Chris Ward, the inaugural head of U.S. small business banking at TD Bank, talks to American Banker reporter Allissa Kline about the biggest challenges facing small business clients today, and how TD and other banks should respond.
Ward also discusses current competition to serve small businesses, essential small business banking products and services, and TD's strategy to grow its small business banking segment in the U.S.
Transcription:
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.
Allissa Kline (00:09):
Hi there. My name is Allissa Kline. I'm a reporter for American Banker. I cover large and regional banks, and I'm here today with Chris Ward, who is head of US small business banking at td. Today we're going to talk about the state of small banking business. Thanks for being here, Chris.
Chris Ward (00:28):
Thank you, Allissa. Good to be here.
Allissa Kline (00:29):
So Chris, if you could start today talking a little bit about your new role and your background as a banker.
Chris Ward (00:36):
Sure. I've been in banking 35 years. Last 20 have been dedicated to small business and business banking. Two different tiers, but really closely associated. Been with TD now for just about 16 months. So I took on the new role as US Head of Small Business Banking two months ago. Before that, had been the regional president for our region running retail and commercial. So with this new mandate, we are refocusing on small business and becoming better going forward at how we deliver and take care of our small business clients and give them a stronger value proposition to meet all their financial needs.
Allissa Kline (01:14):
Before we jump into some more of the details on your new role, I wondered if you could talk about that decision to come to td. You mentioned it's been about 14 months you've been at some other banks. You started your career at BB va.
Chris Ward (01:31):
Yeah, I was with BBVA Compass for 17 years. Compass Bank was bought by BBVA about 2007, and there I led US small business banking for BBVA Compass. I had a role for several years as the global director for small medium business for BBVA, working out of Spain for a couple years, and then I moved on to Citizens Bank where I was the president of business banking. And then before joining td, I ran small business credit at Bank of America.
Allissa Kline (01:58):
Okay. So what was it about the opportunity to join TD almost a year and a half ago that was intriguing enough to you to leave your current role at that time at Bank of America?
Chris Ward (02:09):
Well, sure. I live in Charlotte, North Carolina, so being the regional president for the Mid-South region, which was Delaware to South Carolina, made a lot of sense logistically, and it allowed me to get back into sales. Had been running a couple of credit shops in the past several years, so getting back closer to the frontline, closer to the customer was something that really intrigued me and has been a lot of fun.
Allissa Kline (02:30):
Yeah. Okay. And then as you mentioned, you took on this new title in August and it's a newly created role. Is that right?
Chris Ward (02:39):
That's correct,
Allissa Kline (02:40):
Yes. Okay. So what's the thinking behind creating this role at TD now and at this time and not, I don't know, five years ago?
Chris Ward (02:50):
We want to have a more holistic approach of how we take care of our small business clients and grow our market share in small business. As you know, we're very good at SBA lending eight years in a row, the number one SB, A lender on the Eastern coast based on the number of SBA units. But we want to be known for more than that. Obviously, that's a very important category to be good in, but we want to be equally known for our small business checking accounts, our small business merchant services, and of course our small business card products.
Allissa Kline (03:19):
Yeah. What is your mandate as head of small business banking?
Chris Ward (03:25):
Well, we want to deepen our client relationships, number one. Number two, we want to create simplicity and speed of service, and then most importantly, we want to execute brilliantly. Small businesses have a lot on their shoulders. As a small business owner, you are wearing many hats. You're the CFO, you're the president, and you might be the chief salesperson at the same time. So how can we make it easier to bank with TD by providing financial solutions that are simple, easy, and quick, without friction for that small business owner to have a great banking relationship.
Allissa Kline (03:59):
Right. Let's talk about small businesses in general. In your opinion, what is the greatest challenge today that small businesses across the country are facing?
Chris Ward (04:12):
Well, it's the uncertainty of their current macroeconomic situation. If you look at the NFIB September survey that came out, we know uncertainty is up. We know optimism is down, sales were down. There's a lot of concerns out there, whether it's quality of the labor force and being able to fill open positions, cost inflation, tariffs are creating more pressure on small business owners to manage their expenses. So how can we give them the financial resources, whether that's a working capital line or whether that's a very strong small business digital experience so they can better manage during such an uncertain time.
