Embracing Strategies and Overcoming Challenges to Unlock Growth

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Institutions are seeking a multitude of means to stimulate their growth.

Growth is mission-critical for banks but can be difficult to achieve due to various factors. A successful growth goal and outcome needs a systematic approach toward execution. Banks can achieve growth by driving toward metrics that are broken into components across the institution. But to ensure that growth is not merely a board-level catchphrase, banks need to establish a clear set of strategies and plans that lead to sustainable success.

Three variables drive growth at banks:
• Leadership and strategy.
• People and culture.
• Marketing.

Leadership and Strategy
Leadership and strategy are enormously impactful on any organization’s growth — or lack thereof. Winning banks are headed by executives who map out a clear vision and direction, backed by metrics, for where they want to take their organization. What gets measured gets managed. Accompanying this vision are strategies that banks can use to articulate growth goals and objectives throughout their organization.

Clarity of vision, open and transparent employee communication and simple messaging can all align growth objectives to people’s specific roles in the organization. This can boost understanding of their roles in the larger machinery and morale among employees. Finally, management should emphasize how the institution will monitor progress against realistic metrics, with the highest levels of leadership retaining the ability to adjust course when necessary.

People and Culture
The confluence of people and culture is another major impact on the growth of banks. An institution is only as good as the individual. Banks must create a team of motivated employees who are aligned with the vision and values of their leaders. Clear and transparent communication can foster a culture rooted in innovation, collaboration and customer-centricity directed toward growth.

Marketing
The third major impact on growth is marketing, both strategic and tactical. Banks that have a firm understanding of their account holders’ current financial needs, their target markets and how to best serve them can effectively leverage marketing to foster growth. In a world of digital touchpoints, staying competitive means providing personalized and quantified marketing campaigns that aim to reach, connect, engage and ultimately spur action that positively impacts the bank’s growth trajectory.

Banks that work to align all three of these elements have a good chance of achieving their growth goals and sustainable success while gaining a competitive advantage and delivering higher value to their customers. Failure to do so can spell trouble for banks, leading to stagnation, decline and potential closures.

Challenges That Stunt Growth
The financial services industry faces several challenges that broadly hinder its ability to grow. In recent years, the industry has contended with a shortage of skilled employees, turnover and overwhelming ongoing demands. Although digital transformation is essential, it can be expensive and result in banking feeling less personal if the digital element is not fully leveraged for customer communications. This, in turn, clashes with a bank’s growth objectives.

Despite digital transformation being one of the top goals in the financial services industry, banks may not fully grasp how to capitalize on their digital assets. Banks need to utilize their abundance of customer data to humanize digital interactions. Using data and AI insights can lead to increased customer engagement within multiple digital channels, which leads to growth. But how do banks do this with the severe shortage of the skills needed to lead and implement digital strategies?

Growth as a Service
Digital engagement and cross-selling are critical for banks, especially in a hypercompetitive landscape with high consumer expectations. Banks need to invest in the right technologies to do this at scale. And those banks focused on growth have a mandate to find and use these solutions effectively.

The benefit of “growth as a service,” otherwise known as GRaaS, is that it does not just stop at technology. Understanding what technology platforms to use is an important part of the puzzle — but it’s still only a part of the puzzle. With GRaaS, bank leaders can get a robust combination of technology and industry experts who can become an extension of your bank, while putting the tech to good use towards your growth goals.

As a holistic approach that enables the growth of loans and deposits, GRaaS can also support banks’ quest to acquire new customers and digital users. The “service” in GRaaS is what is so pivotal. It delivers that soup-to-nuts value: expertise that can conceptualize, define, implement, measure and optimize multiple, concurrent data-driven campaigns to serve a bank’s growth objectives.

How Banks Can Implement 3 Types of Automation Solutions

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Many banks struggle with digital transformation, often because they lack an effective strategy, clear governance over the transformation process or both.

Common and current inefficiencies include relying on manual reports created in spreadsheets across multiple systems, using email or word processing to capture and document approvals and serve as a system of record and inconsistent procedures across business functions.

