Women-Owned Small Businesses Are Banks Addressing their Needs

Transcription:

 Betsy Vavrin (00:09):

Turn again to Elaine and have her talk a little bit more about the fireside chats.

Elaine Szeto (00:15):

Yeah, not a problem. So before I dive into your program, I think it's all about education and being aware how fast women own businesses really rising overall. If you look at the stats the last two decades, they have grown over by 114%. What does that mean? We're fast approaching 13 million women owned businesses. Now that consists of 42% within the small business ecosystem. That's incredible. And what that means is they employ more than 9.4 million employees, and that's close to 7% of the US employment population. And not to mention that translate to over 9.4 or eight. I'm losing my track here, trillion dollars in economic impact. And there's a subtle kind of need. When we first put together fireside chat for our co club members, we had over 140 RSVPs. And what we do is we don't really look at banking as a traditional banking. We provide the insights and tools and our commitments bringing the community together.

(01:37):

So if you're a client, you're immediately part of the member. So when I put together fireside chat with panel of women leaders, I couldn't believe 140 people showed up. There's an outcry that they want to know, well, are there gender biases? What are the special obstacles that they're going through? And they like to share in part wisdom to others. So the platform has become so big that I now coming together, putting together a program, a series, and for all the men in the room, you'll appreciate this. We really also love the fact that everybody's coming together, learn from each other and be able to connect and really exchange best practices. So before I came to Nashville, we just put together fashion finance for women leaders where we talk about, Hey, there are a lot of things that we want to talk about, but let's focus on the topics and feel safe to exchange ideas. So there's a lot of things that we're doing top of financial resiliency. Let's not wait until we're in trouble in general with our finances or businesses. Let's kind of figure the best practices out and figure out how do we extend, make capital access easier for women. So there's a lot we're working on, but thank you for bringing that up.

 Betsy Vavrin (03:11):

And Jennifer, when you were looking at some of the small business programs that BMO does as well as some of the programs that you're involved in in the community, how does a bank really make a determination that, geez, it's really time. We should have a program for women, and what should that be about? Why would that be different?

Jennifer Schlott-Rouzan (03:31):

Well, to be clear, I've probably on my third or fourth iteration of working on women's initiatives at the bank with different iterations over the course of time, different leaders. And I think finally now we have great traction and some great programming in place. I'm on the board of the Women's Business Development Center as well as I do some work in the commercial bank on women's initiatives. It's compelling, the stats that you shared. I have similar stats on the growth of businesses, the trajectory, but there's two things that I think about the most. One, access to capital is still not there. When you look at female entrepreneurs, their characteristics are equal to men except for in one area, and that's their ability to access capital. So there's a lot of work I know our bank is doing to make sure that whether we can provide the capital or provide them resources or help them navigate sources of capital, that's critical.

(04:26):

But also just even thinking about it internally, our female employees want us to be serving the community and validating the work that they're doing. We have a lot of women in this commercial women's effort that I've done. I saw a whole bunch of women doing work on the side of their desk. We are finally now pulling that together in a strategic way so that the work that we're doing is validated and is cohesive and they're getting the support they need. So the internal piece and the external piece to me is really important. There are some things that I'm doing, little things that you can do that can move the needle. If you're hosting an event, we're hosting an event. Who are we having show up is some of our grant winners, female business owners to showcase their businesses. We have a big beverage practice. We've had some female owned distilleries be the liquor of choice for events so that we can stand behind the businesses that we're supporting.

 Betsy Vavrin (05:28):

So some industry specific programs.

Jennifer Schlott-Rouzan (05:30):

It's the little things that really matter. You can do big programming and you can differentiate yourself, and those things are important, but there are little things you can be doing every day that make the difference and move the needle.

 Betsy Vavrin (05:40):

Great. Devon, we don't want to leave you out.

