the industry’s fears of a major shift in another reason to worry that her most stay at the forefront of that.” merce could yield substantial bene ts for regulatory expectations. productive employees might look for As part of that eort, Ford Motor auto dealers, as they may be able to oper- Here are three other takeaways from new jobs. Credit is partnering with a two-year-old ate with fewer employees. Wells’ new pay plan. Wells did not release enough informa- startup called AutoFi, which has devel- Hernandez envisions a future in tion to determine how big the pay cuts oped a platform for nancing automobile which many consumers opt to arrange • The plan should make employee could be, but Chief Financial Ocer John purchases online. That platform will be nancing online before they ever step misconduct less common and easier Shrewsberry said in an interview that integrated into Ford dealers’ websites. foot in the dealership. to detect. Mack was cognizant of employee reten- Ford Motor Credit also made an undis- The new plan eliminates sales quo- tion as she was designing the new pay closed nancial investment in San Fran- tas, which were blamed for creating a plan. “Mary believes that she’s got the cisco-based AutoFi. pressure-cooker environment in which tools to retain the highest-performing Under the partnership, consumers An Indication widespread sales abuses took place. It people,” Shrewsberry said. “She thinks who want to shop online will have the op- also leans more heavily on salary, as op- tion of customizing their own loan terms. On Incentives posed to performance-based bonuses. For example, if customers want to make Rivals relieved as Wells The company said that for tellers, base bigger down payments, in order to re- Fargo retains incentive pay pay will account for more than 95% of all duce the amount they owe each month, compensation. they will have that choice. THE REVISED PAY PLAN THAT WELLS In addition, there is greater emphasis The Definitive Home for “We put the consumer in charge of Fargo adopted in the wake of its phony- on the performance of an entire branch, constructing their own deal, versus hav- accounts scandal is not as radical as some as opposed to individual employees. For Banking Intelligence ing the dealer do that for them,” said Kev- other banks feared it could be. entry-level bankers, incentive pay will in Singerman, AutoFi’s chief executive. Banks large and small had been wait- be based entirely on team performance, Initially, consumers will only see - ing anxiously to see how regulators’ the company said. For most other posi- nancing oers from Ford Motor Credit. expectations would change after Wells tions, the majority of the opportunity for But over time, AutoFi’s goal is to present disclosed that employees had opened incentive pay will be based on team per- up to three oers from various lenders millions of unauthorized accounts over formance. that the dealer has chosen to put on the a period of years. The worry was that Those changes reduce the motivation network, Singerman said. the San Francisco bank, on a short leash for employees to cheat. The option to transact remotely gives with its regulators, would eliminate “As a rule, team measures are much consumers more control than they have performance-based pay, putting pressure less of a risk for those kinds of bad behav- had until now. Traditionally, when a car on other banks to follow suit. iors,” said Mark Blessington, a sales and buyer arranges nancing, auto dealers Wells is keeping many details under marketing consultant in Asheville, N.C. shop among a variety of lenders, but they wraps, but the revised plan appears Wells also said that it will be doing American Banker delivers world class banking and financial content to a top do not share all of the information with to align the $1.9 trillion-asset company more proactive monitoring to ferret out C-Suite audience of influencers, while offering unparalleled coverage of all the customer. more closely with the rest of the industry, bad behavior, including new oversight at the key issues facing the world’s financial sector. For traditional lenders, this new real- consultants said. Notably, the new plan the regional and corporate levels. These ity may present an opportunity or a com- does not get rid of incentive pay, which steps should protect against the possibil- With unique insights and analysis, in-depth indsutry coverage, and a unique petitive threat, depending on how quick- has long been a staple of compensation ity that branch-level employees will get banking industry database, American Banker stands out one of the most ly they can adapt to the market changes. plans in retail banking. away with breaking the rules because comprehensive and respected voices in the financial media. “What consumers are increasingly “I think the construct was not that their managers are looking the other way. looking for is to be the ones that are in radical, and I’m happy that it wasn’t,” AMERICAN BANKER A TRUE INDUSTRY LEADER command of the transaction,” said Ro- said Darryl Demos, an executive vice • Wells is trying hard to hold onto berto Hernandez, a partner in the con- president at Novantas. “They could have its top-performing employees. sumer nance practice at PwC. easily overreacted.” Given the reputational damage caused
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006_ABM0317 6 2/2/2017 3:09:44 PM In September, shortly after Wells was by the scandal, Wells already had an em- that she’s captured the ability to reward, The revised plan bases incentive pay penalized, the Oce of the Comptrol- ployee morale problem. attract and retain the best talent.” partly on how much a customer uses ler of the Currency announced a review Now the tilt toward a heavier reliance Wells spokeswoman Mary Eshet said Wells products. It also looks at whether of sales practices at all of the large and on base pay could mean a pay cut for that the company’s new compensation customer balances grow over time. midsize banks it supervises. So the OCC those retail bankers who account for an plan limits the amount of incentive pay “It’s not about how many accounts apparently did not object to Wells’ new outsized share of the company’s sales. that can be earned in most retail banking have you opened, how many new prod- compensation plan, which should ease So retail banking chief Mary Mack has positions. But she also maintained that ucts or solutions have you sold. But the industry’s fears of a major shift in another reason to worry that her most the plan provides competitive earning rather, it’s about attracting new primary regulatory expectations. productive employees might look for opportunities. customer relationships to the bank,” Here are three other takeaways from new jobs. Shrewsberry said. Wells’ new pay plan. Wells did not release enough informa- • Questions remain about some of Those changes drew mixed reviews tion to determine how big the pay cuts the new metrics that Wells will use to from outside observers. • The plan should make employee could be, but Chief Financial Ocer John calculate incentive pay. Demos, the Novantas consultant, said misconduct less common and easier Shrewsberry said in an interview that Under its old pay plan, Wells provided that it makes sense to emphasize cus- to detect. Mack was cognizant of employee reten- a sales credit to its retail banking employ- tomers’ product use, as opposed to just The new plan eliminates sales quo- tion as she was designing the new pay ees regardless of whether the customer sales, in an incentive pay formula. “This tas, which were blamed for creating a plan. “Mary believes that she’s got the ever used the product. That gave employ- one approach, if they’d put that in place, pressure-cooker environment in which tools to retain the highest-performing ees an incentive to open unauthorized might have kept them out of hot water,” widespread sales abuses took place. It people,” Shrewsberry said. “She thinks accounts that might never be used. he said. also leans more heavily on salary, as op- posed to performance-based bonuses. The company said that for tellers, base pay will account for more than 95% of all compensation. In addition, there is greater emphasis The Definitive Home for on the performance of an entire branch, as opposed to individual employees. For Banking Intelligence entry-level bankers, incentive pay will be based entirely on team performance, the company said. For most other posi- tions, the majority of the opportunity for incentive pay will be based on team per- formance. Those changes reduce the motivation for employees to cheat. “As a rule, team measures are much less of a risk for those kinds of bad behav- iors,” said Mark Blessington, a sales and marketing consultant in Asheville, N.C. Wells also said that it will be doing American Banker delivers world class banking and financial content to a top more proactive monitoring to ferret out C-Suite audience of influencers, while offering unparalleled coverage of all bad behavior, including new oversight at the key issues facing the world’s financial sector. the regional and corporate levels. These steps should protect against the possibil- With unique insights and analysis, in-depth indsutry coverage, and a unique ity that branch-level employees will get banking industry database, American Banker stands out one of the most away with breaking the rules because comprehensive and respected voices in the financial media. their managers are looking the other way. AMERICAN BANKER A TRUE INDUSTRY LEADER • Wells is trying hard to hold onto its top-performing employees. Given the reputational damage caused
