Chair’s View: The innovation imperative

By Kenneth Kelly

Not long after I first arrived at First Independence Bank, I noticed a rather unique instrument sitting on a colleague’s desk at our headquarters. When I asked what it was, my staff explained to me that it was a typewriter — and that we were still using it for things like paper forms and cashier’s checks. Mind you, this was the year 2017.

I told them in no uncertain terms: “You have 28 business days to get it out of here.”

I share this story not as a criticism, but to illustrate how easy it can be to get stuck in legacy processes and ways of thinking. That’s why it’s essential that we build innovation into our cultures and encourage our teams to always be reevaluating what we do and how we do it.

I challenge you to start with one thing today: one outdated piece of technology, one legacy process, and see what you can do to make it better.

I tell my team at First Independence all the time: We have to think and act like a technology company. We’re in the business of moving money, whether it’s taking a deposit, lending or facilitating payments. We’re in the logistics of moving money. And in a competitive marketplace where consumers have many options for moving their money, we need innovation to attract and keep their business.

Look at it this way: If you have to move something across the country today, are you going to reach out to the company still using a horse and buggy? Or are you going to go with the company that can offer a fast, fuel-efficient form of transportation?

One of the things we did early in my tenure as CEO was to change our core system in order to better meet our customers where they are. But innovation doesn’t always have to be a multi-year, multimillion-dollar effort. Even making small process improvements, or introducing a new software product, can make teams more efficient in their day-to-day work and contribute to things like higher customer and employee satisfaction.

Today, many companies are turning to artificial intelligence to enhance their business. AI can offer many benefits, but it doesn’t come without its challenges: How do we maintain the human connection that customers have repeatedly told us that they want from their bank? And how do we mitigate the risks associated with a technology that is novel and largely unregulated?

These are questions banks across America are asking themselves each and every day.

They’re also questions we’re asking ourselves at ABA. Our mission is to be an innovative catalyst for the nation’s banks, wherever they are in their innovation journey. When it comes to technology — especially AI — there is no “one-size-fits-all” approach to adopting and integrating these tools. Rather, each bank must deal with the technology in a way that meets them and their needs where they are.

It’s a big challenge — but ABA is here to help you navigate it. In this issue of the ABA Banking Journal, you’ll find insights about how banks of all sizes are approaching innovation. You can also access ABA’s wide array of AI resources at aba.com/AI.

It can be hard to know where to start with innovation. But I challenge you to start with one thing today: one outdated piece of technology, one legacy process, and see what you can do to make it better. Incremental improvements lead to large-scale growth over time — and as I like to say, if you’re not growing, you’re dying.

Embracing innovation is how we ensure that our banking sector remains strong, competitive and very much alive.