Devon Bray (05:43):

No, that's good. These are great. There's a great conversation. I was just thinking about and just thinking about our audience. We just did a survey for small business clients and would you believe it that in an episode where they were measuring burnout, stressed out all of these things, the women were the least likely to say that they were stressed out and burned out because they won't even tell that they are stressed and burned out. The men were saying it more than the women. And then there was even a more fantastic stat around, have you missed an anniversary, a birthday party or a loved? The women were like, Nope, no, we haven't. We do all that and we run our small business. And so when you just think about the resiliency of women, 16% of women are greater in our starting businesses, 16% greater starting businesses than men.

(06:38):

So they're at a quicker clip. So when you think about just the overall presence and what women are doing, they're thinking about the passion, the thing that they have on the side. Sometimes it's the side hustle. They've been working at corporate jobs, I don't know this one, and they might be doing something on the side and then they make that pivot. But how we as bankers impact that I think is a really big necessity. One of the things that programs that we did is our access commitment program that started back in 2021, and it basically is serving our minority communities within our communities, dedicating a resource where we look like talk and act like and fit in amongst the communities that we are serving. And we find that women need women to talk to our minorities, need somebody to talk to them to be able to say, again, the capital issue is such a big issue.

(07:29):

You don't just walk into a branch and say, Hey, guess what? I have some credit issues kind of wondering how I'm going to do my life plan for this next year. And do that with confidence. That's a really tough thing to do. You need somebody, and I think we go back to our conversation in that first room talking about establishing trust and doing those types of things. So you need programs that have intentionality. And that's where I think just watching that happen at our bank, at US Bank has been really powerful to say, Hey, we're going to commit to this and really make sure we're putting people well.

 Betsy Vavrin (08:01):

You make a really good point because how do you bring it from the ivory tower, as we say, down to the banker level? I mean, it's really wonderful to think that the bank is committed to and has initiatives to be doing these types of things, but how do we make sure that those frontline bankers know what that's all about? I think about what do business owners come in? They're usually coming in for funding. Maybe they have a deposit relationship on a personal side, but now they're looking for funding. Maybe they're starting their first small business and they really don't know how to do it. They don't even know what resources are available. How do we make those kinds of things available to the frontline so that when, especially for women coming in, the resources are there to tell them where to go. I always think the disconnect between what's happening when we think of these programs and what the different initiatives are that we're committed to from the institution to what really happens at the front line, how do each of those branches understand? How does even the 800 number understand, well, here's what resources are available. How have you experienced that with your institutions?

Elaine Szeto (09:20):

At Integra Bank, we also leverage latest technology heavily. So one of the things that we very proud of is development of Integra 360 consultation proprietary tools. So what we do is take the time to really pull the peer-to-peer analysis data for business owners, especially for women owned businesses. When was the last time that when sit down talk to them about financial performance? What are the key drivers? All these basics and maybe basics for us may not be basic for our clients in general. And we offer a complimentary valuation and look at different scenarios. When was the last time that we take a look at if you ask for additional credit and to grow your company by multiples, what would that look like? So all that takes a lot of time and education, and we just so happen to really leverage technology to give our clients and women business owner that visibility of data Incising never had before. So in order for us to ensure that all our employees are savvy enough to really provide that effective consultation, we make sure everyone's certified. And it's a lot of time commitment, but it's well worth it.

 Betsy Vavrin (10:47):

So they're all trained so you know that they have the knowledge, the information, and the ability to communicate that.

Elaine Szeto (10:55):

Correct. Yep.

 Betsy Vavrin (10:57):

Anything else, Jennifer? No,

Jennifer Schlott-Rouzan (10:59):

I would just say we just completed a survey. We surveyed men and women to try to find some of the gaps so we better understand the profile of our female clients. And what was interesting in the survey was that on all levels of business planning, women were behind men, whether it was succession planning, liquidity planning, their own personal wealth planning. There's a gap. And our job is to make sure we close that gap and we have the resources, we have the staffing to be able to do that.