A digital-first approach has increasingly become table stakes for financial institutions given consumer adoption. In 2021, 88% of U.S. consumers used a fintech, up from 58% in 2020, according to an annual report from Plaid. Customers expect a frictionless experience from their bank; traditional institutions need to have a plan in place to adapt accordingly.

Banks that don’t already have a digital transformation strategy need to establish one to anchor and govern their process for evaluating, prioritizing and executing digital transformation projects. One area for consideration on that digital journey should be automation, which can help organizations become more efficient and better mitigate a variety of risks. There are three intelligent automation solutions that can help banks reduce costs and improve productivity, among other benefits: robotic process automation, digital process automation and intelligent document processing.

  1. Robotic process automation: In general, RPA is task-based automation focused on accomplishing targeted components of business processes without the need for significant human intervention. RPA is capable of handling high volume, repetitive and manual tasks on behalf of human process owners, filling gaps where systems lack integration capabilities.
  2. Digital process automation: This type of automation focuses on optimizing workflows to orchestrate more collaborative work processes. DPA typically involves highly auditable data flows to improve regulatory compliance, and is scalable in a way that helps the organization adapt to evolving business needs.
  3. Intelligent document processing: IDP automation involves the extraction of semi-structured data from digital documents such as PDFs and image files. This transforms such documents into discrete data elements that can drive decision-making. IDP can enhance the scope of RPA and DPA solutions.

Questions to Ask
On a foundational level, banks need to have a clear, intentional link between technology spending and their overall business strategy if they want to succeed in their digital journey. Leadership teams need to understand issues with current processes to ascertain where streamlining those processes could offer the greatest return on investment. Here are some key questions to consider when evaluating process automation:

  • How does the automation solution reduce friction and improve the customer or user experience?
  • What is the associated market opportunity or efficiency gain enabled by the solution?
  • Is the institution potentially automating a bad process?
  • How does the solution align with what customers want?
  • How will the institution train its teams to ensure adoption?
  • How does the automation solution fit into the organization’s current processes, workflows and culture?
  • How will the bank manage the change and govern post-transformation?

Developing a Framework
Depending on where a bank is in its digital transformation journey, there are a variety of steps the organization will need to take to implement automation solutions. Those banks that are early in their journey can use the following steps to help:

  • Plan: Establish a framework for implementation, including objectives, teams, timelines and a project governance structure.
  • Assess: Understand the current state of functions across the business and identify process gaps where automation can help.
  • Design: Use best practices to establish a “fit for purpose” system design that meets business requirements and is scalable for future growth.
  • Execute: Configure the applications and integrations according to system design; validate, test and resolve any defects identified; migrate the approved configuration to the production environment.
  • Go live: Assess user readiness and deploy the solution.
  • Support: Execute an automation support strategy and establish an external support framework.
  • Monitoring: Establish and track key performance indicators to provide metrics for better visibility into the business.
  • Road map: Evaluate business unit usage and develop a plan for optimization and expansion to realize the company’s digital transformation vision and business goals.

Addressing each of these steps can help banking leadership teams develop a more thoughtful approach to automation solutions and improve their overall digital transformation strategy.

RankingBanking: Fueling Successful Strategies

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Bank Director’s recent RankingBanking study, sponsored by Crowe LLP, identified the best public banks in the U.S. While their strategies may vary, these banks share a few common traits that enable their success. These include a consistent strategy and a laser focus on customer experience, says Kara Baldwin, a partner and financial services audit leader at Crowe. Training and organizational efficiency also allow these bankers to retain that customer focus through challenging times. In the year ahead, banks will need to manage through myriad issues, including credit quality, net interest margin management and new regulatory concerns. 

Topics include: 

  • Cultural Consistency 
  • Organizational Efficiencies 
  • Customer Centricity  

Click here to read the complete RankingBanking study.