Allissa Kline (04:53):
Yeah, okay. That makes sense. Thinking about banking and how banks can be supportive of that sector, speaking generally, how should banks be responding to that challenge for small businesses today? And then how is TD specifically responding to
Chris Ward (05:15):
That? Well, it comes down to advice, guidance, and information. So one of the things that we've done recently last year is launch our small business dashboard, which takes the small business owners and they can synchronize their accounting software into it, and it really is a cashflow management tool. So they can do scenarios, they could do planning, and it will show them what would happen to their cashflow based on whether they want to add two more people or whether they want to buy a new piece of equipment. It also gives them advice, so it will also give them actionable insights too. So if the software sees that their cashflow is starting to diminish, it'll give them ideas on how to address that, how to fix that.
Allissa Kline (05:59):
How's the adoption of that dashboard
Chris Ward (06:01):
Going so far? It's been adopted very quickly. It is a free service that we offer our checking account clients, and we just keep on reaching out proactively and try to make our clients aware of this great new tool that will help them with their cashflow management.
Allissa Kline (06:18):
That's one product that TD is using to respond to some of the challenges. I guess. In your opinion, what are other products and services that are essential to today's small businesses that banks can provide?
Chris Ward (06:34):
Well, I think I'm really excited about Apple Tap to pay, and we launched that about a year ago, and we're seeing a great adoption of that, and that's leveraging your iPhone in order to accept MasterCard and Visa. So most small businesses will be small retailers, small service enterprises. So how do you accept payments for the services that you provide or the goods that you sell? And of course, you can get a merchant service, but if you don't take a whole lot of transactions on a monthly basis, apple Tap to pay is easy and very inexpensive and very quick to sign up for. Yeah,
Allissa Kline (07:09):
Okay. So that's a must have if you're
Chris Ward (07:13):
Small business, I think absolutely must have. How do you accept payments in order to generate cashflow is so important for a small business
Allissa Kline (07:20):
Owner. Yeah, good. Where are banks, I guess, succeeding in delivery of products and services to small businesses? And I'll stop there and then we'll ask the opposite question in a minute, but where are banks getting it right when it comes to serving this clientele?
Chris Ward (07:41):
I think banks have done a tremendous job at their small business, online digital experience and their mobile experience. So many banks have taken what consumers have already adopted, whether it's online banking or mobile banking, and utilize the same infrastructure to their small business clients. Why? Because sole proprietors are a consumer and a small business at the same time, so only makes sense to make the experience that user interface very similar. Yeah, different capabilities, but really similar user
Allissa Kline (08:09):
Interface. That makes sense. Anything specific, whether it's at the TD level or broader, where we see that in action today?
Chris Ward (08:20):
Well, back to Apple Tap to pay utilizing the iPhone, it only takes five minutes to sign up for it, and then that small business owner can be accepting MasterCard and Visa, which once again helps them with their cashflow. So the more tools we can give them from digital and mobile that helps them manage their cashflow, collect their cashflow, the more success they're going to have as a small business owner. That
Allissa Kline (08:42):
Makes sense. The opposite question then, where are there gaps today in what banks can be providing in terms of products and services to small businesses?
Chris Ward (08:53):
Well, I think it goes back to the future, and what I mean by that is providing lending and credit needs and a digital experience. A lot of banks are still challenged by that. It's something that we've put a lot of time and effort into creating a digital lending experience. So anywhere from 10,250,000, we have a digital application that is connected into our operating center where we do our underwriting and it allows us to provide working capital equipment and smaller loans under two 50, whether that's conventional or SB, a, and a more seamless experience, because applying for credit is never an easy thing. So how can every bank reinvest in that? Banks have always supplied credit, but how can we make it easy and take the friction out of it? So it's not just a fast thing, but it's a simple thing to do because a small business owner asking for credit, that's a challenging thing for them. They're asking somebody, Hey, I need a loan, here's why. So how can make that experience better, more fun
Allissa Kline (09:56):
In terms of thinking about how banks might implement that and the investment, I guess that comes with all of that. Are there limitations depending on how big that particular bank is in terms of the resources to invest in getting rid of some of that friction to meet the needs of these small businesses?
Chris Ward (10:18):
You have to make a decision whether you're going to build your own system or whether you're going to outsource it and use a third party vendor. And there's options either way. Either way, you're going to have to have a capital investment, and it takes time to deploy technology on a large scale for a bank.