d31417_ABHouseAd_7x5.indd 1 6/2/16 4:25 PM 6 AMERICAN BANKER MARCH 2017 MARCH 2017 AMERICAN BANKER 7
007_ABM0317 7 2/2/2017 3:09:44 PM But Jay Freeman, a former Wells ex- “We’re trying to become the bank that Carmichael, who became CEO in No- ecutive who was involved in formulating we’ve communicated we want to be,” vember 2015, said he means to position incentive pay at the company, expressed Greg Carmichael, chief executive of the the company for the credit cycle in the skepticism about basing a branch em- $142 billion-asset Fifth Third, said in an years ahead and to increase prots. ployee’s incentive pay on how frequently interview. High-risk loans “tend to be fall- In the past year, the company’s aver- customers use products, or whether ing trees in your backyard, so to speak, age yield on interest-earning commercial their account balances grow over time. and create anomalies in your earnings.” and industrial assets increased 21 basis “I’m not sure exactly what a branch Total loans at Fifth Third shrunk 1% points to 3.33%. employee does to impact this metric,” from a year earlier to $92.9 billion as “The big thing is that you have a new Freeman said. “Wells needs to be clear the company pulled back on business management team that is much more fo- what it is they are asking people to do or lending. In the coming year the Cincin- cused on improved protability and low- they will get random activities and behav- nati company plans to remove another er risk throughout a credit cycle,” said ior across the branches as individuals try $1.5 billion in commercial loans from Peter Winter, an analyst with Wedbush to sort this question out for themselves.” its books. Securities. — Kevin Wack “It’s the smart thing to do, in antici- Winter noted that a spike in the pation of whenever the next credit cycle benchmark London interbank oered comes,” said Gerard Cassidy, an analyst rate helped Fifth Third exit high-risk re- with RBC Capital Markets. lationships more quickly than expected. Commercial Regions Financial in Birmingham, Higher rates on commercial loans dur- Ala., also reported a decline in total loans ing the fourth quarter encouraged some Cleaning as it continues to scale back on its partici- borrowers to pay down or renance their Regional banks unload pation in shared national credits in cases loans too. risky commercial loans where it does not already have a relation- “The new management team is look- ship with the borrowers. ing to smooth out earnings” after run- BANKS ARE SCRUBBING THEIR Total loans at the $126 billion-asset Re- ning into a slew of commercial credit commercial loan books, ditching high- gions fell 0.2% from the previous year to problems after the nancial crisis, risk borrowers before the industry’s $80.6 billion. Winter said. nearly pristine credit quality takes a turn A few other big regionals, such as In the year ahead, Fifth Third plans to for the worse. PNC Financial Services Group and BB&T, expand its commercial loan book by 2% During the fourth quarter, regional reported modest fourth-quarter loan even as it pulls back from major credits. banks such as Fifth Third Bancorp and growth. Total commercial loans were $57.3 billion Regions Financial cut back on some riski- During earnings conference calls, as of Dec. 31. er commercial lending, including ener£y- bank CEOs have said that optimism The company predicts strong growth related credits and leveraged loans to among business clients has increased in its specialty loan divisions, including heavily indebted companies. following the Republican sweep in the for health care, telecommunications and Fifth Third said it unloaded $3.5 bil- elections and the rising momentum for leisure. Loans for manufacturing and au- lion in commercial loans in 2016, includ- tax cuts and deregulation. It remains to tomotive companies are also expected to ing about $1.2 billion in the fourth quar- be seen if borrowing will ramp up in the grow, Carmichael said. ter. Executives cited concerns about the months ahead and meet the bullish ex- Fifth Third will continue to “take a quality of the borrowers and whether the pectations for business loans. pause” on commercial real estate loans, company was being adequately compen- Fifth Third and Regions have gone citing concerns that the market is over- sated for the risk it was taking. against the grain, making a concerted heating. Analysts describe the moves as pru- eort to shrink their commercial loan Analysts noted that now is an ideal dent. Credit quality across the industry books. time for Fifth Third to reposition its remains strong, providing an opportune Fifth Third began scaling back on balance sheet given that credit quality time to jettison the borrowers who could risky commercial credits a year ago, end- remains strong. Net chargeos, for in- wreak havoc on balance sheets later on. ing relationships in a range of industries, stance, declined 8% from a year earlier to But the strate£y nonetheless carried a including those that are dependent on $73 million. short-term cost and curbed loan growth commodities, according to Carmichael. “There’s nothing that destroys share- at a time when new revenue is hard to The company also has scaled back on holder value more than bad credit,” come by. auto loans. Cassidy said. — Kristin Broughton
8 AMERICAN BANKER MARCH 2017
008_ABM0317 8 2/2/2017 3:09:45 PM BankTechnology
Before making the big switch, “we At the ‘Core’ of It, the were so focused on getting the system to work and spent so much time on that, Question Isn’t If, But When we were not getting the job done for our customers,” Gaudian said. Employees at its $704 million-asset bank unit now have access to better tools Fearful banks hesitate on EXPENSE AND RISK HAS KEPT MANY that allow them to be more e cient. A core conversions they need. U.S. banks from modernizing their core customizable dashboard for each em- But what’s more risky? systems, but executives at one commu- ployee eliminates the need to do numer- Keeping legacy technology? nity bank that completed the project this ous searches related to daily tasks. A past summer say they are happier for customer relationship management tool Or fi nally replacing it? having done it. gives an overview of individual custom- By Bryan Yurcan Ultimately, Two Rivers Financial ers at a glance and tracks communication Group in Burlington, Iowa, decided that with them. keeping an old system would end up add- Two Rivers also opted for a system ing too much expense and risk of its own, that enables a variety of prebuilt custom said Kent Gaudian, the president and reports with visual views of data, replac- chief executive o cer. ing manual reports stored in Excel les.
MARCH 2017 AMERICAN BANKER 9
009_ABM0317 9 2/2/2017 2:08:04 PM Banks of all sizes can gain a competi- layer middleware on top of old legacy pace of core conversions will pick up as tive advantage by opting to replace their systems to add new functionality as more banks get increasingly frustrated core, said Peter Wannemacher, a senior needed — a quick x instead of a long- with legacy systems. analyst with Forrester. term solution, Greer said. “There’s always a level of fear, espe- But this is especially true for smaller Though a core replacement can be a cially when it comes to moving all the banks, because being tech-savvy is an ef- highly involved project with many mov- data,” he said. “But if a bank is having fective way for them to stand out from ing parts, Two Rivers and CSI simplied pain with their current system, then they competitors, said Wannemacher, citing the process by breaking it into compo- become more motivated to look into it.” Eastern Bank of Boston and Umpqua nents and dedicating a specic team Tech analysts have heard more bank- Bank in Portland, Ore., as examples. to each. ers at least talk about modernizing core “There’s a precedent for smaller “We have anywhere from 15 to 30 systems lately. banks that are willing to invest being able people working with the bank, from data “In the last two years, compared with to punch above their weight,” he said. movers to sta trainers, support folks the 10 prior to that, the number of banks Two Rivers’ bank unit went live in and relationship managers,” said Tim that have told me a core replacement is early August with a NuPoint core system Thurman, vice president of implemen- on their road map has certainly risen,” from Computer Services Inc. tation for CSI. “We spend a tremendous Wannemacher said. Its search for a new core vendor got amount of time on site and have project But given the rapid pace of change in underway in 2015, at the end of its con- status meetings throughout the process, the industry, even the notion of modern- tract with a previous vendor that Gaudian usually once per week and then more fre- izing core systems could become outdat- declined to name. It settled on CSI just quently the last month before going live.” ed over the next decade, he said. before the new year. Near the end of the project, CSI set up “Looking 10, 15, 20 years down the Gaudian cited the data and analytics a “demo bank” so employees could prac- road, what it even means to be a bank tools available with the cloud-based Nu- tice on the new system. could drastically change,” he said. Point core among the key selling points. Gaudian