The Seven Facets of a Digital Bank

If one were to start a new digital bank today, what would the defining characteristics be? Although there are some similarities to traditional bank counterparts, digital-only banks are in many respects very different. Here are the seven facets of a digital bank that will help drive its success.

Adjacent to each facet are organizations, including digital-only and traditional banks, as well financial technology companies, that Bank Director believes embody each characteristic.

Women Who Serve as CEOs Talk About the Glass Ceiling

2-24-15-OTC.pngThe banking industry’s top ranks have long been considered an “old boys’ club,” if not forbidden to women, at least unwelcoming. Even today, only one of America’s 25 largest banks has a woman in the CEO slot: Beth Mooney, chairman and CEO of KeyCorp.

That’s why I was surprised to discover more than one-third of the 46 banks that trade on our OTCQX marketplace have a woman in a senior leadership role. In fact, two OTCQX banks have a female CEO and CFO and one bank has a female chairwoman.

But the gender diversity doesn’t stop there. Of the 15 OTCQX banks surveyed, several reported a high number of women in senior leadership roles. In one bank, up to 80 percent of the senior leadership was female. The two banks with a female CEO and CFO also reported a high concentration of women on their boards.

Click image for complete list

Is there a correlation between being a transparent, shareholder-friendly OTCQX community bank and having more female officers and board members? Who knows, but I thought I’d ask female OTCQX bank executives about their thoughts on gender diversity in banking, what unique traits women bring to the banking profession and their advice to young female bankers who seek to ascend the ladders at their companies. Here are their thoughts:

Do you think gender diversity is important on community bank boards and management? Why or why not?
“… gender diversity is just as important as professional, educational, and ethnic diversity on a bank board and in management.” —Janet Silveria, president and CEO of Community Bank of Santa Maria (OTCQX: CYSM), a $211-million asset community bank serving Santa Maria, Orcutt and Lompoc, California.

“Yes, as is overall diversity including education, experience, ethnicity, etc.  I think having a female on the board changes the communication and dynamics of a board of mostly men in a positive way.” —Tamara Gurney, president and CEO of Mission Valley Bancorp (OTCQX: MVLY), holding company for Mission Valley Bank in Sun Valley, California, with $260 million in assets.

What unique trait or perspective do you think women bring to bank boards and the C-suite?
“… women tend to be more practical and analytical. They tend to work better as a team, and see things more globally.” —Silveria.

“… women are very efficient and good at multi-tasking.  In addition, many women are very good at decision making and a caring approach to staff development and team building.” —Colleen Brown, senior vice president, treasurer and CFO at Standard Financial Corp. (OTCQX: STND), parent company of Standard Bank, a Pennsylvania chartered savings bank serving Allegheny, Westmoreland and Bedford Counties in Pennsylvania and Allegany County in Maryland.

What advice would you give a woman looking to attain a leadership position in banking?
“Be yourself; don’t flaunt feminism, but you don’t need to act like a man. Embrace your feminine perspective and all the positive attributes that come with being a woman. Be assertive; stand up for your convictions, but always be respectful and kind.” —Silveria

“Use the strengths of being a woman, finding balance between the more nurturing, caring side and the drive typically associated with masculinity. You need to show strength, conviction, confidence and assertiveness, but the caring and compassion are critical as well. Believe in yourself and be yourself; don’t try to act like a man.” —Gurney

When asked if they actively recruit or mentor young women at their companies, most survey respondents said that they take a measured approach, preferring to hire the “best person for the job” rather than hire based on gender.

As to a pay disparity between male and female bankers, most of the women agreed it still exists, but at least one sees a silver lining: “I have seen a slight improvement,” says Gurney.

Why Aren’t There More Women Leaders in Banking?

2-11-15-Jack.pngI’ve never understood why there aren’t more women CEOs and directors in corporate America. Or a woman president for that matter.

It’s no secret (least of all to them) that women have had a difficult time penetrating the upper ranks of senior management in U.S. companies, as well as the boardroom.  My colleague, Managing Director Naomi Snyder, wrote about this in the second quarter 2014 issue of Bank Director magazine in her very insightful feature story, “Door Half Closed: Women and Minorities on Bank Boards.” It doesn’t make sense to me that any company would significantly shrink the available talent pool by failing to actively recruit or promote women into C-Suite position, or appoint them to the board.

