Community bank rethinks C-suite tech roles on cusp of merger

Over the past year, Provident Bank in Iselin, New Jersey, has been rethinking how it defines top tech leadership roles as it prepares to double in size in a pending merger.

The bank filled three high-level technology positions in the last six months. Although none of these positions are new, some of the roles have been expanded and redefined. For example, Ravi Vakacherla succeeded the retired chief information officer of the bank at the end of August — but his role became chief digital and innovation officer. Damiano Tulipani was appointed chief information security in September. Most recently, Scott Hurlbert joined Provident in January as digital channels director, which encompasses channels that may not traditionally be seen as digital, such as the customer contact center and debit card services.

Redefining certain roles was part of a vision by CEO Anthony Labozzetta to advance innovation at the bank, a unit of the $13.6 billion-asset Provident Financial Services. The new appointments largely predate the bank's announcement that it would acquire Lakeland Bancorp in Oak Ridge, New Jersey — which will roughly double the bank's asset size if the merger closes as planned in the second quarter. But they represent a task many community banks have to take on as they grow quickly through acquisition: articulating executive roles for the digital side of the business.

"Banks go through points in time where they have to step up their game on the technology side," said Mark Fitzgibbon, head of financial services group research at Piper Sandler. "One of the points where that occurs is in that $20 to $30 billion asset range where they step into a new league and need a higher level of capabilities to be competitive."

M&A

Deal for Lakeland Bank has an issue lurking beneath the surface

The same day Provident Financial Services announced it had agreed to buy Lakeland for $1.3 billion, the seller disclosed an ongoing fair-lending investigation by the Justice Department. Provident said it has "not heard anything" that would give it pause.

By John Reosti

September 27

Both Vakacherla and Hurlbert come from People's United Financial in Bridgeport, Connecticut, which was acquired by M&T Bank in Buffalo, New York, in 2022.

"I started at the bank when it was $9 billion in assets," said Vakacherla. "With organic growth and opportunistic acquisitions we grew to $65 billion. We wanted to hire people who had been through that journey and know what it means to successfully transform a bank."

Cybersecurity is one area that is ripe for heightened focus. The bank's needs will evolve after the merger with Lakeland closes, said Vakacherla.

"The interesting thing about being a bigger bank is you are also a bigger target," he said. Tulipani previously headed cybersecurity with Investors Bancorp in Short Hills, New Jersey, which was acquired by Citizens Financial Group in Providence, Rhode Island, in 2022.

Another is accommodating larger clients. Fitzgibbon said when investing in technology, banks in this asset range need to consider not only new products, but ways to simplify processes to make them less manual. They need to use data analytics to a greater degree to find what customers are interested in and get those products and services to the right targets. He also speculates that technology could be helpful in creating cross-sell opportunities for Provident's insurance and wealth management business lines.

"As you get larger and deal with larger customers — particularly on the commercial side, which is Provident's forte — you need to be more capable of moving quickly," he said.

Vakacherla said for now his priorities are combining two banks and developing an overall data strategy. As the bank grows in size, projects could include introducing more automation and scalability into its data strategy and relying less on manual interventions such as spreadsheets, as well as bolstering multibank capabilities as the approximately $25 billion combined entity may take on larger commercial customers.

"We can't spend $10 billion on technology so we have to be more prudent in investments," he added. "We can't build everything ourselves, but it's not needed. There are enough fintech partnerships that if you focus your skill set on integration you can do what's right for the bank."

He said one element that attracted him to Provident was that leadership gave equal weight to the customer experience and employee experience as they do to shareholders.

"We have definitely seen more of these roles emerge in smaller banks, as there is a recognition of the changing business of banking to an increasingly digital one," said Carey Ransom, managing director of the BankTech Ventures venture capital fund. "Smaller banks are also realizing that they need to adjust their organizations to look more like software or tech-enabled service companies as they move forward."