Survey Results: Crisis Reinforces Need for Talent

Throughout the Covid-19 pandemic, banks have relied on their employees to counsel customers and process billions of dollars of Paycheck Protection Program loans — not to mention working behind the scenes as they adapt to a virtual work environment.

The crisis reinforces the old adage that good talent is hard to find. “Hire right,” investor Ray Dalio once wrote. “The penalties of hiring wrong are huge.”

Bank Director’s 2020 Compensation Survey, sponsored by Compensation Advisors, confirms that talent can be difficult to find in key areas. More than 70% of directors, CEOs, human resources officers and other senior executives responding to the survey point to skills that are particularly difficult to hire and retain, such as information security, technology, lending and risk.

But hiring less-skilled staff also proves challenging: Half indicate that it’s “somewhat” or “very” difficult to attract and retain entry-level employees who fit into the organization’s culture. What’s more, concerns around recruiting younger talent have risen slightly in the past three years: 30% cite this as a top-three challenge this year, compared to 21% in 2017.

Yet, 79% believe their bank offers an effective compensation package that helps attract and retain top talent.

This apparent disconnect could stem from the generation gap between bank leadership and younger staff. Two-thirds of survey respondents are over 55, while more than half of their bank’s workforce is 45 or younger. One can infer that these employees, mostly Gen Z and millennials, primarily occupy entry and mid-level positions.

The survey was distributed in March and April, as the coronavirus forced banks to rapidly shift operations to work-from-home arrangements and adjust branch procedures. Ninety-two percent of respondents indicate their bank instituted or expanded remote work, and 80% introduced or expanded flexible scheduling in response to Covid-19. As the industry emerges from this crisis, how will this impact corporate culture moving forward, as well as expectations from prospective employees?

Key Findings

Covid-19 Response
In addition to adapting to remote and flexible work arrangements, more than half expanded paid leave to encourage staff to stay home if they showed symptoms of the virus. In addition, 81% have limited service to drive-thru only, and 78% limited in-person meetings to appointment only, in order to keep customers and staff safe.

Top Compensation Challenges
The top two compensation challenges that respondents identify remain the same compared to last year: tying compensation to performance (48%), and managing compensation and benefit costs (44%).

Few Measure D&I Progress
Stakeholders have increasingly paid attention to corporate efforts around diversity & inclusion. However, 42% of respondents say their bank lacks a formal D&I program, and doesn’t track progress toward hiring and promoting women, minorities, veterans or individuals with disabilities. Of the metrics most frequently tracked by banks, 58% look at the percentage of women at different levels of the bank, and 51% at the percentage of minorities. Less than half track the gender pay gap, participation of women or minorities in development programs, or participation by employees in D&I-focused education and training.

CEO Retirement
More than 20% expect their CEO to step down within the next three years; an additional 7% are unsure whether their CEO will retire. This metric is, naturally, age dependent: For CEOs over the age of 65, more than half are expected to retire.

CEO, Board Pay Increased
Median total CEO compensation increased in fiscal year 2019, to $649,227. Pay ranged from a median of $251,000 for banks under $250 million to $3.6 million for banks above $10 billion. More than 70% measure CEO performance against the bank’s strategic plan and corporate goals.

To view the full results of the survey, click here.

The High Cost of Good Talent and the Value of Retention

How would your bank fare if your top-performing lenders left tomorrow?

A bank succeeds because of its employees who grow the bank and keep it safe. The departure of these employees can impose massive costs to a bank in lost relationships and the effort to find new personnel. Has management at your bank adequately assessed the financial cost and risk of losing its key employees? What would be the financial impact to the bottom line and shareholder value if a key employee is not retained?

The direct cost of replacing a high-performing employee is up to 213% of the annual salary associated with the position, according to research by the Society for Human Resource Management. Total costs can rise to as much as 400% when considering indirect expenses. Direct costs include screening, interviewing, acquisition cost, onboarding and training, while indirect costs include lost productivity, short-staffing, coverage cost and reduced morale.

The following are hypothetical examples that help illustrate both the costs and risks associated with replacing a key employee at a bank:

Example 1: A lender in their early 40s who maintains a $40 million loan portfolio with a 4% margin joins a competitor bank. The estimated earnings on the lender’s portfolio were $1.6 million. If 30% of the portfolio moves to the competing bank, that would create an annual impact of $480,000. The bank stands to lose $1.4 million in three years. Assuming this lender generates $10 million in new loans annually, that adds another $400,000 in additional lost income. Losing this one lender results in lost annual revenue of almost $900,000.

