As CEO of the North Carolina Bankers Association, Peter Gwaltney plays a role in fostering the next generation of banking talent in the state, be it spearheading a networking event for young bankers or promoting the association’s banking school. Recently, he led the association in fundraising for a professorship of banking at Appalachian State University.
Through both pledges and cash donations, the association raised $688,000 for the new position that the state has agreed to match, dollar for dollar, up to $1 million. The goal is to support a banking program that gives business students a solid foundation in banking basics and ultimately connects them with internships and jobs at North Carolina banks.
“It’s very important to develop the next generation of leaders. When we look at the leaders of most of our banks — not all but most— they’re older,” Gwaltney said.
Indeed, banking’s upper ranks are heavily populated by baby boomers nearing retirement age. Add to that the fact that younger generations, perhaps still spooked by the financial crisis, are hardly rushing into careers in banking, and it is easy to see why attracting and retaining talent is a top priority for Gwaltney and other industry executives.
The Appalachian State banking professorship will be the school’s second and will be named for Dr. Harry Davis, the current banking professor who has taught thousands of students over nearly 30 years. Many of those students found their way to banks of all sizes throughout North Carolina and the state bankers’ association wants to help keep that program going when Davis eventually retires, Gwaltney said.
The Pennsylvania Bankers Association is looking into similar partnerships. Though President and CEO Duncan Campbell said the organization hasn’t yet found a college or university partner, he is motivated partly by the North Carolina Bankers’ recent success story and by similar programs elsewhere.
Banking as a field of academic study isn’t a new concept, but it’s not widespread yet, either. State and national bankers associations frequently offer their own development programs aimed at bankers who already work in the industry and want to take their careers to the next level, but academia can play another role, its supporters say. A focus on banking in college, as opposed to business or finance more generally, gets some students thinking seriously about it as a career.
Ken Cyree, the head of the banking program at the University of Mississippi, said that, in most schools, banking classes are housed in the finance department. “Banking is an application of finance," he said. "But you don’t get the depth that you would get in a banking program.”
Jim Edrington, executive vice president of professional development at the American Bankers Association, said that banking programs are also an opportunity to help change the negative perception the industry may have among younger generations. He said he’s seen increased interest in these types of programs, from both bankers and regulators.
In addition to the development programs the ABA already offers, the association has also worked with colleges and universities that want to offer concentrations in banking. Recently, the association worked with Marquette University in Milwaukee to create a commercial banking program in the school’s finance department. That program is overseen by Kent Belasco, a former banker, and it kicked off this past spring.
In Delaware, a coalition of bankers and academics collaborated in creating a minor in trust management that’s now offered through the University of Delaware’s Lerner College of Business, said Sarah Long, CEO of the Delaware Bankers Association.
The program officially began this fall and Long said that there are currently 10 students enrolled in it. She said she expects enrollment to increase “substantially” over the next year.
Sam Houston State University in Texas offers both an undergraduate degree and an executive MBA in banking and financial institutions through the Smith-Hutson Endowed Chair of Banking. That chair was endowed by an anonymous donor, a former banker who wanted to give back to his industry, said James Bexley, who holds that chair and oversees the program.
The Arkansas Bankers Association also put up money, matched by the Walton Foundation, to endow a banking chair at the University of Arkansas. Commercial banking courses for undergraduates focus on issues like risk management and cash-flow analysis, said Tim Yeager, a professor there.
In some cases, these programs serve the dual function of preparing graduates for a banking career and keeping them close to home, particularly in rural communities that often suffer “brain drain.”
The University of Nebraska offers an undergraduate specialty in agricultural lending and finance, for example. Richard Baier, president and CEO of the Nebraska Bankers Association, said the association has supported that program for the past 12 years with the sole intention of developing Nebraska’s next generation of agricultural bankers.
Baier said that of the 90 or so students who have graduated from that program, more than 60% now work for a Nebraska bank in a rural community. Many others have gone on to work in other agricultural jobs, often at family farms or doing land appraisals.
Regulators have also taken an interest in helping banks attract young talent.
The Federal Deposit Insurance Corp., for example, has teamed up with the American Bankers Association to explore the idea of creating a national network or clearinghouse where community banks could post jobs or internship opportunities. The clearinghouse would also function as a resource for colleges and universities and their students.
“There’s a mutual interest there,” said FDIC Chairman Martin Gruenberg. “The colleges, and students, have an interest in placing their students in jobs, and banks have an interest in attracting talented young people with a demonstrated interest in ... banking.”
Though a lot of learning happens on the job in any industry, these programs give graduating students an understanding of the industry that students with degrees in finance or business may not have, said Yeager, the University of Arkansas professor.
Reinforcing that point, Bexley boasted of the time a banker told him that students he hires from Sam Houston “are ready to get going, and we don’t have to tell them what a bank is.”
“To me that’s very important, to prepare people for the industry,” Bexley said. “Our joke is, ‘A BBA’ — bachelor of business administration — ‘is great, but you’re gonna be mad as a devil if you can’t get a J-O-B.’ ”