 Betsy Vavrin (11:31):

That's a really good point.

Devon Bray (11:32):

And one of the things that we're really proud of is our business diversity lending program. That is something that Union Bank, union Bank recently completed on the West Coast is a merger acquisition of Union Bank. And one of the legacy programs was this business diversity lending program. But one of the first things that US Bank did was put that into action even before the conversion happened. And we're very proud to say we've given access to over 65 million in business diversity lending. This is a program that allows, it's an opt-in program that allows for us to lower some of those metrics, whether it's FICO, your com scores and things like that, giving access to your women and minority owned businesses. So I think, again, it's all the walks of life, Betsy, from whether it's your bankers that are meeting your clients on the front lines, what you're doing on the backend to help really merge the experience so that they're getting it within the communities, they're getting it in all aspects. You really feel like you're in supporting the journey of the small business owner.

Jennifer Schlott-Rouzan (12:34):

And Devon said something about being intentional. I think authentic is the other word I would use because I've had a lot of experience where you put up a marquee and I've seen other banks do it, here's our Women for business programming, and there was nothing. And so at BMO, we do have special purpose lending programs. We have grant programs. I know there's going to be a session later today where one of my colleagues will be talking about our Xero barriers to business for diverse programs. We have partnerships in FinTech, so they were talking about FinTech earlier. We actually are partners with 1871 in Chicago. We're actually behind some of the FinTech companies and helping them grow their business because selfishly, that will help us in the banking industry. So there are a lot of different partnerships too that I think if that we leverage, but we also need to be authentic about standing behind what we say we're doing and we're really actually doing it

 Betsy Vavrin (13:28):

Well. There seems to be sort of a grouping of things that businesses are doing, things are doing for small businesses, and I think in terms of the different events, I think of perhaps you've heard or maybe you're doing some of the pitch contests, and that seems to be very successful in terms of attracting women and funding women with funds that they need. What do you think of those types of things? I know they're doing the pitch contests, there's mentorship programs in some institutions, some kind of networking programs. I know there's various ingredients that seem to build into those, and of course they're all customized depending upon what the bank wants to do and what their own initiative looks like. Do any of those ring true to you? What seems to be the best for you in really being able to service the needs of the small business woman owner?

Jennifer Schlott-Rouzan (14:29):

I have one example, but if you want to go first. Oh yeah, go ahead.

 Betsy Vavrin (14:32):

We have a lot of talent here.

Elaine Szeto (14:33):

Love the word be authentic, right? Because to your point, it has to be very intentional. So we are looking at, we started foundation and we're allocating some of the funds with good intention to help the women population. So we're actually examining different programs and with partnership as well. I really appreciate this discussion because it really needs to be from the top as well. And we have a number of board members or female leaders, it went through a lot. They understand that when you start a business, it is very challenging. So to answer your question, we're very, very intentional and we're looking at how we are allocating our funding through our foundation and looking for key partners that sometimes it's about one life at a time and transform a business one at a time and be there because I think success breed success. So we are finalizing that allocation of funding. So I appreciate this conversation.

Jennifer Schlott-Rouzan (15:39):

Yeah, so what I was going to mention is a supplier diversity program we have for diverse potential diverse suppliers. I actually was asked to do a pitch training for the cohort. So we've had, I think we're on our third cohort, second or third cohort where we actually invite a group of minority suppliers to come in and get education and support in terms of how to pitch to BMO. But not only does that help them pitch to BMO, that would help them pitch to any large corporate organization. So here, it's a very easy way to show that you're authentically trying to support them in the journey that they're on to try and grow their business. And then if access to capital is available, great, but there's also, they're getting access to the people they need to help have their back and be advocates for what they need to do.