Now imagine the bank has seven lenders with similar portfolios and margins. If the entire team left, the lost revenue potential could be over $6 million annually.

Example 2: A bank loses its compliance officer. In addition to the direct financial costs of replacing the officer, this could cause both short- and long-term regulatory and financial risks and challenges. If the officer had a salary of $90,000, the cost to replace them is between $191,700 and $360,000, using the 213% and 400% of base salary replacement cost assumptions. There could also be additional costs associated with potential outsourcing the compliance services until the bank can hire a new compliance officer.

Fortunately, in both of these examples, management preemptively responded by strategically designing compensation programs to retain the officers. Quantifying the lost revenue and costs to replace the employees demonstrated the substantial risks to the bank, and convinced executives of the  inadequacies of the compensation plan in place.

It is critical that banks design and implement competitive compensation plans that provide meaningful benefits. Some compensation committees believe a salary and an annual performance bonus are adequate to retain key employees. But based on our experience, banks with higher retention rates offer two to four types of compensation plans, in addition to salary and bonus. Examples include employee stock ownership plans, stock options, restrictive stock, phantom stock, profit sharing, salary continuation plans and deferred compensation plans. These plans provide for payments either at retirement or while employed, or a combination of pre- and post-retirement payments. Banks can strategically design and customize these plans in ways that incentivize strong performance but fit the demographics and needs of the key personnel. There is no one-size-fits-all plan.

Additionally, nonqualified executive benefit programs such as supplemental executive retirement plans (SERPs) and deferred compensation plans (DCPs) can help your key employees accumulate supplemental funds for retirement. Their flexibility allows them to be used alongside other forms of compensation to enhance your bank’s overall executive benefit program by offering additional incentives and incorporating special features intended to retain top performers who may not be focused on retirement. For example, a deferred compensation plan with payments timed to when the officer’s children are college age can be highly valued by an officer fitting that demographic.

The significant potential financial impact when your bank loses key employees quantifies and underlines the value and importance of retention, so it is paramount that executives meaningfully and competitively compensate these employees. Banks without a strong corporate culture and a competitive compensation plan in place are at a higher risk of losing key employees and may have an emerging potential retention problem.

Using Succession Planning to Unlock Compensation Challenges

compensation-9-16-19.pngSuccession planning could be the key solution boards can use to address their biggest compensation challenges.

Succession planning is one of the most critical tasks for a bank’s board of directors, right up there with attracting talented executives and compensating them. But many boards miss the opportunity of allowing succession planning to drive talent retention and compensation. Banks can address two major challenges with one well-crafted plan.

Ideally, succession planning is an ongoing discussion between executive management and board members. Proper planning encourages banks to assess their current talent base for various positions and identify opportunities or shortfalls.

It’s not a static one-and-done project either. Directors should be aware of the problems that succession planning attempts to solve: preparing future leaders, filling any talent voids, attracting and retaining key talent, strategically disbursing training funds and ultimately, improving shareholder value.

About a third of respondents in the Bank Director’s 2019 Compensation Survey reported that “succession planning for the CEO and/or executives” was one of the biggest challenges facing their banks. More popular challenges included “tying compensation to performance,” “managing compensation and benefit costs,” and “recruiting commercial lenders.”

But in our experience, these priorities are out of order. Developing a strategic succession planning process can actually drive solutions to the other three compensation challenges.

There are several approaches boards can use to formulate a successful succession plan. But they should start by assessing the critical roles in the bank, the projected departure dates of those individuals, and information and guidance about the skills needed for each position.

Boards should be mindful that the current leaders’ skill sets may be less relevant or evolve in the future. Susan Rogers, organizational change expert and president of People Pinnacle, said succession planning should consider what skills the role may require in the future, based on a company’s strategic direction and trends in the industry and market.

The skills and experiences that got you where you are today likely won’t get you where you need to go in the future. We need to prepare future leaders for what’s ahead rather than what’s behind,” she said.

Once a board has identified potential successors, it can now design compensation plans that align their roles and training plans with incentives to remain with the organization. Nonqualified benefit plans, such as deferred compensation programs, can be effective tools for attracting and retaining key bank performers.