described the conversion — “When you look at concepts like banking- These allow Two Rivers to analyze which took place on an August weekend as-a-service and open banking, they may each customer relationship and pursue — as “seamless.” not operate in the same way. They may cross-selling opportunities more eec- “I’ve been through several of these not need some of the functions a current tively, he said. The bank can input “what- during my time [in banking],” he said. core system provides.” if” scenarios for a particular account or “There were a few hiccups — there always a group of them, to determine what loan are — but nothing that impacted the cus- opportunities best t those customers, tomer. We came in on Monday and were for example. up and running.” P2P Premiere The system also decreases the time it He attributed the hiccups to the need How the launch of Zelle will takes to open new accounts by eliminat- for more customer communication rath- benefit from past mistakes ing the need to rekey data multiple times. er than something technical. “Due to Core conversions are relatively rare the call volume we received the rst sev- IN COMING MONTHS, THE LARGEST in the banking industry. Extrapolating eral days after the conversion, we now U.S. banks are expected to relaunch their from sales data, the research rm Celent know we could have done a better job person-to-person payments service with estimates that about 2% of the top 1,000 in informing our customers of expected a new name, an easy-to-use mobile app banks opted to do core conversions in changes,” he said. and a slick ad campaign. 2016. Among smaller banks, such as Two The expense of replacing a core sys- The revamped product is called Zelle Rivers, the rate of core conversions is tem can be daunting. Estimates are hard — short for gazelle, the antelope species likely similar, said Stephen Greer, an ana- to come by and vary wildly based on the that can run as fast as 60 miles per hour. lyst in Celent’s banking group. size of the bank and the type of system. Its architects are promising not only real- “Banks always are reluctant to do core But even a community bank can expect time speed, but also unmatched security. migrations because there is a substantial to spend millions of dollars. Zelle has the backing of JPMorgan amount of risk,” he said. “You don’t want Gaudian declined to discuss the cost Chase, Bank of America, Citigroup and a scenario where you pull one string and of the project, saying only that not having Wells Fargo, along with regionals such as then have some kind of reverberation in to deal with glitches in legacy technoloy BB&T, Fifth Third Bancorp, U.S. Bancorp, another place that you didn’t expect.” is enough to justify the investment. Capital One Financial and PNC Financial For that reason, many banks simply CSI’s Thurman predicted that the Services Group. At its launch, the P2P
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011_ABM0317 11 2/3/2017 1:51:28 PM service will be available to 75 million that customers who become ac- Of the 18 banks and credit unions list- mobile banking customers, accord- Moving money customed to using Zelle will be less ed as participants on Zelle’s website, all Nearly half of consumers will make ing to its backers. That scale could likely to switch banks. but ve have at least $50 billion of assets. person-to-person payments by 2021 via potentially give the participating laptops, desktops or mobile devices “It puts our consumers back in In January, the $106 billion-asset BMO banks a big edge in a crowded pay- our hands,” Demchak said. “It’s not Harris Bank unveiled its own branded 50% 150M ments marketplace. % of P2P users (left axis) a revenue opportunity out of the P2P payment app, opting not to use Zelle. No. of P2P users (right axis) Zelle has been dubbed the bank- 40 gate as it relates to the product spe- Zelle also could collide with other
ing industry’s “Venmo killer” — a ref- 120 cically. But I think it is another part more sweeping eorts to modernize pay- erence to the PayPal-owned app that 30 of the customer relationship that ments in the United States. has soared in popularity, particularly makes it more sticky.” A task force convened by the nation’s 20 among millennials. And the big banks 90 Federal Reserve banks is expected to
have learned some important lessons 10 Challenges ahead release a report in mid-2017 evaluating from their earlier foray into P2P pay- Still, there are important questions 19 proposals to build a faster payments ments, which failed to capture the 0 60 hanging over Zelle’s debut. system. One of those proposals is from 2013 2014 2015 2016 2017* 2018* 2019* 2020* 2021* public’s imagination. One issue is whether the re- The Clearing House, which, like Zelle, is Source: Javelin Strategy & Research *Projected But the large banks’ advantages vamped payment network can fulll owned by the nation’s largest banks. oer no guarantee of success. There its ambition of becoming something In the meantime, Zelle is taking steps are plenty of examples of deep-pocketed Industry participants are hoping that bigger than a way to split restaurant bills to extend its reach beyond custom- incumbents — from bookstores to video “Zelle” will catch on as a verb — similar or pay the handyman. ers of the banks that have signed on to rental chains — ailing in their eorts to to how many consumers today ask their In addition to person-to-person pay- the network. It has partnered with FIS, stave o nimbler upstarts. friends to “Venmo” the amount of cash ments, the big banks have their eyes on Fiserv and Jack Henry & Associates, giv- Below is an analysis of the big banks’ they owe. the business-to-consumer market, as well ing smaller institutions that rely on those stratey. “Don’t underestimate the power of as the business-to-business market. Zelle technoloy providers a way to plug into just having a simple brand,” said Michael is being touted as a new way for insur- the P2P network. Zelle also will allow Lessons learned Abbott, who leads the digital nancial ance companies to pay out claims, or for consumers who have Visa or Mastercard- Perhaps the most important change that services practice for North America at companies to reimburse their employees branded debit cards to send and receive the banks are making involves branding. Accenture. for travel expenses. “It works the same payments over the two major card net- For years, the banks enabled person-to- Ease of use is a priority for the banks for companies as consumers,” Lou Anne works’ rails. — Kevin Wack person payments across a shared net- too. Products that are hard for customers Alexander, group president of payments work — known inside the industry as to nd, or inconvenient to use, generally at Early Warning Services, said during clearXchange — but they marketed the do not get much traction. That problem remarks at the Money 2020 conference But Can They service under dierent brand names. hobbled the previous generation of P2P in October. “This eliminates the hassle of Chase called its version QuickPay; payments oered by the big banks. paper-based payments.” Make Coffee? Wells Fargo, SurePay; and U.S. Bank, Last year, only 14 of the top 30 banks Eventually, participating banks may Once banks get comfortable Send Money. Consumers could use these were oering person-to-person pay- be able to generate revenue from busi- with them, bots will be products to deliver cash to people with ments in their mobile banking apps, ac- ness uses of Zelle, though it is not clear working in every department accounts at other banks, but that utility cording to Javelin Stratey & Research. how strong demand will be in the cor- was not intuitively obvious. That number should rise in 2017. porate world. “We are implementing BANKS ARE ALREADY EXPERIMENT® The Zelle rebranding helps convey a Finally, the big banks appear to have B2B and B2C scenarios with several cus- ing with robotic process automation in simpler message. “With Zelle, consumers learned an important lesson regarding tomers and look forward to announcing areas like their compliance functions. can use an email or a mobile number to pricing. In the past, some banks had in- those relationships soon,” Alexander said But soon the technoloy could be used in send and receive payments,” Paul Finch, sisted on charging for P2P payments. But in an email. nearly all aspects of running a bank. the CEO of Early Warning Services, said few people are willing to pay a fee for the Another unanswered question in- As banks become more comfortable at an October presentation. (Early Warn- service, when they can use numerous volves Zelle’s ultimate reach. with relying on software robots to handle ing Services is the bank-owned company other free options instead. Zelle is aiming to connect all 12,000 rote tasks, experts say they will be quick that developed the payment system.) During a Jan. 13 conference call, PNC U.S. bank and credit unions — the holy to deploy the technoloy companywide Zelle will be accessible from the Chief Executive William Demchak said grail for payment systems, because of the as a way to trim expenses and redirect banks’ own mobile banking apps, as well that the Pittsburgh-based company sees powerful network eects that stem from employees to more crucial tasks. as from a standalone app. Publicity for benets from oering Zelle, even though ubiquity. But it is not clear how many “I think we’re going to see it move the service was expected to begin in Feb- its customers will not be paying fees to smaller institutions will choose to join a from a few narrow functions to across ruary, with the launch to follow later. use to the service. Specically, he argued network owned by the big banks. the enterprise,” said Alan McIntyre, the
