Banking Industry Sees Focus on Community, Tech, Women Execs

Pictured above: Sandy Straessle, Lorrie Trogden and Kim Whedbee

Banking has enjoyed quite an evolution over the millennia. From barterers, money changers and Knights Templar to marble floors, smartphone apps and, for you Harry Potter nerds, security dragons.

While no one foresees the massive stone columns and marble floors of old making a comeback, much less the giant steel vault doors behind which sat bundles of cash, the immediate post-COVID era has hastened a return to banking in person, and at least in states like Arkansas, a return to true community banking.

Overall bank branch usage in the United States has grown to just below pre-pandemic levels seen from 2017 to 2019, according to a 2023 study and survey from J.D. Power, and that growth is expected to continue. Plus, 72 percent of respondents indicated their expected use of bank branches would not decrease over the coming year, while 38 percent described branches as essential. Somewhat surprisingly, more customers under 40 said they were more likely to visit bank branches more often (21 percent) than less often (12 percent.)

Arkansas shares another national banking trend. More than ever before, bank leadership roles are open to women. Not only are there more women than ever working in banking, but most financial-service industry employees are women, per banking nonprofit BAI.

In addition the number of female executives who occupy the industry’s C-suite is on the rise.

Women made up 21.1 percent of C-suite level jobs in the banking industry in North America in 2021, per research from Deloitt Insights, and the data projects that number to grow by more than 6 percent to 28.3 percent by 2030.

Indeed, the vault door to one of the more historically male-dominated industries has been opened to women. Writing for BAI, national banking executives Jill Holman (DeepTarget) and Dede Wakefield (Alogent), espoused the benefits of diversity.

“By having a diversified team, these institutions can better reach and engage with each and every customer — increasing the ability to cross-sell products, boosting customer loyalty, as well as growing customer acquisition and retention,” they wrote. “Good leadership is the ability to influence teams and achieve goals, which makes understanding the qualities of a good leader mission critical to a company’s overall success.”

Leadership qualities, of course, are not unique to a specific gender, and the banking industry in Arkansas has reflected this trend.

Arkansas Money & Politics caught up with three Arkansas banking executives to gain their perspective on these trends — from remote versus branch banking, more women in leadership roles, volatile rates, the state of the industry in Arkansas and more.

Sandy Straessle was promoted this summer to chief retail banking officer at Stone Bank; Lorrie Trogden took over as the president of the Arkansas Bankers Association in 2018, and is the first woman ever to hold the post; and industry veteran Kim Whedbee is mortgage president at Signature Bank of Arkansas.

AMP: Has it truly gotten easier for women to enter the industry and then climb the ranks?

Whedbee: Definitely. I have been a banker for 28 years and have worked with many successful women. In my early years, it wasn’t common to see a woman in an executive role at a bank. Today, that has changed. Many Arkansas banks are led by women, and the number of women entering banking continues to increase. I believe this trend will continue as more senior bankers promote the industry by mentoring younger women when given the chance.

Trogden: I believe the barriers have been broken and women are being actively encouraged to enter the banking industry. Hiring is hard for many industries in our state, and bankers are always seeking top talent.

I travel around the state for bank visits and meet with a variety of people in the bank as well as bank boards. During a recent trip, I had the pleasure of meeting with a group of female managers and rising female talent in the bank. I’ve seen many such programs where banks are proactively supporting and empowering women to enter leadership positions.

Straessle: I believe it is getting easier for women to enter the financial industry. We are often still pigeonholed to the “traditional” roles held by women, and many banks still lack a female presence in executive level and decision-making positions. I am proud to work for a financial institution where the chief executive officer, chief credit officer, chief legal officer, chief operations officer and chief retail banking officer are female. These positions are traditionally held by men. I would also note that the position of state bank commissioner is also in the hands of a very capable woman, Susannah Marshall.

AMP: Describe the state of the industry in Arkansas right now.

Straessle: The banking landscape in Arkansas has changed dramatically during my career. Through mergers and acquisitions, the number of banks in the state has been cut almost in half, while the number of bank locations has exploded. We now have several banks with assets in excess of $1 billion. The technology available to us through fintech companies, and now generative AI, is mind-boggling. Customers expect to have access to all of our bank’s services 24/7. We’re fortunate to have a very strong and efficient state bank department, which does a fair and thorough job of examining and monitoring all of the state-chartered banks.