According to the American Bankers Association 2018 Compensation and Benefits Survey, 64% of respondents offered a nonqualified deferred compensation plan for top management. Their design flexibility means they can focus on both longer-term deferrals to provide retirement income or shorter-term deferrals for interim financial needs.

Plans with provisions that link benefits to the long-term success of the bank can help increase performance and shareholder value. Bank contributions can be at the board’s discretion or follow defined performance goals, and can either be a specific dollar amount or a percentage of an executive’s salary. Succession and training goals can also be incorporated into the plan’s award parameters.

Such plans can be very attractive to key employees, particularly the young and high performing. For example, assume that the bank contributes 8% of a $125,000 salary for a 37-year-old employee annually until age 65. At age 65, the participant could have an account balance equal to $1,470,000 (assuming a crediting rate equal to the bank’s return on assets (8%), with an annual payment of $130,000 per year for 15 years).

This same participant could also use a portion of the benefit to pay for college expenses for two children, paid for with in-service distributions from the nonqualified plan. Assume there are two children, ages three and seven, and the employee wants $25,000 a year to be distributed for each child for four years. These annual $25,000 distributions would be paid out when the employee was between ages 49 and 56. The remaining portion would be available for retirement and provide an annual benefit of $83,000 for 15 years, beginning at age 65.

Boards could use a plan like this in lieu of stock plans that have similar time horizons. This type of arrangement can be more enticing to younger leaders looking at shorter, more mid-term financial needs than a long-term incentive plan.

And many banks already have defined benefit-type supplemental retirement plans to recruit, retain, and reward key executives. These plans are very popular with executives who are 45 and older, because they provide specific monthly distributions at retirement age.

It is important that boards craft meaningful compensation plans that reward older and younger executives, especially when they are vital to the bank’s overall succession planning efforts and future success.

Exclusive: How KeyCorp Keeps Diversity & Inclusion in Focus

Banks large and small are focusing more sharply on diversity and inclusion as a way to attract and retain the best talent, regardless of gender, race, ethnicity or sexual orientation.

One bank demonstrating a robust D&I program is $141.5 billion asset KeyCorp, headquartered in Cleveland, Ohio. It’s perhaps no coincidence that it’s the largest bank led by a woman: CEO Beth Mooney, who took the reins at the superregional bank in 2011 to become the first female CEO of a major U.S. financial institution.

Heading KeyCorp’s D&I efforts since 2018 is Kim Manigault, who joined Key in 2012. She previously served as the chief financial officer in the bank’s technology and operations groups; before that, she spent 12 years at Bank of America Corp. in similar roles.

“I’ve had lots of different opportunities at different organizations, but I’ll say in coming to Key, what I realized here is a really firm and demonstrated commitment to creating opportunities for women as well [as men] in our senior ranks,” Manigault told Bank Director Vice President of Research Emily McCormick, who interviewed her as part of the cover story for the 2nd quarter 2019 issue of Bank Director magazine. (You can read the story, “A Woman’s Place is in the C-Suite,” by clicking here.)

A strong D&I strategy isn’t solely the domain of big banks. In this transcript—available exclusively to members of our Bank Services program—Manigault delves into KeyCorp’s intentional and deliberate focus on diversity and inclusion, and shares the tactics that work within the organization.

She also discusses:

  • Components of KeyCorp’s D&I program
  • Measuring Success
  • Creating a Culture of Inclusion

The interview has been edited for brevity, clarity and flow.

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 Download transcript for the full exclusive interview

Pat Summitt’s Model on Talent Development


talent-1-16-19.pngWith unemployment at its lowest point since 1969, the competition for top talent is as fierce as it has been in years.

While many experienced banking professionals know well that the industry offers challenges, rewards and opportunities, many millennials and Gen Z’ers remain reluctant to pursue a career in banking.

The high-performing banks of the future will be those that can translate those benefits to attract, develop, reward and retain top talent. There are two places your bank can start this process.

Banks already provide strong salaries, bonus opportunities, health-care coverage and retirement plans. The challenge the industry now faces is how to make the banking industry more attractive to today’s generation of younger recruits.

What a bank should consider includes flexible work hours, the ability to work remotely and cross-training. If the bank can demonstrate a track record and policy of promoting from within, the job opportunity will be even more attractive to a potential hire.
Another recruiting tool we have often used successfully, particularly for younger individuals, is a deferred compensation program designed to help pay down student loans, with vesting provisions that encourage continued employment at the bank.