Getting Everyone on Board the Digital Transformation Journey

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Digital transformation isn’t a “one and done” scenario but a perpetual program that evolves with the ever-changing terrain of the banking industry. Competition is everywhere; to stay in the game, bank executives need to develop a strategy that is based, in large part, on what everyone else is doing.

According to a What’s Going On In Banking 2022 study by Cornerstone Advisors, credit unions got a digital transformation head start on banks: 16% launched a strategy in 2018 or earlier, versus just 9% of banks that had launched a strategy the same year. But it’s not only credit unions and traditional big banks that community financial institutions need to be watching. Disruptors like Apple and Amazon.com pose a threat as they roll out new innovations. Fintech players like PayPal Holding’s Venmo and Chime are setting the pace for convenient customer payments. And equally menacing are mortgage lenders like Quicken’s Rocket Mortgage and AmeriSave, which approve home loans in a snap.

An essential consideration in a successful digital transformation is having key policy and decision-makers on the same page about the bank’s technology platforms. If it’s in the bank’s best interest to scrap outdated legacy systems that no longer contribute to its long-term business goals, the CEO, board of directors and top executives need to unanimously embrace this position in support of the bank’s strategy.

Digital transformation is forcing a core system decision at many institutions. Bank executives are asking: Should we double down on digital with our existing core vendor or go with a new, digital platform? Increasingly, financial institutions are choosing to go with digital platforms because they believe the core vendors can’t keep up with best-in-class innovation, user experience and integration. Many are now opting for next-generation, digital-first cores to run their digital platform, with an eye towards eventually converting their legacy bank over to these next-gen cores.

Digital transformation touches every aspect of the business, from front line workers to back-end systems, and it’s important to determine how to separate what’s vital from what’s not. Where should banks begin their digital transformation journey? With a coordinated effort and a clear path to achieving measurable short- and long-term goals.

Here are some organization-wide initiatives for banks to consider as they dive into new digital transformation initiatives or enhance their current ones.

1. Set measurable, achievable transformation goals. This can include aspirations like improving customer acquisition and retention by upgrading customer digital touchpoints like the website or mobile app.
2. Prioritize systems that can produce immediate returns. Systems that automate repetitive tasks or flag incomplete applications create cost-efficient and optimal outcomes for institutions.
3. Invest in a discipline to instill a changed mindset. A bank that upgrades a system but doesn’t alter its people’s way of thinking about everything from customer interaction to internal processes will not experience the true transformational benefit of the change.
4. Conduct a thorough evaluation of all sales and service channels. This will enable the bank to determine not only how to impact the maximum number of customers, but also impart the greatest value to them through product assessment and innovation.
5. Get employees on board with “digital” readiness. Form small training groups that build on employees’ specialized knowledge and skills, rather than adopting a one-size-fits-all model. Employees that are well-trained in systems, processes and technology are invaluable assets in your institution’s digital transformation journey.

Banks must foster their unique cultures and hard-earned reputations to remain competitive in this ever-changing financial services landscape. As they build out digital strategies, they must continue fine-tuning the problem-solving skills that will keep them relevant in the face of evolving customers, markets and opportunities. Most importantly, banks must embrace a lasting commitment to an ongoing transformation strategy, across the organization and in all their day-to-day activities. For this long-term initiative, it’s as much about the journey as it is the destination.

Digital Transformation Starts With the Customer

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Digital transformation isn’t an end unto itself; the goal should ultimately be to make your customers’ financial lives easier. Without figuring out what customers need help with, a bank’s digital journey lacks strategic focus, and risks throwing good money after bad. In this video, Devin Smith, experience principal at Active Digital, walks through the key questions executives should ask when investing in digital transformation.

  • Customer Centricity
  • Creating a Cohesive Experience
  • Build versus Buy

Solving for Blind Spots in Bank M&A

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Mergers and acquisitions are a major driver of change and returns in the banking industry. As banking leaders head into mission-critical strategic planning sessions for 2023, now is the perfect time for boards and executives to map out the coming year’s organizational and budgetary priorities. Recognizing that M&A can be a principal platform for growth, what are the key considerations empowering banks of all sizes to increase their influence and scale their organizations?

