By Chris Furlow
The hit television series Downton Abbey fictionally chronicles the life of the aristocratic Crawley family in the early years of 20th century England, as great technological change transforms the social, cultural and financial norms to which the ruling classes had become accustomed.In one episode, the Crawley patriarch, Lord Grantham, speaks with his wife’s mother about the changing world in which they live. The tuxedo-clad earl expresses with great discomfort that he feels like “a creature in the wild whose natural habitat is gradually being destroyed.” His American mother-in-law bluntly replies: “Some animals adapt to new surroundings. It seems a better choice than extinction.”
While Downton Abbey was fictional, the change depicted in the drama is a historical reality. Just as technology forced change in the early 1900s, technological change at a pace unimaginable even one decade ago, is affecting the way that we live and work today. All industries—particularly banking—must soberly and urgently evaluate the way they will adapt.
Asymmetric threats to traditional banking are coming from non-banks as well as unregulated or under-regulated actors, including payday lenders, credit unions and big tech firms. Meanwhile demographic shifts are greatly affecting customer expectations and service delivery preferences as millennials assume market prominence and Gen Z matures. The next three to five years will be pivotal for our industry and we cannot afford to be reactive in the pursuit of opportunity or in the management of 21st century risk.
The Texas Bankers Association has chosen to meet these challenges through the establishment of a future of banking task force. Its objectives are to ensure that our association is leaning forward to identify and evaluate factors that are certain to impact community banking. Key questions the task force is working to address include:
- How do community banks best approach fintech-related partnership and competitiveness issues?
- What do our community banks need from their relationships with core providers?
- How will evolving technologies affect bank services, operations and customer service?
- What external players will try to impact our industry and how should we proactively respond from a government relations and regulatory perspective?
- How do we best equip and prepare next generation bankers through training, professional development and recognition programs?
- What best practices, resources and services exist or should exist for community banks to thrive?
The task force represents a range of roles within banking from CEOs, operations officers and technology experts to customer experience executives, marketing directors, lawyers and government relations professionals. Emerging bank leaders—the future of our industry—are key members of this team as well. This diverse group of men and women help to ensure that we evaluate both challenges and their potential solutions in a comprehensive way, particularly for our community banks that often have limited resources.
The task force is holding meetings to listen to experts with different perspectives; to evaluate this information on behalf of their peers; and to make relevant and actionable recommendations to their fellow community bankers. Because change is constant, the task force will be a permanent fixture for TBA.
Through trusted relationships and personal service, banks have a long history of being at the heart of innovation and the economic success of American families, small businesses and enterprises of every size. The prospects for community banking in the United States continue to be very bright. But in such as fast-paced environment, we must be proactive in shaping our future—or others will shape it for us.
Chris Furlow is president and CEO of the Texas Bankers Association.