But once you acquire top talent, how do you develop them as future leaders?

First, an ongoing coaching and mentoring program is critical.

Pat Summitt, the legendary University of Tennessee women’s basketball coach who won more games than any other NCAA Division I women’s coach, recruited talented players.

Once they joined the team, she delivered an individualized plan to improve each player’s weaker areas. She also provided regular feedback and monitoring. This method of coaching and mentoring led to 1,098 career victories and Hall of Fame success as a coach and leader. So, how can Summitt’s approach help your bank?

When developing the bank’s future senior management, the board and the CEO should ensure they agree on both the long-term strategic plan and the necessary skills to execute that plan.

They should then identify the internal candidates best suited to develop and provide them with opportunities for growth. It is important the bank develop a culture of honest assessment of strengths and weaknesses, and provide ongoing mentoring and feedback.

Even with top talent, it is unlikely that Summitt would have achieved the success she did had she provided her players with feedback only once a year.

In addition to an ongoing assessment and coaching program, the bank should discuss a career path for potential leaders, and the company should provide the necessary training and cross training, when feasible, to allow promising employees to learn each facet of the bank’s operations. Thorough training programs can be very attractive in recruitment and are invaluable to the development of a leader.

Once the bank has invested in developing up-and-coming leaders, rewarding them appropriately and incenting them to remain with your bank is critical. No doubt, your competitors will recognize the strong leaders you are developing and actively recruit your talent, requiring your bank to maintain not just competitive salaries, but methods of keeping your compensation programs unique and desirable.

An example is a nonqualified deferred compensation plan that pays in-service distributions at the end of certain periods, such as three- or five-year time frames. This type of plan typically would include performance-based compensation tied to specified goals.

Additional amounts can be credited to the deferred compensation account and distributed at the end of a longer period (such as 10 years), providing even more incentive to stay with the bank.

If the individual terminates before the applicable distribution period(s), undistributed funds can be allocated to hire a talented replacement or credited back to the bank’s income.

We have found these flexible deferred compensation arrangements, when combined with other tools, to be helpful in recruiting, developing and keeping top talent.

An active career development program bolstered with proper financial incentives can help ensure your bank has the right leaders for the future.

Enticing Compensation Strategies In An Active M&A Market


compensation-1-8-18.pngA recent Deloitte study indicates community bank merger and acquisition activity has been on the rise in 2018, though not necessarily at levels predicted by most experts.

A key benefit of a merger or acquisition is the resulting increase in talent for the surviving bank. Conversely, one of the greatest risks to consolidation is the loss of key employees; particularly talented loan officers. To mitigate this risk, many community banks ensure that director and employee benefit offerings are at or above the market.

The plans offered by the acquiring bank should not be perceived as non-competitive by the acquired talent they wish to retain.

Executive and director benefit plans are also part of the cost of consolidation. The latest report by community bank advisory group Vining Sparks highlighted several “hidden” costs of a merger or acquisition, including executive salary continuation plans (SCPs), director retirement agreements, stock options and employment contracts.

Acquiring banks need to understand the change-in-control stipulations outlined in such benefit plan agreements. These may include stay bonuses designed to retain critical staff through the closing of the consolidation, severance pay arrangements and accelerated accrual and payout requirements for certain nonqualified plans.

While retaining local talent after an acquisition is crucial to the acquiring bank, it should also be a consideration for banks who do not want to be acquired. The 2016 Bank Director M&A Survey found that 85 percent of banks sold because of shareholder liquidity, CEO/management succession, or board succession issues. One year later, Bank Director asked banks why they think they might sell in the future, 67 percent noted the same succession issues. Although many banks recognize succession issues as a driver, nearly 20 percent more of the banks who actually sold noted this as the main motivator.

Though it may be a challenge to find young local talent to establish an effective succession plan, banks can attract and retain the future leaders of their institution. Traditional bank deferred compensation plans, such as SERPs or SCPs usually interest the older generation. More creative plans, such as short-term deferrals and synthetic equity, can attract the younger generations.

When properly designed, short-term deferral plans can interest a young potential executive while simultaneously providing the bank with a hook to retain their services. Typically, a bank would identify a handful of potential candidates for the succession group and offer them a bonus that is deferred for a few years, and then pay out in cash. The bank continues to do so in subsequent years, building an account balance of 3-4 years of bonuses. If the employee leaves, they forfeit the bonuses. This strategy provides the employee with more immediate cash incentive, rather than waiting until retirement like traditional plans. It also gives the bank a few years to vet candidates of the successor pool. 