Reducing Risk
Mitigating institutional risk is at the top of the list of priorities as banks begin exploring M&A opportunities. Ensuring your bank has a comprehensive plan, inclusive of division of labor, is critical for successful M&A. Does your bank have the right staff with expertise and experience at the planning table, so nothing gets missed?

Tapping into the knowledge base of current customers and how the bank plans to maintain those relationships is a smart first step. But what about potential prospects the bank wants to reach – what do those people want? What’s relevant to them?

Well-designed research programs are table stakes for successful M&A. Data on markets and prospects will give decision-makers insights beyond their customer base. Even if bank leaders feel familiar with a market, updated data-based intelligence provides a true picture of opportunity and risk, so banks can form a plan suited to their particular circumstances. Smart data will also help uncover if another financial company using similar branding and overlapping media, or presents other legal and reputational exposure before the deal is done. 

Enhancing Efficiency
Data and insights will also produce efficiencies in M&A by helping executives discover whether their brands and names bring unneeded baggage. Having a brand that requires exhaustive explanation can be an opportunity cost, resulting in time not spent focusing on a prospect’s needs and the bank’s options for meeting them. Likewise, marketing’s return on investment can be negatively impacted when brand elements are limiting or nondescript.

For example, brand names with specific vocations or cities may cause a prospect to wonder if that bank is truly designed to help someone like them; they may eliminate the bank from their list of options before exploring the institution’s breadth of services. Also, if banks with similar branding or name invest in advertisements or community sponsorships, a consumer may mistakenly assign the message or public relations value to a competitor because they miss the distinction between local banks with similar names.

Competitive research will help boards and executives take a comprehensive look at their brand to identify what parts of their story prospects don’t know and what is meaningful to them. Leveraging data can help ensure messages and communications are spotlighting parts of the brand story that will have the most resonance with consumers, and have distinct and competitive value propositions in that market.

While it’s true that a financial institution may have to change its name because of a merger, research will help identify names that represent a hurdle to overcome both legally and reputationally. In our experience, brand research can become a downstream activity executives assume they’ll take care of later, but we think of it as a critical part of due diligence. Further, a powerful research program helps ensure banks can make the most of the brand launch, when people may be more open to hearing a renewed brand story that’s relatable and relevant.

Targeting Growth
M&A allows institutions to elevate their expansion efforts and future-proof their organizations. Oftentimes when executives consider marketing and brand research in light of M&A, they point to customer satisfaction data. While this is an important measure for retention and engagement, a more comprehensive data set is indispensable to help ensure organizations aren’t operating on biases and blind spots.

Smart banks leverage robust research in the M&A process to help uncover opportunities, eliminate friction and help distinguish, define and differentiate their brands. A crucial component of retention and growth pre-and-post merger is employees. Research insights can predict potential turbulence and inform strategies to equip employees to champion change and maintain performance. They can also be key factors in recruiting the best talent to fuel growth in new markets.

While bank executives may be satisfied with their current positioning and their current markets, data-driven insights will help institutions leverage their assets and increase the influence of their brand in the merger process — allowing them to grow and go further.

The Nuts and Bolts on Executive Sessions

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A board’s success can depend on the strength of the independent directors. But as boards become more centralized around the CEO’s carefully choreographed meetings, there’s greater potential for kabuki-style processes, with all decisions eventually funneling through one member of management. Executive sessions may be instrumental to the strength of independent directors and should be a part of the board’s meeting schedule.

Most boards believe they hold management accountable. Nearly three-in-four (74%) of the directors, chairs and chief executives surveyed by Bank Director in 2021 said their board had several directors willing to ask difficult, challenging questions. Another 72% felt free to exercise their own independent judgement if they disagreed with a board decision. Yet, in Bank Director’s 2022 Governance Best Practices Survey a year later, 24% believe that holding management accountable would improve the governance process.  

