NEW ORLEANS — Increased regulation and the need to control expenses are changing the nature of banking, but bankers cannot let those issues distract them from their primary job of serving their clients.
That was the message delivered by a group of bank chief executives at a panel discussion at the American Bankers Association's annual conference here Tuesday. Bankers are devoting more attention than ever to regulatory compliance and cost-cutting, but they need to be careful not to alienate customers in the process, said Melanie Dressel, the president and chief executive of Columbia Banking System (COLB) in Tacoma, Wash.
To that end, the $7.1 billion-asset company recently began instructing its front-line employees to explain to customers how new regulations are affecting them.
The company has acquired five failed banks in recent years and has a deal in the works to buy the $2.4 billion-asset West Coast Bancorp (WCB) in Lake Oswego, Ore., and Dressel had been hearing rumblings that customers were worried that Columbia was becoming too big.
But after talking to customers, she discovered that they were most upset with reams of new paperwork they were required to fill out - a function of new regulations, not the bank's size.
"We hadn't done a good job educating our employees about" how new rules would affect customer interactions, she said. "We wanted them to have the confidence to explain to customers why they were seeing the changes.... We're not whining about the consequences of regulation but we are educating customers about them."
For the past four years, Hancock Holding in Gulfport, Miss., has gauged client satisfaction by calling roughly 35,000 customers annually to ask how they feel about the $18.9 billion-asset company. That outreach effort has allowed the bank to better respond to customers' concerns, said John Hairston, its co-CEO, adding that Hancock is increasing the number of calls it makes each year.
Technology is also necessary to give customers more of what they want, said Harris Simmons, chairman, president and chief executive of Zions Bancorp (ZION) in Salt Lake City. For instance, the $56 billion-asset company is investing on a new application that will process loans and deposits in real time.
"At the end of the day we are an information business," Simmons said.
Still, bankers have to be wary about adopting any "technology in a box" that promises to boost the bottom line, added Frank Sorrentino, the chairman and CEO at ConnectOne Bancorp (CONB) in Englewood Cliffs, N.J. "Technology must be custom tailored to your owned institution," he said.
"I can lose more money chasing a bad technology than I would with a bad loan," added John Ikard, chief executive of the $13.2 billion-asset FirstBank Holding in Lakewood, Colo. Ikard moderated the panel.
Staffing remains an important tool for banks, in attracting new clients. Many banks have been trimming staff in response to declines in revenue, but their challenge is balancing that cost-cutting with the need to attract and retain customers. Columbia, for example, is investing in hiring younger workers because they can help the bank better understand what twenty-somethings want from their bank.
"We are forming a group that will be our proxy for young potential customers who can advise us on those things that move the needle," Dressel said. "We are engaging them and letting them know their opinions are valuable. It really helps me understand how we make money."
Simmons, though, questioned how well banks would be able to hang on to talented staffers, given how much time and energy is spent on compliance these days.
"I'm concerned about the cumulative impact of regulation and how it will impact our ability to attract people into our industry," Simmons said. "If we get too mired in regulation, I guarantee it will have a big impact on the quality of people we attract 20 years from now."
But Hancock's Hairston said that no matter how much the industry is changing, banks will always need quality employees to "help others make their lives better."
"Even if there are fewer charters, I think there will be just as many bankers out there as there are today."