Highlights From The Maryland Bankers Association 2019 Annual Convention
On Tuesday, June 4, 2019, the Maryland Bankers Association (“MBA”) concluded this year’s Annual Convention in Amelia Island, Florida. Members of the association had an opportunity to learn, network and enjoy everything the MBA and Amelia Island have to offer. For those bankers unable to attend, here is a brief summary of highlights from the MBA’s 123rd Annual Convention.
Branches aren’t a thing of the past.
One focus of the convention was on the role of the traditional branch in the age of automated banking. At a time when branches are being consolidated throughout the country and some banks are turning away from the traditional branch model, it is natural to wonder whether branches will continue to suffer from automation, fintech developments, and changing customer preferences. In a presentation on the subject, Steven Reider of Bancography noted that there are many reasons why branches still matter, including that branches remain the dominant sales channel for customer and account transactions and serve as a social focal point for the communities served by banks. He also noted that millennials, for all their attention and adherence to the latest technologies such as mobile banking, have also expressed a great interest in old-fashioned things such as vinyl records and handmade bicycles as well as community-based spaces such as farm-to-table restaurants and craft breweries. Accordingly, the branch continues to offer significant value to community banks and, with re-imagined and novel design approaches, can continue to play an important role in the future.
The challenges of technology.
Members in attendance were also focused on the top technology challenges for community banks. Jack Vonder Heide of Technology Briefing Centers, Inc. noted in particular the challenges banks face with respect to:
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authenticating and securing the unprecedented amount of customer data collected by banks;
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responsibly maximizing the value of data collected (including through the use of artificial intelligence)
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selecting the right mix of product, service, and delivery channels; and
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understanding and responding to rapidly changing competition from fintech, big banks, and other disruptors.
Each challenge is daunting, but as Jack explained, practical frameworks and solutions exist to help engaged bank management use technology to its advantage. For example, rather than view fintech as a zero-sum game, banks can partner with non-depository neo-banks (e.g., Chime) and peer-to-peer payments companies (e.g., Venmo, Zelle) to offer expanded services to their customers. Doing so gives banks the opportunity to co-brand with automated personal financial services while simultaneously providing the bank with a wealth of customer data that can be used to anticipate the next shift in consumer preferences.
Other agenda highlights.
The remainder of the convention’s agenda illustrates many of the business, legal, and regulatory issues being confronted by Maryland banks. These topics included:
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the effect of fintech on core information technology systems;
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best practices for liquidity risk management in a time of decreasing core deposits;
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the continuing consolidation of community banking institutions and rise of fintech partnership opportunities;
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best practices for attracting, retaining, and developing the next generation of bank leaders; and
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the opportunities and risks involved in banking the cannabis industry under Maryland and federal law.
In addition, Dr. Lindsey Piegza of Stifel, Nicolaus & Company discussed the nationwide economic outlook and gave her opinion that, despite the Fed’s continued patience about interest rate movement in either direction, there is an elevated probability of interest rate cuts in the near-to-mid term to address potential weakness in the domestic economy.
Finally, the MBA passed the leadership baton from immediate past-chairman Kenneth Cook, Co-President and CEO Of Revere Bank, to the new chairman, Carissa Rodeheaver, President, CEO, and Chairman of First United Bank & Trust.
Troutman Sanders Financial Institutions team has worked with community banks for many years. Our long history of corporate, securities and regulatory work has been noted in publications such as The American Banker, Chambers, Best Lawyers in America, Thomson Financial, Legal Elite and Super Lawyers, which consistently recognize our firm’s financial services attorneys among the leaders in the industry. We look forward to tackling the issues discussed at the MBA convention and other pressing matters with community banks in the coming year. Please refer to https://www.troutman.com/services/industries/financial-institutions/index.html for more insights on issues impacting the banking industry.