Bank CEOs Most Pressing Issues: Hear From the Experts

Imagine stepping into the breach to moderate a CEO panel on the burning issues keeping bankers awake—intrigued yet? I had my hunches about their top concerns, but I wanted greater precision. So, we took action: the trade association polled its membership, while I tapped our content email list. Despite the challenge of coaxing responses, we crafted a single multiple-choice question, letting respondents pick their top three issues. The results? They’re revealed below—surprised?

Forget my lengthy take on the top four burning issues—Funding Strategies, Personnel Recruitment and Development, Customer Experience, and AI/Fintech Integration! Instead, I teamed up with industry insiders and experts to set the stage before turning the tables on attendees to have their roundtable takes.

Before I summarize our expert commentary on each hot topic, first meet our subject experts (SMEs):

Summary of SME Remarks

• Bank Funding Strategies and Demographic Shifts: Neil Stanley discussed evolving bank funding strategies, the impact of changing depositor demographics, and actionable approaches for attracting and retaining deposits in a competitive environment, with follow-up questions on engaging younger depositors.

• Evolving Funding Strategies: Neil explained that traditional distinctions between savers and investors have blurred, with more people viewing themselves as investors due to increased access to investment products and technology. He emphasized that banks now compete directly with U.S. Treasury products and money market accounts, and must adapt by offering more than just low interest rates to attract deposits.
• Challenges with Traditional Approaches: Neil highlighted that relying on static rate sheets, frequent CD specials, and ad hoc pricing is outdated. He recommended banks move towards hybrid deposit products, such as companion accounts, and implement a sequential sales process similar to commercial lending to better serve different customer segments: sleepers, the curious, and shoppers.
• Hybrid Deposit Products and Data Insights: Neil advised banks to introduce companion accounts, where new CD customers qualify for high-yield savings accounts, to attract both shoppers and curious customers. He also suggested leveraging data insights to identify single-service CD customers and broaden their relationships by offering additional products.
• Addressing Aging Depositor Base: In response a question about the increasing average age of depositors, Neil noted that this trend reflects broader societal aging and the wealth concentration among baby boomers. He recommended not neglecting older customers, but also suggested banks offer efficient, reward-based checking programs and digital wallet integration to appeal to younger generations who value convenience and efficiency over traditional community banking.

• Personnel Recruitment and Development in Community Banking: Amy Vieney from People's Security Bank and Trust addressed the challenges of talent recruitment and development in community banks, focusing on succession planning, generational differences, and the balance between hiring externally and developing internal talent, with the audience prompting a discussion on the pros and cons of each approach.

• Succession Planning and Leadership Development: Amy emphasized the critical need for intentional staff and leadership development, noting that many community banks face a talent gap as long-tenured employees near retirement and younger generations have different workplace expectations. She described her bank's implementation of structured leadership development programs, including partnerships with third parties to build a pipeline of future leaders.
• Generational Workforce Challenges: Amy discussed the conflicting dynamics between a shrinking baby boomer workforce and high turnover among Gen Z and Millennials. She highlighted the importance of adapting leadership and development strategies to meet the expectations of newer generations, who prioritize flexibility, technology, and career growth.
• Balancing Internal Development and External Hiring: Prompted by a question, Amy outlined the advantages of hiring externally, such as bringing in fresh perspectives and filling urgent skill gaps, but noted higher costs and potential cultural fit issues. She contrasted this with internal development, which fosters cultural continuity and long-term loyalty but requires significant resources and time to build effective programs.
• Strategic Importance of Development Programs: Amy stressed that leadership development and succession planning should be viewed as business strategies rather than HR initiatives. She argued that investing in people secures institutional culture, strengthens customer loyalty, and ensures long-term organizational stability, especially in the face of industry consolidation and technological change.

• Enhancing Customer Experience in Community Banks: Tara Brady from Provident Bank explored the complexities of delivering exceptional customer experiences in community banking, focusing on generational expectations, the impact of technology and fraud, and the importance of employee empowerment, with further discussion around relevant KPIs and strategies.

• Changing Customer Expectations: Tara described how customers now expect immediate, accurate, and consistent service, influenced by social media, AI, and the prevalence of fraud. She noted that younger generations are not necessarily attracted by traditional banking rewards or branch access, but instead seek financial education and security.
• Financial Education and Early Engagement: Tara shared findings from internal and market studies showing that younger customers often lack financial education and rely on parents for guidance. She emphasized the need for banks to engage with potential customers earlier, ideally before college, and to provide accessible educational resources for both students and parents.
• Fraud and Trust Issues: Tara highlighted the growing challenge of fraud, with customers frequently unsure about whom to trust. She stressed the importance of proactive fraud education and support, as well as clear communication about protections like FDIC insurance, to build trust with both younger and older customers.
• Employee Empowerment and Customer Support: Tara advocated for empowering employees with tools and training to address the needs of diverse customer segments, particularly younger customers who value being heard and supported. She recommended active listening, tailored guidance, and upfront fraud conversations as key strategies.
• Measuring Customer Experience: In response to an audience question, Tara recommended using customer effort score, customer lifetime loyalty, and wallet share as key performance indicators, rather than relying solely on Net Promoter Score (NPS), to more accurately assess and improve the customer experience.

• Fintech and Artificial Intelligence Integration in Banking: Shea Gabrielleschi from Hartman Executive Advisors, provided an overview of the current state and best practices for integrating fintech and AI in banking, addressing operational efficiencies, data strategy, security concerns, and the importance of proactive adoption, with questions from attendees on AI tools and data privacy.

• AI Adoption and Strategic Policy: Shea explained that AI is already present in banks, whether formally adopted or not, and advised against trying to ban or ignore it. Instead, banks should develop policies aligned with strategic goals and governance, and begin structured adoption to avoid security risks from unsanctioned use.
• Operational Efficiency and Early Use Cases: Shea noted that most banks are focusing initial AI investments on operational efficiency, such as automating back-office tasks, drafting documents, and searching internal files. Tools like Microsoft Copilot are being piloted to safely introduce large language models within secure environments.
• Data Strategy and Vendor Integration: Shea emphasized the importance of banks taking ownership of their data to enable effective integration with fintech and AI tools. He advised banks to negotiate for better data access in core platform contracts and to organize data for secure, efficient use by third-party vendors.
• Security and Privacy in AI Tools: In response to audience questions, Shea clarified that tools like Microsoft Copilot keep data within the bank's secure environment and do not use customer inputs to train global models. He contrasted this with public AI models and recommended using business-grade, secure AI solutions.
• Leadership and Ongoing Learning: Shea encouraged bank leaders to personally experiment with AI tools to build familiarity and to foster a collaborative approach to AI adoption. He stressed that no one is an expert yet, and that ongoing peer learning and adaptation are essential as the technology and regulatory landscape evolve.

Reader to-do's:

• Funding Strategy Product Enhancement: Evaluate and consider implementing a hybrid deposit product (companion account) to attract new money and broaden relationships with single-service CD customers.
• Leadership Development Program: Engage with outside providers to launch structured leadership development journeys for new leaders, aspiring leaders, and high potentials within the organization.
• Customer Education Initiatives: Develop and offer educational resources and webinars targeted at parents of students and students to address gaps in financial education and support early engagement with banking services.
• AI and Data Strategy: Review and update core platform contracts to ensure greater ownership and accessibility of bank data for effective integration with AI and fintech tools.

A big thank you to our SMEs and I hope you can benefit from the discussions our bank CEOs enjoyed while discussing their and our most pressing issues.

~ Jeff