My views on this were perhaps shaped by my experience growing up. My mother, who turned 93 in December, often complains that she can’t get as much done as she used to and stubbornly refuses to accept that maybe it’s because she is, well, 93! (Age is something that she makes few concessions to.) I grew up in a working class family and my mother worked outside of the home, as did my father. He owned a construction company. She was a branch manager for a small savings and loan and later worked as an auditor for a CPA firm. My mother also kept the books for my father’s business and would spend several hours every Thursday night writing out pay checks for his employees. The construction business has its ups and downs and my father often said that the money she earned was as important as the money he earned because sometimes her money was the only money coming in. Their marriage had a great deal of equality when it came to most things—money being one of them—and he was a great role model for me, as was (and is) she.  

The odd thing about the struggle that women face climbing into the upper reaches of corporate management and governance is that a majority of Americans consider women just as capable of being good political and business leaders as men, according to a recent study by the highly respected Pew Research Center. “[Most] Americans find women indistinguishable from men on key leadership traits such as intelligence and capacity for innovation, with many saying they’re stronger than men in terms of being compassionate and organized leaders,” the survey states. 

Why, then, are women still being excluded from power positions in corporate America? Again, the Pew survey: “[Topping] the list of reasons, about four-in-ten Americans point to a double standard for women seeking to climb to the highest levels of either politics or business, where they have to do more than their male counterparts to prove themselves. Similar shares say the electorate and corporate America are just not ready to put more women in top leadership positions.”

There has been some progress in recent years, at least on the business side. The website posts a list of women who are CEOs of S&P 500 companies, including Mary Barra at General Motors Corp. Who would have thought that a woman would ever run a U.S. car company? Unfortunately the only woman bank CEO on the list is Beth Mooney at KeyCorp. also reports that only 19 percent of directors at U.S. stock index companies are women, and I doubt the numbers for the banking industry are much better than that. 

The great majority of bank CEOs are men, as are most bank directors. It is this mostly-male group that determines who gets promoted and appointed to positions of power within the industry, and it is within their means to begin to balance banking’s gender dynamic. If basic fairness and equity doesn’t lead them to do so, then this should: Roughly half of the industry’s customers are women, and shouldn’t any company’s leadership reflect to a large degree its customer base?

Getting the Best People to Work For Your Bank

Filmed during Bank Director’s 2013 Bank Executive and Board Compensation conference in Chicago in early November. A panel of CEOs at top performing banks discuss how their companies develop executives, attract leadership and approach compensation in today’s highly competitive and economically challenging world.

Video Length: 55 minutes

About the Speakers:

Leon J. Holschbach, President & CEO, Midland States Bancorp, Inc.
Leon Holschbach is the president & CEO of Midland States Bancorp, Inc. Prior to joining Midland, Mr. Holschbach held the positions of region market president, community bank group at AMCORE Bank, N.A., president and chief executive officer of AMCORE Bank North Central N.A. and president of Citizen’s State Bank in Clinton, Wisconsin.

Ron Samuels, Chairman & CEO, Avenue Bank
Ron Samuels is the chairman & CEO at Avenue Bank. He is an experienced leader, executive and marketer and has been a banker in Nashville, TN for 40 years. Mr. Samuels was a founder in 2007 of Avenue Bank, which today has assets of more than $725 million. Mr. Samuels is recognized as one of Nashville’s most visible and engaged community leaders, having concluded his term as chairman of the Nashville Chamber of Commerce in July 2010, along with service on many other boards and committees in the arenas of economic development, professional sports, education and more.

Frank Sorrentino III, Chairman & CEO, ConnectOne Bank
Frank Sorrentino is the chairman & CEO of ConnectOne Bank. He is responsible for its business development plan, serves as the community liaison, sits on the loan committee and serves as the bank’s spokesperson. Mr. Sorrentino has been instrumental in developing the bank’s branch and expansion strategy and oversees all marketing activities.

Repositioning the Internal Audit from Good to Strong

Bankers today face the pressure of doing more with fewer resources. Every business function, including internal audit, is expected to bring value to an institution. In this video, Lynn McKenzie, partner with KPMG LLP, reviews what banks can do to improve internal audit by increasing board engagement, building strong leadership and developing more effective auditing processes.