Executive sessions can be a powerful tool in the toolbox for independent directors to hold management accountable and allow room for directors to gain a stronger understanding of certain concepts before coming to a decision. 

“Whoever is chairman controls the agenda,” says James McAlpin Jr., a partner at the law firm Bryan Cave Leighton Paisner LLP, which has sponsored Bank Director’s annual Governance Best Practices Survey. Sometimes, the CEO retains the chair title and directs the agenda. Sometimes, an independent director retains the chair title. Boards have to decide which model works best for them, while ensuring independent directors have a voice. Executive sessions help ensure that directors can discuss scenarios when the chairs “may not raise the matters themselves,” he adds.

By addressing such topics in open forums, directors can determine if they’re viewing certain issues as other members do or if there’s a lack of cohesion on strategies. Discrepancies in opinions or doubts on a strategy may not come to the surface if the issue isn’t brought up during the normal process of a board meeting. 

Executive sessions occur when a group of directors call for time to discuss an item or topic, without the presence of specific individuals. There’s no hard-fast rule, although they generally involve independent directors without the presence of executives. This typically would exclude the CEO, if he or she sits on the board. But it could include a group of directors that do not participate in a certain committee, for instance, but who can provide broader input. Or it could include the CEO but exclude everyone else in the room who doesn’t sit on the board. 

Since executive sessions aren’t transcribed, they allow for a free flow of conversation. This gives the directors a chance to express their feelings on certain topics, bring up concerns or even ask questions of a sensitive nature. While it may seem as if such sessions would be awkward to call, since the CEO or other executives may wonder why such conversation needs to take place, there’s a tactic to counteract this potential. 

“It’s recommended to have them on regularly scheduled basis,” says Charles Elson, the founding director of the Weinberg Center for Corporate Governance at the University of Delaware. By building them into the agenda, he adds, they don’t become an unusual, uncomfortable situation since everyone knows when potential leadership issues will be discussed. Among directors and CEOs surveyed by Bank Director in 2021, 38% said the board held an executive session at the end of every board meeting, while 16% held them quarterly and 24% called one whenever independent directors wanted one.

For companies listed on the New York Stock Exchange (NYSE) or Nasdaq, it’s less of a social concern and more of a proper practice. Both exchanges require companies to incorporate executive sessions of the independent directors on a regular basis. Nasdaq defines that as at least twice a year (if not more), while the NYSE leaves the definition more open-ended. Such executive sessions provide an outlet for directors at community and private banks as well, serving as a valuable way to address concerns without worrying about hurting others’ feelings or working relationships.

Historically, executive sessions have been a tool of senates and parliaments, but they began to make their way to the boardroom at a greater rate in the mid-1990s. Directors needed a way to speak on certain topics off the record; this resulted in having small meetings with one or two directors over lunch or on the way to the parking lot. Instead, executive sessions formalize these conversations, encouraging directors to speak as a group. This can not only lead to a greater awareness of a certain type of thinking among directors but can also provide stronger conclusions, questions and coordinated insights for management or the board at large.

“It’s not so much hiding [issues] but addressing them in an appropriate way,” says Chip MacDonald, a financial services lawyer at the law firm Jones Day. “Whether it’s a committee function or whole board function, if you have full-time employees or officers on the board, you may want to exclude them.”

McAlpin, who works with boards at community and family banks, has often suggested that a board move to executive session when discussing certain topics that require more room for debate or discussion. 

“They provide particularly strong value when there’s an issue that’s difficult to discuss in front of the CEO or chair,” he says. “It’s better to have the discussion than not and if you do it on a regular basis, it provides open time for people to just share notes.”

The areas of discussion that are addressed during a session can run the gamut, from strategy, managerial issues, regulatory concerns or an investigation. The reason for the session will determine the people that may be present during the conversation.

The discussions are off the record, but this isn’t meant to imply that there’s nefarious conversations happening. In some cases, it might provide an open forum for direction on a new strategy. Or it may even allow for “due process,” says MacDonald. 