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012_ABM0317 12 2/2/2017 2:08:05 PM that customers who become ac- Of the 18 banks and credit unions list- industry managing director for banking plicated wealth management services, customed to using Zelle will be less ed as participants on Zelle’s website, all at Accenture. “It’s going to become an in- the technoloy can be used to improve likely to switch banks. but ve have at least $50 billion of assets. dispensable technoloy for banks, rather customer relationship management for “It puts our consumers back in In January, the $106 billion-asset BMO than an interesting experiment.” banks, said Mark Schwanhausser, direc- our hands,” Demchak said. “It’s not Harris Bank unveiled its own branded This could include areas in nance de- tor of omnichannel nancial services at a revenue opportunity out of the P2P payment app, opting not to use Zelle. partments that are heavily manual, such Javelin Stratey & Research. gate as it relates to the product spe- Zelle also could collide with other as managing and clearing payments. Hu- After a major event that aects the cically. But I think it is another part more sweeping eorts to modernize pay- man resources and administrative func- stock market (such as Brexit), a nancial of the customer relationship that ments in the United States. tions also could benet. For example, adviser might have 30 clients with ques- makes it more sticky.” A task force convened by the nation’s robots could take over payroll and man- tions about how this aects their portfo- Federal Reserve banks is expected to aging employee incentive programs. lio. Calling all 30 would be time-consum- Challenges ahead release a report in mid-2017 evaluating And even if robots don’t fully run ing for one person. But using robotics, Still, there are important questions 19 proposals to build a faster payments these departments, they can be used to the adviser could send a message tailored hanging over Zelle’s debut. system. One of those proposals is from assist human employees during periods to each individual telling them how the One issue is whether the re- The Clearing House, which, like Zelle, is of heavy workloads, said Alastair Bath- event aects their portfolio, along with a vamped payment network can fulll owned by the nation’s largest banks. gate, chief executive and co-founder of “click to call” button if they do want to its ambition of becoming something In the meantime, Zelle is taking steps Blue Prism, a robotic process automation talk to the adviser, said Schwanhausser. bigger than a way to split restaurant bills to extend its reach beyond custom- rm, which has partnered with Accen- Similar ideas can be used to enhance or pay the handyman. ers of the banks that have signed on to ture to help nancial services and other personal budgeting and nancial man- In addition to person-to-person pay- the network. It has partnered with FIS, industries implement robotics. agement tools, he said. For example, ments, the big banks have their eyes on Fiserv and Jack Henry & Associates, giv- Austria’s Raieisen Bank Internation- when logging onto mobile banking, a the business-to-consumer market, as well ing smaller institutions that rely on those al AG is among the rst to work with Ac- customer could view personalized infor- as the business-to-business market. Zelle technoloy providers a way to plug into centure and Blue Prism to automate vari- mation on their progress toward meeting is being touted as a new way for insur- the P2P network. Zelle also will allow ous business functions. It is also in the their nancial goals with insights into ance companies to pay out claims, or for consumers who have Visa or Mastercard- process of creating an in-house robotics their spending and saving habits. companies to reimburse their employees branded debit cards to send and receive center dedicated to experimenting with “It can provide very personalized ser- for travel expenses. “It works the same payments over the two major card net- how the technoloy can be used in dier- vice,” without any human interaction, for companies as consumers,” Lou Anne works’ rails. — Kevin Wack ent functions at the bank. Schwanhausser said. Alexander, group president of payments Raieisen started out implementing Neither Schwanhausser nor McIntyre at Early Warning Services, said during robotic process automation — or RPA believes the human element will be re- remarks at the Money 2020 conference But Can They for short — in four pilots where the tasks moved from banking — just deployed in in October. “This eliminates the hassle of had low-to-medium complexity; rule- smarter ways. paper-based payments.” Make Coffee? based processes with a logical order of “It is a move to automation, but it’s a Eventually, participating banks may Once banks get comfortable steps, and repetitive patterns with clear- move to automation that complements be able to generate revenue from busi- with them, bots will be ly dened process options, said Markus the human element,” Schwanhausser ness uses of Zelle, though it is not clear working in every department Stanek, head of group e©ciency manage- said. “You may not want to talk to some- how strong demand will be in the cor- ment at the bank. one every time you have any nancial porate world. “We are implementing BANKS ARE ALREADY EXPERIMENT¦ RPA is a tool best deployed like a sur- question; [robotics] can provide you with B2B and B2C scenarios with several cus- ing with robotic process automation in gical intervention, automating specic a lot of daily information you wouldn’t tomers and look forward to announcing areas like their compliance functions. process steps, he said. A project can be have thought to ask for to begin with. If it those relationships soon,” Alexander said But soon the technoloy could be used in implemented in just a couple of weeks. just represents an interaction that never in an email. nearly all aspects of running a bank. The technoloy also has potential would have happened anyway, then it’s Another unanswered question in- As banks become more comfortable uses for consumer-facing functions, not not a threat to any employee.” volves Zelle’s ultimate reach. with relying on software robots to handle just back-o©ce automation. The most Regardless of how it plays out, Zelle is aiming to connect all 12,000 rote tasks, experts say they will be quick notable use thus far has been so-called Schwanhausser said, the move to using U.S. bank and credit unions — the holy to deploy the technoloy companywide robo-advisers, which use simple, rules- robotics in nancial services has already grail for payment systems, because of the as a way to trim expenses and redirect based models to choose investment ve- passed the point of no return. powerful network eects that stem from employees to more crucial tasks. hicles for an investor after that person “What you are seeing now is the be- ubiquity. But it is not clear how many “I think we’re going to see it move inputs basic information about their risk ginning stages of what is going to increas- smaller institutions will choose to join a from a few narrow functions to across tolerance and investing goals. But be- ingly become the norm,” he said. network owned by the big banks. the enterprise,” said Alan McIntyre, the yond robo-advisers and even more com- — Bryan Yurcan
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013_ABM0317 13 2/2/2017 2:08:06 PM New quarterback: Andy Cecere, left, is succeeding Richard Davis at a tricky time for U.S. Bancorp. Some investors say the Minneapolis company hasn't grown fast enough.
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ABM0317_CS.indd 14 2/2/17 4:42 PM t’s an unseasonably warm January night in Minneapolis as employees of U.S. Bancorp pack into U.S. Bank Sta- dium, the hometown Vikings’ new $1.1 WITH U.S. BANCORP’S LEADERSHIP billion playground, for the company’s annual all-employee gathering. The TRANSITION UNDERWAY, THE brainchild of Chairman and Chief Ex- ecutive Richard Davis, the event is in BIG QUESTION IS WHETHER IT Iits 10th year, but this is the most emotional. Two days earlier, the 58-year-old Davis WILL DELIVER FASTER EARNINGS surprised pretty much everyone by an- nouncing that he’ll be retiring as CEO in New quarterback: GROWTH THE ONE SHAREHOLDER April. The $446 billion-asset company has Andy Cecere, left, DEMAND THAT HAS PROVEN ELUSIVE telegraphed the move for a while, promot- is succeeding Richard ing Davis’ successor, Andy Cecere, to chief Davis at a tricky time for operating ocer in 2015, and adding the title U.S. Bancorp. Some investors say the of president last year. Minneapolis company Even so, it’s rare to see a guy so clearly hasn't grown fast enough. By John Engen at the top of his game stepping aside at such an early age. For the 8,000 Twin Cities-area Photography by Thomas Strand employees in attendance (and 60,000 oth- ers watching live around the country), it’s bittersweet. One woman is wearing a pink T-shirt with the name “Richard Davis” printed in the center of a heart. Poster sticks with Davis’ head are bobbing in the crowd and the line for seles with the outgoing CEO constantly rells. Some employees are crying.