Synthetic Equity, such as Phantom Stock and Stock Appreciation Rights plans, is another approach banks utilize to align the interests of the executive with the success of the bank. Often, younger executives are not shareholders, but these plans are designed to make them feel and act like it. Simply stated, fake shares are awarded to each executive in the plan. These fake shares perform exactly like actual bank stock, giving the executive a stake in the success of the bank, while not diluting any actual ownership or voting rights of current shareholders.

Looking beyond 2018, short-term deferral and synthetic equity plans will certainly be among the more prevalent compensation plan designs in community banks, as the market continues to trend toward performance-based programs that more readily accommodate regulatory guidance. Plans are likely to include claw-back provisions and more deferrals of incentive pay that allow banks to take back all or a portion of incentive earned by an executive if the bank suffered losses, or was subjected to undue risk, as a result of the executive’s actions.

Bank owned life insurance (BOLI) continues to serve as the primary strategy used by community banks for recovering the costs of executive and director compensation plans. Rising employee benefits costs and competitive market pressures continue to challenge banks to explore unique and innovative ways to maintain profitability and growth while not abandoning their fundamentals.

BOLI helps a bank achieve this in two ways: tax-deferred growth of cash value (recorded as annual non-interest income) and non-taxable insurance proceeds paid to the bank at the time of death of the insured officer or director. These features of BOLI create an earning asset for the bank in addition to providing an effective means of informally funding executive or director compensation plans.

Talent Strategy: Fueling the Future



A tight labor market could be big risk if your bank lacks the talent to fuel its future. How can bank boards and management teams manage this risk? In this video, Julia Johnson of Wipfli shares why your bank should conduct a human resources review and provides tips to help banks tackle the talent challenge.

  • Four HR Areas Bank Leaders Should Be Watching
  • How Boards Can Better Understand HR Portfolio Risk
  • The Impact of Today’s Economic Environment

A Long-Term Care Plan Can Attract Top Talent


retention-7-13-18.pngOne of the biggest threats to retirement assets is the out-of-pocket cost of long-term care (LTC). While 51 percent of people see LTC as a financial concern and 70 percent of Americans 65 or older will need LTC assistance at some point in their lives, only about 8 percent of people of buying age and income own LTC insurance (LTCI), according to recent surveys and government data. Why is there such a disconnect, what can employers do to help solve the problem, and how does LTCI provide one more way to attract and retain top talent?

LTC is a growing concern because of escalating costs and because people are living longer. As they age, people become more likely to need help with two or more of their routine daily activities, such as dressing, eating, bathing, walking, toileting or getting in and out of a chair or bed. The need is more likely to impact women than men due to their longer life spans. But it is important to note that LTC is not just for the elderly: 40 percent of those receiving LTC services are between the ages of 18 and 64, according to the Robert Wood Johnson Foundation.

Despite the need, most people do not purchase LTCI for a variety of reasons, including cost, belief they will not need LTC services, uncertainty about when to purchase a policy, and lack of complete information provided to them. People usually become more motivated to seek coverage after a family member needs a nursing home or other LTC assistance and they become aware of the high costs ( average of $91,000 in 2015, according to a 2017 study by Genworth). Or, employees become more motivated after they have a medical issue that creates a concern. However once a significant medical issue occurs, it may become more difficult or very expensive to obtain coverage. Employer-provided health and disability insurance policies do not cover LTC costs.

Employers can help significantly by doing some of the vetting of LTC carriers and products and making them available on a voluntary, employer-paid, or employer-subsidized basis. Studies by LIMRA, an industry research firm, show that 59 percent of employees prefer buying insurance at their workplace. An employer-sponsored program can be offered to all employees as well as their family members. Spousal and marital discounts may apply and the policies are generally 100 percent portable, meaning the employee can choose to take over premium payments and retain the LTCI upon separation from the employer.

If the employer pays for the coverage for 10 or more qualifying employees (possibly as a perk for key employees), the program may qualify for certain additional advantages, including simplified underwriting, which typically results in 90 to 95 percent approval, a standard health class for all approved applicants, a unisex rate structure and reduced premiums. Furthermore, the bank has the option of purchasing bank-owned life insurance (BOLI) to offset and recover any expenses it incurs in providing LTC benefits.