For instance, say there’s an accusation made against a certain member of the management team. While it’s important to scrutinize, a board may not want to make it publicly known until they have a chance to investigate the impropriety. Why? First, the board has to make sure that the accusation has validity before divulging it in a board meeting transcription. Second, the board must ensure it has a plan in place to address the issue. The closed-door executive session provides room for directors to plan.

But executive sessions also offer a way to address regular aspects of the oversight role. For instance, when discussing pay potential of top executives, the compensation committee will meet without any executives around to determine pay. This will be presented to the full board. If directors want to discuss the committee’s findings without offending certain individuals on the board — like the CEO — then an executive session would be prudent in such cases. 

The same tools can address potential strategies presented to the board. Or, in the case of a regulatory concern, the directors may want to discuss with fewer people so they have a clear understanding of the problem before coming to a decision. 

For an executive session to take place, there’s no specific quorum required, and there are no rules around whether executives should stay or go. In some organizations, a specific independent director runs all executive sessions; in others, any director can call one at any time. In both cases, the directors that seek an executive session or the director that handles executive sessions — often a lead independent director — can determine who stays and who goes. 

There’s also no requirement that the directors inform the CEO, or anyone else not in on the conversation, about what occurred during the session. But experts advise that it’s often good practice to have one director speak with the CEO after the conversation to provide a high-level recap of the talk. This doesn’t need to occur — and probably shouldn’t if directly addressing CEO wrongdoing. The regular communication with a CEO, however, can ease the potential of imaginations running wild. 

“It’s probably never a comfortable moment,” says McAlpin. “They may always wonder what is discussed in the room; best practice, have the lead outside director give an overview of what was discussed.”

The session cannot come to a decision that’s final or binding. Instead, it may provide a game plan in addressing an issue with the full board. Once the game plan is set, the directors can bring it to the full board for a vote. 

Executive sessions ensure that the directors’ game plan has the input of everyone involved. With that insight, then the board can operate with a full and robust voice. Failing to do so, would “be a breach of duty,” says MacDonald.

Digitizing Documentation: The Missed Opportunity in Banking

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To keep up in an increasingly competitive world, banks have embraced the need for digital transformation, upgrading their technology stacks to automate processes and harness data to help them grow and find operational efficiencies.

However, while today’s community and regional banks are increasingly making the move to digital, their documentation and contracting are still often overlooked in this transformation – and left behind. This “forgotten transformation” means their documentation remains analog, which means their processes also remain analog, increasing costs, time, data errors and risk.

What’s more, documentation is the key that drives the back-office operations for all banks. Everything from relationship management to maintenance updates and new business proposals rely on documents. This is especially true for onboarding new clients.

The Challenges of Onboarding
Onboarding has been a major focus of digital transformation efforts for many banks. While account opening has become more accessible, it also arguably requires more customer effort than ever. These pain points are often tied back to documentation: requesting multiple forms of ID or the plethora of financial details needed for background verification and compliance. This creates friction at the first, and most important, interaction with a new customer.

While evolving regulatory concerns in areas such as Know-Your-Customer rules as well as Bank Secrecy Act and anti-money laundering compliance have helped lower banks’ risks, it often comes at the expense of the customer experience. Slow and burdensome processes can frustrate customers who are accustomed to smoother experiences in other aspects of their digital lives.

The truth is that a customer’s perception of the effort required to work with a bank is a big predictor of loyalty. Ensuring customers have a quick, seamless onboarding experience is critical to building a strong relationship from the start, and better documentation plays a key role in better onboarding.

An additional challenge for many banks is that employees see onboarding and its associated documentation as a time consuming and complicated process from an operations perspective. It can take days or even weeks to onboard a new retail customer and for business accounts it can be much worse; a Deloitte report suggests it can take some banks up to 16 weeks to onboard a new commercial customer. Most often, the main problems in onboarding stem from backend processes that are manual when it comes to documentation, still being largely comprised of emails, word documents and repositories that sit in unrelated silos across an organization, collecting numerous, often redundant, pieces of data.