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ABM0317_CS.indd 15 2/2/17 4:42 PM The rock-star treatment is understand- you have to pick somebody else,” said cost of winning would hurt protability. able. With Davis at the helm, USB rode David O’Maley, a 22-year member of Sitting in a conference room several days While analysts and traders might out the nancial crisis better than any USB’s board and its lead director. “Andy after the employee event, Davis and Ce- want management to stretch for growth, large bank, and today is near the top on is an extraordinarily good choice. He has cere joked easily about reaction to the Davis insists USB’s core shareholders most performance measures, including great leadership skills and the condence leadership change. Cecere conceded that care more about “consistent, predict- return on assets (1.36%), return on equity and trust of the board.” some of the attention (his enlarged head able and repeatable” results, and appre- (13.4%) and eciency ratio (54.9%). Cecere is taking over at a tricky time. was on some of those poster sticks) was ciate that USB doesn’t take unnecessary He’s also created a culture that is su- USB’s returns have its shares trading at unnerving. “You get used to it,” Davis credit risks. premely condent in its capabilities and more than 16 times earnings and around deadpanned. “The point is, culture is not some- direction. Listening to the testimonials two times tangible book value, a signi- Neither seems fazed by all the talk thing you mess with as circumstances and war whoops from the crowd, it’s cant premium to most other big banks. about growth expectations. U.S. Bancorp change,” said Davis, who will remain ex- evident employees are proud of their But the rap among some investors is that has a well-earned reputation for conser- ecutive chairman to ease the transition. company. On stage, Cecere, a 56-year-old the company hasn’t grown fast enough. vatism, and is sometimes best dened by “You pick a course, own it and do the USB lifer, leads the tribute, declaring that Davis, a fan of sports analogies, prom- what it won’t do — things management same thing going forward.” Davis "is part of the fabric of our culture ised earlier this decade to get USB playing considers to be too risky, expensive, or If falling a little short on growth tar- ... his legacy is our story.” “more oense,” but couldn’t meet three- simply wrong. gets is USB’s biggest issue — and by all The question is, can the low-key Ce- year growth targets set in 2013 in either Last decade, USB famously sat out the accounts, it is — then its executives have cere, with his more introverted, cerebral its banking or powerhouse payments subprime housing boom, which helped it reason to stay the course. Banking has style, carry on that legacy and feel-good businesses. (USB’s other major business, emerge from the nancial crisis as one of been under siege for most of the past de- vibe as eectively as the high-enery wealth management, hit its goals.) the industry’s healthiest players and the cade, blamed for the nancial crisis, en- Davis? In 2016, net income was almost ex- nation’s fth-largest banking company. gaged in constant battles with regulators It’s never easy replacing an icon, but actly the same as the year before, while Today, it has similarly pulled back and squandering customer trust. most analysts and investors, including per-share earnings jumped a modest from several hot sectors, including com- USB has had a couple of scrapes with Warren Buett, who owns 5% of the com- 2.5%. Consensus estimates peg per-share mercial real estate and auto lending, cit- the Consumer Financial Protection Bu- pany’s shares, have expressed comfort earnings growth at 4.6% in 2017. ing irrational competition. reau. It also is still working through a with the move. “I can’t imagine a more “It’s fair to say they have fallen short “Right now, this very minute, there 2015 consent order from the Oce of the seamless transition, even for a person as of expectations,” McDonald said. “They are banks all over the country doing Comptroller of the Currency regarding hard to replace as Richard Davis,” said invested in wealth management, pay- crazy things with commercial real es- deciencies in its Bank Secrecy Act and John McDonald, a senior research analyst ments and corporate- and middle-market tate loans — 15 years, no recourse, stu anti-money-laundering compliance pro- with Sanford C. Bernstein. bankers when other banks were ghting like that. They’re making subprime auto gram — a challenge that is costing more Cecere was USB’s chief nancial of- for their lives, and now it’s time for them loans, assuming the world will never get than Davis would like and prevents the cer for most of the past decade, and to show the oense that was talked about worse again. They’re using nontradition- company from acquiring other banks. regularly appeared with Davis at investor and outgrow their peers.” al data that has never been tested over a But among the big banks, USB has conferences. “Andy embodies the same With interest rates on the rise and cycle to underwrite,” Davis said. been a pillar — a “Goldilocks” company values as Richard about running the President Trump vowing to boost eco- “It all feels like 15 years ago, very risky. that’s not too big or too small and can be company for the good of all stakehold- nomic growth and cut back on regula- So we’re passing,” he added. “And then counted on to provide a steady return in ers,” McDonald said. “Wall Street looks at tions — all good things for banks — Cecere people ask, ‘Why were your commercial good times or bad. them very much as a pair.” is under pressure to deliver better real estate loans ¨at last quarter when It has stayed on the high road too. In Within the company, the two walk in results. they went up everywhere else?’ It’s be- one recent example, Davis resisted sug- lockstep on stratey and direction, even “Investors have given them the ben- cause we didn’t see any loans we wanted gestions that USB aggressively pursue if Cecere’s more deliberative style lacks et of the doubt, but they’re getting im- to make.” customers of rival Wells Fargo after the some of Davis’ charisma and storytelling patient,” said Scott Siefers, an analyst A giant in the payments business (USB damaging sales-practices scandal there. pizzazz. with Sandler O’Neill. “With the economy owns Elavon, the big processor), the com- “Not only are we not going to do any- “There aren’t two Richards, and improving, USB needs to start generating pany also has refused to get sucked into thing about it, if I nd out one of our we can’t get a rib and clone him. So more positive operating leverage.” the credit card rewards wars because the bankers is out there trying to poach Wells
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ABM0317_CS.indd 16 2/2/17 5:12 PM cost of winning would hurt protability. Fargo customers, I’ll probably let them a community group, hundreds of hands Sitting in a conference room several days While analysts and traders might go,” Davis recalled telling an investor shoot up. “I’m warning you, as a banker after the employee event, Davis and Ce- want management to stretch for growth, who broached the topic last September. they’ll always ask you to be treasurer,” cere joked easily about reaction to the Davis insists USB’s core shareholders It’s not an altruistic point of view. Davis joked. leadership change. Cecere conceded that care more about “consistent, predict- “Nobody benets from us pointing at some of the attention (his enlarged head able and repeatable” results, and appre- each other and playing ugly playground was on some of those poster sticks) was ciate that USB doesn’t take unnecessary games,” especially when the industry has unnerving. “You get used to it,” Davis credit risks. worked so hard to recover from its repu- At rst glance, U.S. Bancorp would ap- deadpanned. “The point is, culture is not some- tation problems, he said. pear an unlikely candidate for a kinder, Neither seems fazed by all the talk thing you mess with as circumstances Over the years Davis has become one gentler culture. Eciency has always about growth expectations. U.S. Bancorp change,” said Davis, who will remain ex- of the industry’s most respected voices. been a corporate calling card. One of its has a well-earned reputation for conser- ecutive chairman to ease the transition. He’s met with former President Obama, antecedents, the old Minneapolis-based vatism, and is sometimes best dened by “You pick a course, own it and do the sat on committees with former Federal First Bank System, was run by a guy nick- what it won’t do — things management same thing going forward.” Reserve Chairman Ben Bernanke and named “Jack the Ripper” for his obses- considers to be too risky, expensive, or If falling a little short on growth tar- served on the boards of key organiza- sion with controlling costs. simply wrong. gets is USB’s biggest issue — and by all tions, such as the Financial Services Under Davis, USB still cares about e- Last decade, USB famously sat out the accounts, it is — then its executives have Roundtable. ciency, but approaches decisions with an subprime housing boom, which helped it reason to stay the course. Banking has As chairman of the roundtable in eye for impact on all stakeholders. When emerge from the nancial crisis as one of been under siege for most of the past de- 2010, Davis took the lead on eorts to a new product is proposed, a common the industry’s healthiest players and the cade, blamed for the nancial crisis, en- restore the industry’s post-crisis reputa- question is, “Would this be good for my nation’s fth-largest banking company. gaged in constant battles with regulators tion and spearheaded a push for greater grandmother?” Today, it has similarly pulled back and squandering customer trust. industry cooperation on