Devon Bray (16:30):

Betsy, I do have one more just to kind of round this out, because going back to the access advisor, we actually have a very powerful story out of Chicago where we had a women black owned business. She was a beauty supply owner and she had too many supplies. She had a large retail store where the shelves are filled and she could not move her inventory quick enough. So who do you turn to talk about how do I pivot on my business plan? And part of the role of our business access was really working with her and then connecting her with our women business development centers. And they had a pitch opportunity. So they worked with our small business specialists, they worked with their access advisor and they prepped her so she could pitch a pivot, which is how she could take her product from being filled on the shelves to going online for the first time.

(17:22):

That was a $6,000 win. That's a $6,000 win that changed the life of somebody who maybe would've not had the tools or the resources. So again, us thinking with how do we invest in our communities, how do we put people with purpose, right, where they need it most to be able to deliver? And the best part about those stories is that, okay, so we didn't maybe do the lending, but we get to start with that deposit and we start with that origination, and that is someone that we get to develop and grow for a really long, long time by investing them the right way.

 Betsy Vavrin (17:54):

Well, that's so interesting is you think about these small businesses that come in as really a mom and pop perhaps, or maybe it's just a woman herself. And I know there's an example of this that we southern Californians can relate to called Porto's Bakery, and they started out as a woman owned company actually. The woman had, and her family had come to the United States from Cuba, and in Cuba she had baked quite done a lot of baking and was known there for having birthday cakes for everybody. So she came to the United States. She didn't have any intention of starting her own business, but she was working for, I think maybe a factory or something, and she started to bring cakes in again for birthdays, and she became, well-known because what she was doing was so delicious that everybody enjoyed her and they kept really trying to get her to start her own business, which she eventually did.

(18:55):

She started a business that began in the small city of Glendale, California, and it became so well known. At first it was just a bakery, and then they expanded to more than just a bakery and they're doing sandwiches. The Cuban sandwich is so popular out in California, and now she has four or five locations. She has since passed away, but her family is handling that. But think of it, here was this woman with a bakery starting her business thinking, okay, I hope I'm going to find funding for this, and then how is the bank going to help me? Now she's in a position where, and her family is in a position where they truly, they've been known to speak at different conferences and people in the audience in California who know them and love them and will go miles and miles to get their baked goods because there's only four in Southern California.

(19:50):

They're saying, oh, open one near us, open, one near us open, one near us. So it's become so popular and think now they're so picky in what they're doing and they're so conservative in what they're doing. They actually build their own buildings. So think about what has happened with that bank relationship since it first started. It started as one woman going in and starting her bank relationship, and now they have succession planning. Obviously they have inventory, part of their business practices, they have part of their financing for new buildings. So it's just incredible when you think about how that started and I think about how that affects the bank. And when you think about what you're doing with your small business banking programs for women, what kind of things does that do? How does that help the institution? I mean, we know there's some CRA provisions that it's helping, but what else is it doing that you've seen really react positively for the institution, for your own employees, for example, and for your frontline?

Jennifer Schlott-Rouzan (21:04):

I can share one thought there and it sort of ties into how the business growth of a small single person company can manifest. So doing some research on entrepreneurs, female entrepreneurs, there's a portion of their interest in growing their wealth. There's also a portion of what they're interested in, which is doing good. And at BMO, we're about boldly growing the good in business and in life, and we have some great examples of stories where in particular, there's one that's featured, her name was LED Valez. She started the first Latina charter business company. Then from there, she started a company that helped new business enterprises with branding and growth to help startups. So she's paying it forward. Then she's a grant winner and she's creating cohorts to help with their business growth. So you help one person build their business, it manifests into something else and it brings more into the community. Women are interested in that, and that's where that economic empowerment is so compelling and the story behind what these women are doing that just I think creates that buzz internally and externally within the bank.