While all data can be important, better onboarding requires more collaboration and transparency between banks and their customers. This means banks should be more thoughtful in their approach to onboarding, ensuring they are using data from their core to the fullest to reduce redundant and manual processes and to make the overall process more streamlined. The goal is to maximize the speed for the customer while minimizing the risk for the bank.

Better Banking Through Better Documentation
Many banks do not see documentation as a data issue. However, by taking a data-driven approach, one that uses data from the core and feed backs into it, banks transform documents into data and, in turn, into an opportunity. Onboarding documents become a key component of the bank’s overall, end-to-end digital chain. This can have major impacts for banks’ operational efficiencies as well as bottom lines. In addition to faster onboarding to help build stronger customer relationships, a better documentation process means better structured data, which can offer significant competitive advantages in a crowded market.

When it comes to documentation capabilities, flexibility is key. This can be especially true for commercial customers. An adaptable solution can feel less “off the shelf” and provide the flexibility to meet individual client needs, while giving a great customer experience and maintaining regulatory guidelines. This can also provide community bankers with the ability to focus on what they do best, building relationships and providing value to their customers, rather than manually gathering and building documents.

While digitizing the documents is critical, it is in many ways the first step to a better overall process. Banks must also be able to effectively leverage this digitized data, getting it to the core, and having it work with other data sources.

Digital transformation has become an imperative for most community banks, but documentation continues to be overlooked entirely in these projects. Even discounting the operational impacts, documents ultimately represent the two most important “Rs” for banks – relationships and revenue, which are inextricably tied. By changing how they approach and treat client documentation, banks can be much more effective in not only the customer onboarding process, but also in responding to those customer needs moving forward, strengthening those relationships and driving revenue now and in the future.

A Look Inside Fifth Third’s ESG Journey

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Mike Faillo was recently promoted to the new role of chief sustainability officer at Fifth Third Bancorp, with a team focused on the Cincinnati-based regional bank’s environmental, social and governance (ESG) program, including its climate strategy and social and governance reporting. Faillo started his career in public accounting at PwC in 2008, just in time for the collapse of Lehman Brothers and the onset of the financial crisis. He spent the next several years auditing a trillion dollar bank, and then working on Comprehensive Capital Analysis and Review (CCAR) stress tests and developing resolution plans.

Faillo says those experiences informed his journey to lead ESG at $211.5 billion Fifth Third. 

When he joined the bank’s investor relations team in 2019, he dug into Fifth Third’s ESG profile and learned that the organization wasn’t effectively telling its story. So with support from the bank’s executive leadership team, including Chairman and CEO Greg Carmichael, Faillo transformed Fifth Third’s corporate social responsibility report into a broader, data-driven report in 2020 that tells the bank’s complete ESG story. Faillo jokes that he went from writing about the death of a bank through living wills to the life of it in the ESG report.

In this edition of the Slant podcast, Faillo also discusses the need for agility and teamwork on ESG, and how he works across the organization to uncover opportunities for the bank. He also digs into the complexities of measuring carbon emissions, and why it’s a great opportunity to work with business clients to help them on their own journeys to net zero. And he addresses what’s easiest — and hardest — for banks to get right on ESG. The interview was conducted in advance of Bank Director’s Bank Audit & Risk Committees Conference, where Faillo appears as part of a panel discussion, “How Banks Are Stepping Up Their ESG Plans.”

Opportunities For Transformative Growth

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The bank space has fundamentally changed, and that has financial institutions working with more and more third-party providers to generate efficiencies and craft a better digital experience — all while seeking new sources of revenue. In this conversation, Microsoft Corp.’s Roman Chwyl describes the rapid changes occurring today and how software-as-a-service solutions help banks quickly respond to these shifts. He also provides advice for banks seeking to better engage their technology providers.

Topics addressed include:

  • Focusing Technology Strategies
  • Partnership Considerations
  • Leveraging Digital for Growth
  • Planning for 2022 and Beyond