cybersecurity Davis has made employees feel more from several hot sectors, including com- USB has had a couple of scrapes with issues. More recently, he’s become a go- like partners by opening lines of commu- mercial real estate and auto lending, cit- the Consumer Financial Protection Bu- to source for Washington policymakers nication on stratey and even hiring pol- ing irrational competition. reau. It also is still working through a seeking an honest assessment of a pro- icy. In 2010, for example, management “Right now, this very minute, there 2015 consent order from the Oce of the posal’s impact. made a deal with employees: Instead of are banks all over the country doing Comptroller of the Currency regarding His reputation even among competi- making 2,400 new hires, as the budget crazy things with commercial real es- deciencies in its Bank Secrecy Act and tors is stellar. “A lot of his colleagues called for, the company would hire only tate loans — 15 years, no recourse, stu anti-money-laundering compliance pro- refer to Richard as the best banker in the half that many. In exchange, Davis would like that. They’re making subprime auto gram — a challenge that is costing more United States,” said Tim Pawlenty, the do what he could to protect their jobs if loans, assuming the world will never get than Davis would like and prevents the roundtable’s CEO. the economy didn’t pick up as expected worse again. They’re using nontradition- company from acquiring other banks. In Minneapolis, the Los Angeles na- (which it didn’t). al data that has never been tested over a But among the big banks, USB has tive’s adopted hometown, Davis has been “It was a trade-o for job security,” cycle to underwrite,” Davis said. been a pillar — a “Goldilocks” company one of the business community’s stron- Davis said. “What I heard was, ‘I trust “It all feels like 15 years ago, very risky. that’s not too big or too small and can be gest voices and has served on nearly a you guys to look out for me, because you So we’re passing,” he added. “And then counted on to provide a steady return in dozen civic boards. He’s currently chair- tell me the truth. If I have to work my tail people ask, ‘Why were your commercial good times or bad. man of the local economic development o because you won’t hire more people, real estate loans ¥at last quarter when It has stayed on the high road too. In authority and the planning committee but if it means I’ll still be here in nine they went up everywhere else?’ It’s be- one recent example, Davis resisted sug- for the 2018 Super Bowl in Minneapolis. years, I’ll do it.’ ” cause we didn’t see any loans we wanted gestions that USB aggressively pursue Davis has brought that same civic- In exchange, he asks employees to to make.” customers of rival Wells Fargo after the mindedness to USB itself. A program be partners in a hostile environment. As A giant in the payments business (USB damaging sales-practices scandal there. called Community Possible gives employ- the biggest scandal-free bank, “we walk owns Elavon, the big processor), the com- “Not only are we not going to do any- ees at least one day o each year to vol- a tightrope that’s higher than any other pany also has refused to get sucked into thing about it, if I nd out one of our unteer. When he asks how many in the bank, and we have no net,” Davis said. the credit card rewards wars because the bankers is out there trying to poach Wells Minneapolis crowd serve on the board of “We’ve been very clear with employees
16 AMERICAN BANKER MARCH 2017 MARCH 2017 AMERICAN BANKER 17
ABM0317_CS.indd 17 2/2/17 5:12 PM about this: We can’t fall or even lose Eighteen key themes emerged, which a reader. “It’s not all that techie, but it’s our balance. If we screw up, we’re in the executive team whittled to ve core denitely innovation,” Venturo said. trouble.” values (including “We do the right thing” Venturo’s unit doesn’t have a prot- Such eorts pay o in employee en- and “We put people rst”) and a purpose and-loss statement, but this being USB gagement scores that rank in the top statement (“We invest our hearts and everything is measured. Projects start quartile of all companies, and have made minds to power human potential”). small, move through research and devel- USB a regular on a list of the “world’s Quinn said three main business goals opment, are tested in experiments and most ethical companies” published by are embodied in the culture: to be cus- pilots, then get reviewed again. “The pro- Ethisphere. It is also the largest bank on tomers’ most trusted choice, create a uni- cess isn’t super-cutting-edge, but it’s our the list. ed customer experience across business culture — very methodical,” he said. Tim Erblich, CEO of the Ethisphere lines and channels, and continually build Institute, said USB is ahead of most bank- better processes and technologies. ing peers in recognizing the power of Innovation is central to the eort. openness and ethical example-setting McDonald, the analyst, said it’s not clear Being a “cultural caretaker” may be Ce- at the top. Employees take pride when if USB is keeping pace with rivals on cere’s biggest challenge. Davis’ depar- Cecere is replacing an their company tackles society’s ills, such being the so-called bank of tomorrow. ture, particularly when the company he’s icon, but most investors as a recent initiative for serving the un- Cecere, a self-described techie, counters re-engineered could be poised to capture and analysts suggest he’s up to the task. banked. That, in turn, inspires loyalty that other banks simply talk more about the growth that has eluded it, puzzles “I can’t imagine a more and extra eort. their initiatives. many. Some worry that he or someone seamless transition, “It’s a secret sauce for success,” Er- “We hold our ideas close to the vest, in his family is ill; others think that he’s even for a person as blich said. “If employees trust the leader- because there’s no upside to showing simply tired after 10 years of bank wars. hard to replace as ship, then your customers trust the em- your cards,” he said. “It frustrates the A few have speculated that he wit- Richard Davis,” analyst John McDonald says. ployees and it all trickles to the bottom analysts, but it’s what’s best for us.” nessed the scandal engulng his friend line. It’s super-smart business.” Dominic Venturo, the company’s and colleague, John Stumpf, the former It’s not easy to align 70,000 employ- chief innovation o¡cer, said about 60% chairman and CEO of Wells Fargo, and is ees scattered around the world — USB’s of all USB transactions are performed on getting out before something unexpected Cecere grew up in Norridge, Ill., then retail banking business is in 25 states, and a mobile device. His 25-person innova- blows up. an Italian enclave in suburban Chicago. its corporate banking, wealth manage- tion team, which started in the payments Davis calls the latter notion “oen- His parents were bakers, and moved to ment and trust businesses are national, group a decade ago, now works with all sive.” The only thing he’s tired of is out- Minneapolis when Cecere was 16 to open while payments is global. business lines to identify problems and siders trying to “ll in the blanks” on a a restaurant. He was the rst in his family When Kate Quinn started as the com- anticipate what’s next. straightforward story: He got the job at to complete high school. pany’s chief stratey and reputation o¡- It has projects going on everything an early age and thinks 10 years is long After his 1982 graduation from the cer in 2013, she saw a lot of people who from blockchain to merchant-based mo- enough for any CEO to stick around. He College of St. Thomas in St. Paul, Minn., instinctively understood the culture, but bile apps. One recent launch employs also is ready personally for a new chal- Cecere went to work for Control Data, a no centralized mission statement or set mobile geolocation services already used lenge. “I’ve long believed that there’s one Minneapolis computer company. Three of core values to dene it. The lack of co- to help customers nd an ATM or branch more thing for me to do in life, probably years later he took a job as a nancial hesion made marketing USB to custom- to match a customer’s whereabouts with more mission-based,” he said. analyst for USB predecessor First Bank ers, another of her tasks, more di¡cult. a merchant’s and reduce declines of valid If the election had turned out dier- System. “It’s such a dierent and unique cul- card transactions. ently, Davis thinks that could have been A stint running mergers and acquisi- ture, but there wasn’t a set of words The team also runs what Venturo de- a role in Washington. Now, he’s not sure. tions during the go-go ’90s gave Cecere or unifying principles that everybody scribes as an in-house version of “Shark He could get more active in one of his a unique perspective on the industry. He looked to for guidance,” said Quinn, who Tank,” the popular television show. Em- causes, such as Step Up, a summer-jobs was U.S. Bank’s CFO when it merged in worked for several large health care com- ployees pitch ideas and the good ones get program for disadvantaged teens he 2001 with Firstar Corp., where Davis was panies before joining USB. funded. One example: a “high visibility helped launch in the Twin Cities. chief lieutenant to CEO Jerry Grundhofer. Quinn led an eort that solicited credit card” with large fonts and a divot The only things he’s certain about are Following the merger, Cecere headed the from customers and employees words on one end so customers with failing that he will not work for another bank, new USB’s wealth management unit, un- and phrases to describe the company. eyesight can feel which side to slide into and that he has the right successor. til Davis made him CFO in 2007. In that
18 AMERICAN BANKER MARCH 2017 MARCH 2017 AMERICAN BANKER 19