Allissa Kline (10:33):
So there's still a lot of banks that maybe need to figure out how to invest.
Chris Ward (10:39):
Yeah,
Allissa Kline (10:40):
Absolutely. In all of that. Okay. Let's see. Sort of switching topics, thinking about tariffs or geopolitical uncertainty or interest rates, some of these different points out there, I won't use pain points for all of them. Maybe they're not all pain points, but some of these different factors that are out there. How are you seeing that affect small businesses in their day-to-day operations? Are those things affecting small
Chris Ward (11:11):
Business? Absolutely. Did a couple of small business roundtables recently, and tariffs are on the top of their mind. Why? Because tariffs provide unfortunate opportunities to increase expenses. So inflation is one type of expense increase. Tariffs are another because that's just the tax that's being added on to the goods that are being brought into the us. It also creates uncertain supply chains. So if they had been getting their supply of goods from a country that now has a very high tariff, that costs have gone up and that disruption of the supply chain becomes more of a challenge for them, will they be able to get in the items that they traditionally have always gotten in on time? The holidays are coming up, A lot of small business are retailers. That would be a worry.
Allissa Kline (11:55):
Right, right. Is TD providing counsel? Is there opportunity there to kind of hold the hands of some of these small businesses who are really struggling with tariffs, for instance?
Chris Ward (12:10):
Well, we certainly have seen an increase in our working capital line or credit applications, which is a true indication that small businesses are struggling with that supply chain disruption and also the cost that tariffs do carry.
Allissa Kline (12:22):
And you've seen that increase since
Chris Ward (12:24):
Absolutely.
Allissa Kline (12:25):
The spring. Yeah,
Chris Ward (12:26):
Absolutely. But at the same time, interest rates just went down too. So we have two things going on. Interest rates coming down also will help increase loan demand.
Allissa Kline (12:33):
Right. Okay. TD operates largely on the eastern coast of the us, but I imagine there's opportunity to get out there and work with small businesses across the country. I guess, how are you connecting with small businesses in different markets that you serve and maybe want to serve in the future?
Chris Ward (13:01):
Well, we do stick to our 15 state footprint plus the District of Columbia, and that's our focus right now. Of course, TD has a huge footprint up in Canada that goes coast to coast, but in the US we are an eastern seaboard bank.
Allissa Kline (13:15):
Okay, so you're honed in on that market specifically? Absolutely. Yeah. Okay.
Chris Ward (13:21):
But we operate in some fantastic markets, whether it's Miami, Tampa, New York, Boston, Charlotte, we have a wonderful marketplace today.
Allissa Kline (13:30):
And because you're wanting to do more in small business banking at TD because the bank wants to do more in that segment, any specific outreach or how are you getting your name out there, getting the brand out there in terms of, Hey, we're an option two to help with your small business?
Chris Ward (13:51):
Sure. Well, of course we do a good deal of marketing, so whether that's digital, virtual or in-person marketing, that's one way that we deploy. Another way is we've been doing a lot more small business networking events. So we host small businesses. We ask them to come into our retail stores. We call 'em a retail store, and we will host a seminar on information. So one of the things we've been doing lately that's been getting a lot of positive feedback is fraud prevention training, so security awareness for everyone, and we do that for consumers. We also do that for small businesses, and we know this small businesses have seen a significant increase in fraud that's coming against them. It's a big expense for them. So we want to be proactive in providing advice, providing information and solutions, and that's one way of doing it.
Allissa Kline (14:40):
Maybe you said this, are you offering that just to small business clients or clients who could be small business clients? I'm sorry, businesses that could be small business clients?
Chris Ward (14:51):
So we do that for consumers and for small business owners. And it's not just for clients. We've had our small business customers bring in friends who are small business owners who don't bank with us yet, and it's a very educational, informative dialogue on how to better protect your business against the fraudsters, because the fraudsters, we know this, they're very well funded, they're very educated, and they're leveraging technology like the rest of us. Yeah. Okay.
Allissa Kline (15:18):
Okay. Let's talk a little bit about competition to serve these small businesses. Who are you out there running up against, and how does TD differentiate itself?
Chris Ward (15:29):
Well, here in the us, as you know, we have credit unions, fintechs, community banks, regional banks, super regional banks and national banks. We have everybody. So it keeps us on our toes. Competition is a good thing. It makes it where you always have to be evolving and improving your service delivery in your processes.