Current tax rules encourage the purchase of LTCI, with the largest tax benefits afforded to employer-provided policies. Generally, employer-paid premiums are deductible to the employer while being excluded from the employee’s taxable income. In addition, the employee is not taxed on LTC benefits received, up to certain limits.

As co-author of this article and someone with two parents who needed nursing home care, I (David Shoemaker) can attest to the value of LTCI and am grateful my parents purchased it while they were young. LTCI allowed for better care for them and kept their retirement assets mostly intact.

By offering LTCI, the bank can fill a need in its benefits portfolio, making it easier to attract and retain top talent.

Redefining the Meaning of a Customer Relationship


relationship-3-12-18.pngFor most people, brick and mortar branches have become remnants of prior generations of banking. In the digital age of mobile deposits and non-financial, non-regulated companies like PayPal there is little incentive to walk into a local branch—particularly for millennials. This presents an anomaly in the community banking model. Community banks are built upon relationships, so how can the banks survive in an era so acutely inclined towards, and defined by, technology seemingly designed to eliminate “traditional” relationships?

The solution is to redefine the term “traditional” relationship. While customers may not want to walk into a branch to deposit a check, they still want information and advice. Just because a millennial does not want to deposit a check in person does not mean that he or she will not need to sit with a representative for guidance when applying for their first home loan. Using customer segmentation and understanding where there are opportunities to build relationships provides an opportunity to overcome the imminent threat of technology.

If information and advice are the keys to building relationships, it becomes imperative that bank employees are fully trained and knowledgeable. It is crucial that community banks spend time hiring the right people for the right position and then train and promote from within. Employees must fully understand, represent and communicate a brand. That brand must be clearly defined by executive management and communicated down the chain of command. It is incumbent upon the leaders of the organization to first set an example and then ask their employees to follow suit. Some of the most successful community bank CEOs can recognize their customers by name when they walk into a branch. These are not the biggest clients of the bank, but they are probably the most loyal because of the quality of the relationship.

The focus needs to switch from products and transactions towards specific relationships with specific customer segments. Customer-centric banking strategies will improve the chances of survival for community banks. Those that are not able to adapt will be eclipsed by the recent revival of de novos or will be acquired by institutions that are embracing this customer-centric approach. A customer-centric approach is critical to drive value whether pursuing organic growth or M&A. For banks evaluating an acquisition, there are additional considerations that need to be addressed prior to entering into a transaction, in order to safeguard the customer relationships that the bank has built and ensure that the deal enhances the bank’s brand and business model, while also building value.

If you are one of the survivors and are engaged in an acquisition, what does all of this mean for you?

  1. FinPro Capital Advisors Inc. advocates having strict M&A principals and parameters when evaluating the metrics of a deal, which will vary from bank to bank. This concept extends to culture and branding as well. A good deal on paper does not necessarily translate to a successful resultant entity. If a transaction will dilute your franchise, disrupt your culture or business model, or in any way undermine the brand and customer base you have built, do not pursue it.
  2. Signing a definitive agreement is not the same thing as closing a transaction. Integration begins as soon as the ink dries on the contract. Planning should have occurred well in advance. Management needs to focus on employee, customer and investor reception of the deal, along with regulatory approvals and strategic planning. A poorly executed integration can provide an inauspicious start culturally and can increase merger costs substantially.
  3. Retain the best talent from each institution and take the time to ensure that the employees are in the right position. Roles are not set in stone and an acquisition provides the perfect opportunity to re-position the bank’s staffing structure. This includes implementing management succession and talent management plans for the new entity. Develop an organizational structure for the future, not just for today.
  4. Communicate effectively throughout the entire process. Be transparent and be honest. Bolster relationships and foster enthusiasm in the new entity from day one. Corporate culture is one of the most difficult attributes to quantify but it is palpable and can either energize every person in the company or rapidly become toxic and disruptive.

For all banks, the brand and culture that you build will directly impact your customer base and define the banking relationships you create. To build meaningful relationships with your customers, banks must first build meaningful relationships within the organization. In so doing, banks will be able to redefine their model by focusing on relationships instead of transactions, customers instead of products, and eliminate isolated divisions to create integrated organizations. The traditional banking model may be dead but banks with strong leadership and corporate culture will recognize the new paradigm and enact change to evolve accordingly.