ABM0317_CS.indd 18 2/2/17 5:12 PM a reader. “It’s not all that techie, but it’s she said. denitely innovation,” Venturo said. He also makes time each year to meet Venturo’s unit doesn’t have a prot- with nance students, breaking down and-loss statement, but this being USB complex nance and technoloy topics. everything is measured. Projects start “He’s not an extrovert, but he’s an excel- small, move through research and devel- lent communicator, even in front of a opment, are tested in experiments and crowd,” Zaheer said. pilots, then get reviewed again. “The pro- On the board of overseers, Cecere is cess isn’t super-cutting-edge, but it’s our a detail-oriented guy who speaks only culture — very methodical,” he said. when he has something meaningful to say. “Andy doesn’t dominate a room, but he always has the best observations and questions,” said Robert Kueppers, the Being a “cultural caretaker” may be Ce- board’s chairman and a retired senior cere’s biggest challenge. Davis’ depar- Cecere is replacing an partner with Deloitte. ture, particularly when the company he’s icon, but most investors “There’s an air of humility about him,” re-engineered could be poised to capture and analysts suggest Kueppers added. “He’s credible because he’s up to the task. the growth that has eluded it, puzzles “I can’t imagine a more he doesn’t ll up the air with words.” many. Some worry that he or someone seamless transition, Maintaining USB’s credibility will in his family is ill; others think that he’s even for a person as likely make Cecere a success. Boosting simply tired after 10 years of bank wars. hard to replace as revenue and the bottom line could make A few have speculated that he wit- Richard Davis,” analyst him a star, and he sounds condent that John McDonald says. nessed the scandal engulng his friend the environment will cooperate. and colleague, John Stumpf, the former Loans grew 6% in 2016 year over year, chairman and CEO of Wells Fargo, and is but margins remain compressed. Cecere getting out before something unexpected Cecere grew up in Norridge, Ill., then job, he earned a reputation as a sharp expects two rate hikes this year, which blows up. an Italian enclave in suburban Chicago. numbers guy. should help spreads. In conversations Davis calls the latter notion “o¨en- His parents were bakers, and moved to Davis said Cecere is “less loquacious” with business customers, he’s hearing sive.” The only thing he’s tired of is out- Minneapolis when Cecere was 16 to open than he is, but is “one of the smartest hu- talk of economic expansion, which could siders trying to “ll in the blanks” on a a restaurant. He was the rst in his family man beings I’ve ever known, and match- give the payments business a boost and straightforward story: He got the job at to complete high school. es that with intuition about the softer release pent-up loan demand. an early age and thinks 10 years is long After his 1982 graduation from the issues.” He said working in the family USB has $110 billion in commercial enough for any CEO to stick around. He College of St. Thomas in St. Paul, Minn., restaurant taught Cecere how to manage line-of-credit commitments, for example, also is ready personally for a new chal- Cecere went to work for Control Data, a a service business and win loyalty, while but only 25% is being utilized, down from lenge. “I’ve long believed that there’s one Minneapolis computer company. Three the Catholic-school upbringing made him 38% in 2004. Simply returning to those more thing for me to do in life, probably years later he took a job as a nancial “a very pure thinker who values honesty, previous levels would add more than $14 more mission-based,” he said. analyst for USB predecessor First Bank ethics and integrity.” billion to the loan books. If the election had turned out di¨er- System. Cecere isn’t an attention-seeker. Sri “We’ve always been thought of as a ently, Davis thinks that could have been A stint running mergers and acquisi- Zaheer, dean of the University of Min- safe, defensive stock. When the screen a role in Washington. Now, he’s not sure. tions during the go-go ’90s gave Cecere nesota’s Carlson School of Management, is red, we’re less red; when the screen is He could get more active in one of his a unique perspective on the industry. He where Cecere earned his MBA in 1991 and green, we’re less green,” Cecere said. “As causes, such as Step Up, a summer-jobs was U.S. Bank’s CFO when it merged in is now on the board of overseers, said the economy starts improving, I think program for disadvantaged teens he 2001 with Firstar Corp., where Davis was that when Cecere received an “outstand- we’re going to be a little greener.” helped launch in the Twin Cities. chief lieutenant to CEO Jerry Grundhofer. ing achievement award” from the school A strong performance under Cecere The only things he’s certain about are Following the merger, Cecere headed the in 2015, he invited only family members. would no doubt make next year’s all- that he will not work for another bank, new USB’s wealth management unit, un- “Normally people make a big event employee gathering a celebration, even and that he has the right successor. til Davis made him CFO in 2007. In that of it, but Andy wanted it to be low-key,” without Davis. ¥
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ABM0317_CS.indd 19 2/2/17 5:12 PM BankThink BY SCOTT RASKIN
Tap into Crowd Power to Thrive Amid Disruption For evidence of how quickly technoloy changes the world, just take a look at company advance. As part of an Stripe. A round of funding in November valued it at about $9.2 billion, nearly double innovation challenge, Citibank decided what it was worth less than two years earlier and making it one of the most valuable U.S. to simultaneously connect more than ntech companies. The software company powers online payments for e-commerce 260,000 employees in 97 countries. sites and is riding the wave of consumer movement from oine to online. The bank was able to generate massive Spending on Black Friday weekend highlights the trend: Internet sales on both days participation from its diverse employee rose in the double digits compared with 2015, surpassing $3 billion for the rst time, base, ultimately leading to 2,000 new and net sales at brick-and-mortar stores fell 5% over the two days. Many of the online ideas being suggested. transactions passed through Stripe, not through traditional payment processors. Start with this fundamental question: The way we buy today is already dierent than just a few years ago. In a decade, it Is there a way for employees across will be totally transformed. the organization to easily share their Retailers and traditional payment processors aren’t the only ones being aected ideas? From there, either introduce new by the broad changes underway. Technoloy is continually redening how most systems or change existing ones so that industries work, from nancial services and health care to manufacturing and enery. you’re fostering a culture of innovation. Here is what every company must do to stay relevant and competitive in the • Break from Tradition coming decade of unprecedented disruption. KPMG research found that 54% of • Grasp the Full Scale of Disruption insurance companies say If you can’t see the complete picture of impending changes, then how their innovation strategies can you possibly confront those changes? OPINION focus on developing new Keep tabs on emerging technoloy providers. Be hyperaware of For more viewpoints products tailored to the trends in your sector. And ensure that all employees are educating on industry issues, visit changing customer needs. the BankThink page on themselves about the specic disruptions that apply to your business. The lesson is, quite simply, AmericanBanker.com You need to continually experiment with new ideas as well. Polaris, that if the old market is which makes motorcycles and o-road vehicles, had a program for disappearing, it’s time to employees to generate new ideas. The result was Slingshot, a unique three-wheeler look for a new one. that disrupted the traditional motorcycle business and helped boost Polaris’ market When seeking new ideas, many capitalization to $6 billion. companies hold quarterly brainstorming Follow Polaris’ model by engaging with employees and customers to gain valuable sessions with their top executives, but insight. Experiment with new ideas even if it could cannibalize your business, because that’s no longer enough. Make idea you might have stumbled onto the next big disruption in your industry. generation and self-disruption an ongoing • Listen to Employees process that is built into your corporate While active executive participation remains essential, every business also must culture. Be ready to implement the best demonstrate trust, promote collaboration, and inspire innovation across the entire ideas in almost real time. employee population. Unfortunately, only about a third of U.S. employees today Not every idea is transformative, are “involved in, enthusiastic about and committed to their work and workplace,” but a lot of improvement can happen according to Gallup. That has a measurable negative impact. Research shows that incrementally. Crowdsourcing uncovers unhappy workers end up being 10% less productive than their colleagues. a range of ideas that can help generate Giving your employees a voice will inspire them to care enough to help the savings, identify new opportunities and improve existing products and services. Scott Raskin is the chief executive of Spigit, an innovation management software provider. He And who knows? One of those ideas has two decades of experience building technoloy brands, including TeleLogic and Mindjet. just might be the next Slingshot.
20 AMERICAN BANKER MARCH 2017
020_ABM0317 20 2/2/2017 10:25:55 AM Was Your Company Featured in ?