Whedbee: Banking is strong in Arkansas, and community banking is key for our state. There is so much business opportunity in the state for all consumers, whether a personal or business relationship. Consumers want to bank in their communities. That has been our focus at Signature Bank. We are an Arkansas bank, proud to serve the communities where we live and work.

Trogden: Banking in Arkansas is sound. It is safe. It is strong. Liquidity is good, and our banks are well capitalized. Our banks continue to contribute to the vibrant Arkansas economy. Arkansas banks employ more than 80,000 people and spend over $8 billion in total annual compensation and benefits. Last year, our banks provided a little under 132,000 hours of volunteer work in their communities and made over $47 million in community donations.

AMP: Technology has made remote banking so easy, but did the quarantine of the pandemic drive some customers back to a preference for banking in person? Is there a balancing act between technology and in-person contact?

Trogden: Self-service continues to be heavily utilized, but I’m hearing from our members that customers are returning to in-branch visits. Banks provide value that is above and beyond monetary transactions. Customers find it useful to go into the bank and talk to their banker about what their goals are for the future. Whether that is buying a house, retirement, etc., bankers can help put together a financial plan for those goals. Involving your banker early on may help ease and speed up the process of what you are trying to achieve.

I think lobbies being closed during the pandemic reminded both banks and customers how much they enjoy in-person visits and the comfort they get from visiting the bank branch rather than only using an app. Both of those things are here to stay, but I think there will always be a place in the mix for in-branch visits.

One example of that is the use of banks’ community rooms. Many are heavily utilized by the community for meetings and activities. I remember a banker telling me that a group of customers who held a weekly bridge card game in their community room were anxiously awaiting its reopening after the pandemic.

But there is need for both tech use and in-person contact at the bank, and both are important to our personal banking experience. There are certain transactions that are simple to do online or via the bank’s app, but many would prefer to have a detailed discussion about more complicated items in person. I had someone under 30 years old tell me that they do all their banking online. However, when they are ready to get a home loan or some other type of milestone transaction, they want to go into the bank and talk with someone about it.

Whedbee: There will always be customers who prefer banking in the branch physically. That number is diminishing. The norm for today’s culture is to bank online, pay bills online, shop online and communicate online. Everything seems to revolve around the smart phone, unless someone encounters a situation that drives them to the bank for a quick resolution.

Before the pandemic, I met at least 70 percent of the loan applicants I served. I had the opportunity to sit down and have a conversation with them about the process to educate the borrower about all facets of home ownership. There were valuable conversations had sitting face to face, reading the facial expressions of your customer and making sure they knew what they were walking into, that they were confident, satisfied and happy throughout the process.

The ability to serve customers remotely is great, especially when we’re able to provide them a convenient process, but we’re losing some of that opportunity to give consumers that well-rounded look at their financial standing.

Consumers should have confidence in their bank, whether they’re choosing to interact in person or online. Even if the consumer does not want to or plan to come into the bank at all, it’s wise to choose a local bank that can accommodate their tech needs and still be there for them when they need to get in touch with an actual banker. There is value in knowing a banker down the street that you can get in touch with instead of sitting in a call queue in another state or even another country.

Straessle: I don’t believe that branch banks will be going away anytime soon, but they will certainly have to adapt the way they interact with customers. As we’ve built and renovated branches at Stone Bank, we’ve included new conveniences such as a “concierge desk” in place of a teller line, a customer lounge with a coffee bar, TVs and comfortable seating, private rooms for loan closings or consultations and interactive teller machines (ITMs), which allow the customer to have access to a live teller without coming into the bank.

Our branch banks are still extremely important to Stone Bank because they are mostly in rural communities where face-to-face interaction with “my banker” is still expected. At our locations in Harrison, Mountain View and White Hall, we’ve built pavilions on our property where we host everything from Veterans Day events to pep rallies and trunk-or-treats. Some of our branches also function as a community center by hosting bloodmobile and mobile mammogram events. During the pandemic, we adopted the mantra of “High-Tech Solutions for Low Touch Times.” Our ability to deliver services online was vital, but so was our ability to provide banking service at our drive-up windows and through our ITMs.