Allissa Kline (15:45):
Yeah. Okay. Any special secret sauce to getting a customer to come over to TD versus that FinTech over there or that credit union down the street?
Chris Ward (15:57):
Yeah, I think it comes down to one-on-one service. At the same time, being able to deploy technology so that all your channels, whether that's your physical channel with your retail storefront, or whether that's a contact center or whether that's your online banking and your mobile banking, you have to be able to deploy great service across all your channels. If you can't, then that absolutely could hurt your value proposition. Right.
Allissa Kline (16:23):
I guess, what is the role of branches in the small business strategy? I assume you can go into a TD branch, you keep using another phrase, but I'm trained to say branch
Chris Ward (16:35):
Retail store. Yeah.
Allissa Kline (16:36):
Yes. So I assume you can go in to one of the centers and get everything you need as a small business customer.
Chris Ward (16:43):
Absolutely. We still consider our store manager of the retail store, the retail branch as our key contact for our small business clients. We do have small business bankers, and we assign them to our small business clients, and we provide proactive outreach. But many small business owners view that branch manager, that store manager as their key contact for any type of solution. So whether that's problem resolution or talking about a new product or talking about a loan, we want our retail stores to be equipped and educated and then also get them to the right person when it becomes a little bit more complex. Yeah.
Allissa Kline (17:17):
So are your bankers in the branches all trained to handle small business clients?
Chris Ward (17:25):
Absolutely. Yeah. And in fact, they provide a lot of outreach. So a lot of the community outreach, the small business networking events is usually managed and facilitated by the store manager. So if we do that fraud prevention training, nine times out of 10, that's going to be the store manager who provides that.
Allissa Kline (17:39):
Oh, nice.
Chris Ward (17:40):
So that we really view them as part of our community development program.
Allissa Kline (17:44):
Okay. Let's see. Let's talk about TDS plans to grow small business. It's small business banking segment in the us. Do you have specific goals that you can talk about or target markets that you are looking at as you try to build this out?
Chris Ward (18:04):
Sure. Well, as I said earlier, we've been the number one SBA lender, eight years in a row on the eastern seaboard. So we hope to find out if it'll be nine years in a row. We're waiting for the government to reopen before we understand whether the SBA numbers are out there. So we'll keep our fingers crossed, but we want to continue to improve our loan delivery. So deploying things like e-signature, deploying information so the client can see where their loan is in the process, and providing a faster and experience and taking friction out of the lending process like I talked about earlier. We also, like I said earlier, just launched our Apple Tap to pay, which provides very quick, easy to sign up merchant services so you can accept a MasterCard and Visa. But we're also looking at how do we bundle our products and services together because we recognize a small business owner has their business, but they also have their consumer household. So do we have products today that based on your balances, you can avoid the service charges by having both your consumer checking account and your business checking account. And we look at those balances combined in order to avoid the service charge. So how do we continue to give the small business owner easy to use products that have a strong value proposition that are digital and mobile, but makes it affordable?
Allissa Kline (19:24):
Right. You did an interview, I think, with one of my colleagues over the summer after your new role was announced, and you said, we do very well in small business banking, but we could do better.
(19:38):
And
(19:38):
I wondered if you could just kind of elaborate on that in terms of where you want to take this segment.
Chris Ward (19:46):
Sure. We want to provide better leads to our entire Salesforce. So whether that's the retail store manager or small business bankers, or even our business banking relationship managers about what's going on with our customers, real-time information based on the customer behavior, so we can reach out in a proactive manner and offer advice and offer solutions at the same time. So how can we anticipate the next thing that small business owner will need so that we're in front of them and helping them grow their business, protect their business in a very proactive advice oriented manner? That's where I want us to get to. Yeah.
Allissa Kline (20:21):
If you're not already, you become an essential partner.
Chris Ward (20:24):
We want to be a financial partner. Absolutely. But to do that, you have to have information. You have to have advice, and you have to give that to your sales teams in a real time manner versus being reactive and waiting for the small business owner coming to you. Then it's too late because we know this small business owners have a lot of choices in banking today.
Allissa Kline (20:42):
Great. Well, great. Thank you so much, Chris, for having some time to chat with us today. Thank you for watching this session of Leaders. I.