WEDNESDAY OCTOBER 1, 2014 VOL. 179 No. 152 AMERICANBANKER.COM dailybriefing TH ANNUAL MOST POWERFUL WOMEN IN BANKING Somali-Americans Catch a Break on Remittances 12 1 Somali-Americans who send cash home to their relatives can breathe a bit easier following the decision by Merchants Bank of magazine Follow us on Twitter @AmerBanker California. Page 1 Virginia National Pressured to Pursue Merger of Equals 2 A former employee wants the company to look at a merger SUBSCRIPTIONS: 800.221.1809 of equals or selling its wealth management operations to increase shareholder value. Management, meanwhile, wants to grow in a way that diversies income and reduces risk. ‘New Era’ Citi’s Corbat: Shadow Market Must Fill Banking ‘Voids’ 3 Citigroup Chief Executive Michael Corbat reectedPage 4 with Warburg Pincus CEO Joseph Landy and Paulson & Co. CEO John In CFPB’s Paulson on the growth paradigm of tomorrow’s nancial mar- kets, the role of shadow banking within it and how the world for megabanks has become permanently smaller. Policing of Drive for Lottery-Like Savings Awards Gains Steam Servicers 4 Credit unions have shown that a chance to winPage a 4prize helps motivate consumers to save. However, U.S. regulations have sty- mied many banks from oering lottery-style savings programs, Action against and eorts are increasing to make the necessary changes to federal and state laws. Flagstar Bank has
Page 10 far-ranging impact ‘New’ PayPal Gains Chance to Seek New Partners Bob Beauprez, left, a former community banker and Republican congressman, is challenging incumbent John Hickenlooper in Colorado’s gubernatorial race. 5 EBay’s planned spino of PayPal is a necessary and inevita- By Rachel Witkowski ble response to the inux of disruption coming to the payments industry from unconventional sources. WASHINGTON — The Consum- er Financial Protection Bureau’s Bank Deal Playing Role in action against Flagstar Bank on What Branchless Banking Means for the CRA Monday marked a series of rsts Back page 6 As the industry turns to online-only banking and partner- for the agency, including the rst ships with third-party retail distributors, it’s getting harder to use Colorado Governor’s Race time it enforced its new mortgage geographical boundaries to dene the communities that banks servicing rules and the rst time it serve. That’s why the Community Reinvestment Act needs an By Robert Barba banned a servicer from servicing update, Andrea Luquetta writes. A precrisis bank acquisition has worked its way to the center new loans until xes are made. of Colorado’s gubernatorial race. advantage based on an averaging But the importance of the In Defense of Payday LendingPage 8 move was arguably even more Bob Beauprez, a former Repub- of several polls, the site reports, 7 Millions of Americans rely on payday loans to meet their though his lead is well within the far-reaching than that, as the short-term credit needs, and new research suggests that they lican congressman, is challenging polls’ margins of error. CFPB cited Flagstar for activity understand the costs and terms associated with the product, incumbent John Hickenlooper, a 9/3/14 6:24 PM that predated the mortgage ser- Dennis Shaul writes. Democrat. The race is tight, with Beauprez was a community A SENSE OF realclearpolitics.com calling it a banker before entering politics vicing rule under which the agen- Page 8 toss-up. Heading into the home- and, in September, a pro-Hicken- cy took action. PNC to Buy Connecticut IPO Consulting Firm stretch, Beauprez has a 1.8-point looper group that calls itself Mak- Flagstar, of Troy, Mich., was or- 8 PNC Financial Services Group in Pittsburgh has agreed to ing Colorado Great began releas- dered to pay $37.5 million in nes PURPOSE buy Solebury Capital Group, a Stamford, Conn., consulting rm and restitution for its foreclosure ing ads that attack Beauprez and that focuses on taking companies public. EFFECTING POSITIVE newsmaker his industry involvement, both as activities beginning in 2011, even a legislator and as the seller of a though the servicing rule did not CHANGE AT WORK Subprime Credit Cards Make a Comeback bank. go into eect until January of this 9 It’s becoming easier for Americans withPage low 10credit scores to year. CFPB ocials billed the reg- get a credit card, according to a new report. The industry con- “In Colorado he owned a bank, AND BEYOND then Beauprez went to Congress ulatory action as a critical shift in tracted sharply during the recession. and supported a law to loosen the regulatory approach to issues with servicers. “Today’s action signals a new First Connecticut Expands intoPage Massachusetts 2 10 See page 6 era of enforcement to protect setts by openingFirst Connecticut a commercial Bancorp lending is expandingoce and twointo branchesMassachu- in Hampden County. California Bank Keeps Doors See page 3 Back page Open to Somali Transmitters
By Kevin Wack A small West Coast bank that caused alarm with its plan to stop serving a raft of Somali money end of September. transmitters has now reversed The bank’s decision to contin- that decision, according to the ue the relationships indenitely October 2014 chairman of the Somali-American was conrmed by a second source EXCLUSIVE CLUB: “If you don’t have Money Services Association. with knowledge of the situation. scale in a particular product or busi- Merchants Bank of California Merchants Bank of California de- ness line today, you probably can’t recently informed roughly 10 So- clined to comment. buy it. Therefore, you have to build mali remittance rms that their Because war-torn Somalia lacks AB100114EDIT.indd 1 it,” Citigroup’s Michael Corbat says. accounts can stay open, said a formal banking system, Soma- Abdullaziz Sugulle, the group’s li-Americans depend on money chairman. That is despite an ear- transmitters to get money home See page 4 lier warning that the companies to their relatives. The informal would lose their accounts at the remittance system, which is cen- tered in Dubai, has come under Use That Opportunity to Enhanceclose regulatory scrutiny because
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022_ABM0317 22 2/2/2017 4:37:01 PM Index of Advertisers Marketplace Showcase COMPANY PHONE PAGE Welcome to the premier monthly showcase of products, services and solutions for the Banking and Financial Industry WEB SITE Advertising Contacts
BAKER HILL C4 PUBLISHER MA, RI, NH, VT, ME www.bakerhill.com/commerciallending MIDATLANTIC/ SUBSERVICING SOUTHEAST BRAD BAVA DAVID CLEWORTH One State Street Plaza 4474 Betsy Kerrison Parkway New York, NY 10004 BRYAN CAVE 11 Johns Island, SC 29455 Tel: 212.803.8829 Tel: 843.640.3713 Fax: 646.264.6800 www.bryancave.com Fax: 843.640.3966 [email protected] [email protected] Cut through the clutter NY/NJ/CT/PA WEST MUFG UNION BANK 03 LIESBETH SEVERIENS SARA CULLEY and mufgamericas.com/financial-institutions One State Street Plaza 173 Spreading Oak Drive New York, NY 10004 Scotts Valley, CA 95066 showcase your Tel: 212.803.8691 Tel: 831.438.8408 Fax: 646.264.6800 Fax: 831.438.8407 Products & Services in THE FINOVATE GROUP, INC. C2 [email protected] [email protected] findevr.com MIDWEST/SOUTHWEST CLASSIFIED ADVERTISING SHELLY SCHMELING DOMINIQUE GAGEANT The Banking Marketplace. One State Street Plaza One State Street Plaza New York, NY 10004 New York, NY 10004 Tel: 312.932.9392 Tel: 212.803.8882 [email protected] [email protected] Contact Dominique Gageant SERVICE CUSTOMER SERVICE DIGITAL ACCOUNT SERVICES SOURCEMEDIA at 212.803.8882 ALEX FELSER One State Street Plaza One State Street Plaza New York, NY 10004 or New York, NY 10004 Tel: 800.221.1809 Tel: 212.803.8671 Fax: 212.292.5216 [email protected] [email protected] [email protected]
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American Banker delivers world class banking and financial content to a top C-Suite audience of influencers, while offering unparalleled coverage of all the key issues facing the world’s financial sector. With unique insights and analysis, in-depth indsutry coverage, and a unique banking industry database, American Banker stands out one of the most comprehensive and respected voices in the financial media. AMERICAN BANKER A TRUE INDUSTRY LEADER Visit us at www.AmericanBanker.com/Magazine
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ELISHA WIESEL MIKE “In the same way he was dismayed at the lack of BOUCHET action over Syria, I think he would have been very disappointed at the direction this country seems “I felt a bump, like a jolt to be turning.” of electricity, because it Goldman Sachs’ chief information officer and the son of smelled just like money. It Holocaust survivor Elie Wiesel, saying his father, who died was invigorating.” last year, would have disapproved of Trump’s immigration ban German artist who hired a perfume expert to replicate the PRESIDENT smell of U.S. currency DONALD TRUMP RICHARD JAY SIDHU PAINTER “The best option would “They’re playing a game, have been to keep it, and they’re playing a but because of the game to make this regulatory environment person feel beholden that is not the best to Goldman Sachs.” option.” Law professor and former White Chairman and CEO of the “We’re going to be House ethics lawyer, on why Goldman expedited pay for its $9.6 billion-asset Customers doing a big number Bancorp, on deciding to sell former president, Gary Cohn, as its digital-only BankMobile unit on Dodd-Frank. he joins the Trump administration before the Durbin amendment The American kicks in dream is back.” Reiterating a campaign PETER NAGY pledge to dismantle the “Trump went from talking financial reform law PARRIS SANZ about Goldman Sachs “We hit a bump in the and Wall Street having road and blew out a tire. heavy influence on the We just need to change government, to them out the tire, and we’ll be literally running it.” back on the road.” Protestor outside Goldman’s CAN Capital’s acting CEO, on headquarters, complaining troubles at the online small- about its executives taking key BLOOMBERG NEWS business lender that prompted jobs in the Trump administration it to stop making new loans and let go of half of its employees MARTY JOHN ROBERTS “Now hold on. You’re saying that the MOSBY American people are too dumb to “This is an aircraft carrier, understand that if you say $10 plus a this isn’t a speedboat.” 20-cent surcharge, they can’t figure Vining Sparks analyst, caution- out that that’s $10.20?” ing that Citigroup likely will be Chief Justice of the U.S. Supreme Court, restructuring through 2017, questioning a Justice Department lawyer despite having achieved a post- in a case about credit card surcharges crisis milestone recently
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