Very early on during the pandemic, we limited our branch access to drive-thru windows and ITMs, but we also felt a need to maintain a personal connection to our customers. So we called them. Every Stone Bank customer received at least one phone call from their banker just to say, “How are you? Is there anything we can do to help?” It was remarkable how many of our customers sincerely appreciated the calls. In many cases, our people were told that our offer of assistance was the only such call they’d received. During the lockdown period, people appreciated that there was someone “out there” who was thinking about them. We’ve seen that that simple gesture has resulted in increased customer loyalty.

With the diversity of our customer base and the wide range of products we offer, there’s no “one size fits all.” We believe that our growth and success is largely attributable to our ability to offer personal service where many of our competitors, who are large regional or national banks, cannot. As technology-acceptance rates increase and the average age of our customers decreases, we recognize that we will have to adapt. So far, we’ve been able to nimbly balance the services we provide with the specific customer’s expectations.

AMP: Could rising rates spark more innovation in the industry?

Trogden: Banks are facing shrinking deposits which shifts focus on deposit retention and acquisition. This issue and increasing interest rates cause bank margins to shrink, which tends to reduce funds available for innovation. A stable interest rate environment offers stable income and can provide a stable allocation of capital dedicated to innovation.

There will probably still be some innovation, but the cost of new implementations, and lengthy implementation timeframes may slow execution.

Whedbee: I believe they already have; I’m seeing it in the mortgage industry already. Banks have become innovative with products that attract consumers in this volatile rate environment. That could mean an adjustable-rate product with a lower introductory rate or a buydown that offers tiered pricing. There are some creative portfolio products out there that have made banks even more competitive than they already were.

Straessle: Interest rates are cyclical. Innovation in financial technology is going to plunge ahead to accommodate whatever the conditions demand.

AMP: Just how important is “talent” to the banking industry, and what does such talent entail?

Straessle: Recruiting, training and retaining talent is a constant. As we’ve grown Stone Bank during my tenure from around 20 employees to closer to 150 (and still growing), we’ve become very good at recognizing talent and potential. Innate talent is important, but we also have to assess a candidate’s skillset, mindset, work ethic, flexibility, creativity and ability to work with others. Equally important is giving the employee the proper tools, along with a nurturing environment of coaching and rewards.

Whedbee: Talent is extremely important. A talented banker is someone who represents her bank well in the community, knows her products/services inside and out, and can confidently present and sell the best product for her consumer, all while maintaining a strong knowledge of regulatory changes and compliance standards to protect the institution she works for.

Trogden: Like any organization, banks need top talent to meet customers’ needs and keep the industry moving forward. A common misconception is that bankers are either tellers or make loans. Banks have the same needs as any other business. They need talent in marketing, accounting, cyber security, technology, etc., just like everyone else. Arkansas has a very low unemployment rate, and recruiting talent is a big focus.

Working in a role that you are passionate about, coupled with everything banks do to serve their communities, can make for a very rewarding career.

AMP: See any new trends on the horizon?

Whedbee: Like many other industries, AI is abuzz in the mortgage realm of banking. That comes with its own set of pros and cons. For us on the bank side, it has the potential to streamline document processing and automating some manual tasks. On the consumer side, however, it could mislead consumers toward products or loan amounts a human lender would never advise them to take, especially first-time buyers.

Straessle: With the diversity of our customer base and the wide range of products we offer, there’s no “one size fits all.” We believe that our growth and success is largely attributable to our ability to offer personal service where many of our competitors, who are large regional or national banks, cannot. As technology-acceptance rates increase and the average age of our customers decreases, we recognize that we will have to adapt. So far, we’ve been able to nimbly balance the services we provide with the specific customer’s expectations.

Trogden: To name a few: 1) Data, data, data. New ways to utilize data will drive new product and service offerings, assist with capturing new deposits and aid internal portfolio and risk management. 2) There will be a continued focus on capital and liquidity for banks and regulators. 3) API is everywhere, but banks and regulators are working on the best way to utilize it without compromising customer privacy or security.