Devon Bray (22:16):

When I think on and off the field, behind the scenes as employees, women, we will oftentimes, we wait until we are really good. So we have to get to that 99.9999% where we're like, okay, now I got this. I'm ready for what's next. And oftentimes some of our male counterparts, they'll be more generous and they're thinking and say, I'm at 20%. I'm good. Let's go. And they all the way in the pool and already and swimming. And it's funny because if you think about it, just even in our own employees, I think what's really motivating and inspiring is when you do start to understand the differences and the nuances of what makes us all tick and that a woman may be quieter. So she may not ask for the support or the needs to help them get the access that they need. They need the different tools, the resources. They think they either have to do it all by themselves or they'll figure it out by themselves. And I think when it pairs back to what we're talking about behind the scenes with our own employees, that's where I think about bgs and ERGs called our employee resource groups where we're really investing in our women so they can help amplify their voices, think about career paths, watch success happen in many different forums, both on and off the field.

Elaine Szeto (23:31):

Great. Yeah, I think in general, you may agree with me, but throughout my 30 years in banking career, I also have recognized that women in general, it takes longer time to build that trust. I don't know if you all agree with that, but once you build that trust, they become so loyal. We get so many referrals from women leaders and clients. I don't know. I just love them.

 Betsy Vavrin (24:01):

It's a really good point. And it speaks back to what my company first started, which was retention and what we've read. And you're absolutely right. The statistics for women making referrals is so much larger than men. And so I think just for that piece of information and opportunity for banks, they should be taking a look at that.

Elaine Szeto (24:23):

Yeah, the cousins, the brothers, they all come along. Love them.

 Betsy Vavrin (24:28):

Exactly. Well, it's a great opportunity to expand. I wanted to give a few minutes to our audience if you had any questions. Since we have such an esteemed panel up here who's had so many successes with their women-owned business practices, is there anything anyone in the audience would like to ask about and get some internal Yes, please.

Audience Member 1 (24:50):

Hi, Jennifer. This is for you. What was the impetus to start formal group to work out the women's project? Where are you at now, the trajectory, the work you're doing? Can you define success, what that looks like?

Jennifer Schlott-Rouzan (25:06):

Yeah, and I'm going to provide a little backdrop. So as an enterprise, there's some women's initiatives that happen. We have BMO for women in the retail and business banking space. There are some really good programming among my colleagues are here in that space. I sit in the commercial bank, and what I found is that we had, especially given that we have sort of a distributed model where we have people regionally, the commercial bankers, whether they were aligning with somebody in the business bank or with our wealth team, or individually, they were doing things and it seemed very disjointed. It didn't seem like it created this cohesive strategy in understanding whether it was local or nationally. So what I decided to do to not be threatening in terms of what I was proposing, there was a lot of good work happening, is taking work that was already done, being done, things that were happening across our footprint and bringing it together in a way that everybody still owned what they needed to do, but created leadership engagement, funding, strategic alignment with our peers and partners, and then building a brand.

(26:12):

So the bank of choice for women and bringing that authenticity to what we were doing. Also, we wanted to make sure that we were allowing our young women as they grow in their career, to have opportunities. So if there's a speaking event or an engagement somewhere, they could be showcased and be part of that. So it was both an internal and external strategy to wrap it up in a way. And frankly, I have some history where I haven't been successful, where I had a female CEO who questioned every dollar I spent, which was not even close to the number of golf outings we had in a year, and I had no offense against golf outings, but I mean, they didn't understand. And I feel like now with all these other programs and the great work we're doing, our zero barriers to business and timing was right to get the commercial bank aligned with what the other parts of the bank were doing. Great. Hopefully that answers your question. That's nice.

 Betsy Vavrin (27:06):

Anybody else? I know we're running towards the end of time here. I see someone with a no. Okay. I was just wondering if you were prepping for a question. Well, I really appreciate your interest and I hope you've gotten out of this, some new ideas and maybe some reinforcements to the direction that you're taking on your own strategy. I want to thank you again for being here. I want to thank the American banker and Stephanie GaN in particular for all the support she showed for us. Thanks again. Thank you for attending.