Its a Wonderful Life for ABA National Conference Attendees
On Feb. 19, 2012, community bankers gathered in Palm Desert, Calif. for the annual conference of the American Bankers Association (ABA). Overall, the mood of the attendees, about 850 in number, was upbeat and considerably more so than in recent years. Buoyed by growing signs of an improving economy and new market opportunities, bankers had an opportunity to exchange views on industry trends and hear presentations on the theme of "Open the Door to the Future."
Before getting down to business, the attendees were shown a few clips of the time-honored classic film, "It's a Wonderful Life," starring Jimmy Stewart as the prototypical community banker of small-town America. The film is about a man, George Bailey, who has the chance to see what would happen to his town if he wasn't there to support its economic development. Possessed of integrity, honor and commitment to his community, Bailey embodies the professional standards of the traditional community banker in mid-twentieth century America.
The lessons of the Frank Capra classic continue to ring true today. Today's community banks play a critical role in towns and cities across the country, so much so that their absence would be keenly felt. These often-misunderstood institutions, at least in contemporary media and political arenas, are the engines of economic development, fueling growth by providing investment capital to both businesses and individuals.
Something for Everyone
The attendees at the conference were a diverse group of bankers from 55 states, territories and foreign countries. The conference, officially entitled the "American Bankers Association's National Conference for Community Bankers," offered dozens of other lectures and discussion groups over the four-day event. Among the hot topics were:
- A Washington perspective from ABA leadership
- Exploiting chaos: 150 ways to spark innovation during times
- How social media, prepaid cards and mobile banking can work
- Building capital & revenue while deepening customer relationships in today's mortgage landscape
- Winning the uphill battle – Capital-raising alternatives for community banks
- Making the wallet mobile
- Commercial real estate loan stress testing for the
- Outsourcing the investment function and balance
- The community bank of the future: Transforming to succeed in a decade of change
- 15 days of historic flooding: What community bankers need to know
- Implementing enterprise risk in a community bank setting
Even with this wide range of issues, a few salient themes emerged:
- Managing Risk – With the financial crisis slowly subsiding, further attention needs to be paid to forward-looking risk management, measurement and containment policies. This involves a preventative approach to evaluating future risks, while at the same time limiting unacceptable positions that might create systemic problems. This concept ties in with enterprise-risk management and all the related safety, soundness and compliance risks facing banks in today's environment. Detecting and managing future risk requires a collaborative approach that goes beyond departmental lines of authority, and requires that organizational silos work closely together to measure the cumulative effect and implications of adverse events tied to concentrations in products, services, technologies and geographies. Without a holistic approach to evaluating future risk, the industry will remain vulnerable to extremes in market forces.
- Dodd-Frank – The regulatory environment continues to create challenges for the industry, and these will likely be magnified during this election year. Financial institutions must continue to prepare for new rules and regulation. Understanding how regulators in the field will manage the compliance and enforcement process is a challenging proposition. Of utmost importance to banks is learning how to decipher new and changing rules and regulations and then creating or modifying operational processes to promote sound bank-wide compliance systems. This represents a significant investment in people, processes and technology for the average community bank. Therefore, developing a compliance management plan that focuses on key compliance risks is your best way to manage your return on this investment.
- Technology– Advances in technology have made connecting with customers easier and less expensive than ever. Mobile banking, prepaid cards and social media are all growing in popularity and are worthy considerations for today's banks, regardless of the size of the institution. With all the new options available, it is critically important to understand your existing customers, as well as the new ones you hope to secure in the future. You must understand what your customers really demand, how expensive the technology is, whether it will integrate with existing platforms, whether or not information security is adequately safeguarded and if you have the right people in place to drive the roll-out – all while achieving a decent return on your investment.
Overall, the ABA conference left attendees with a sense of cautious optimism about the industry's future and with new perspectives on the vital role played by bankers in their respective communities. Only a week after the conference ended, the FDIC issued a press release that seemed to justify the positive outlook of this year's event. The Feb. 28, 2012 release noted that FDIC-insured financial institutions earned $26.3 billion in the fourth quarter of 2011, which is the highest level seen since 2006. This figure represents the tenth consecutive quarter that earnings have registered year-over-year increases.
The next annual conference will be held in Orlando, Florida beginning on Feb. 17, 2013.
For more information, please contact your financial services representative or Dan Shumovich principal, Risk Advisory Services, McGladrey & Pullen, LLP, at 213.330.4668.