“Technology knowledge starts at the top: You have to have upper-level management be tech savvy, as well as the front-line folks. There should be a minimum of technology everyone’s required to understand.”
As Executive Vice President, Steve Whitney believes that the role of senior management is to see the big picture and rally the team to get there. Developing a strategy to guide an organization into the future is going to take leadership buy-in and technology know-how.
Steve also finds the “what’s next?” in his own reading material: Although he enjoys sci-fi, he maintains an interest in what’s come before and how it shapes the future, with the occasional binge-reading of WWII books.
NEACH chatted with Steve recently to learn more about how technology and growth must be a priority in any strategic plan.
NEACH: What does it mean to you personally and professionally to serve on NEACH’s Board of Directors? What is your primary role?
I’ve been affiliated with NEACH for a long time in various capacities. I had been with the Fed in Boston; while there, I was the liaison with NEACH. When I left the Fed to work for the community bank I’m with now, I ultimately joined the Board.
Like a doctor, the Board aims to do no harm. The Board also supports the business doing what it needs to do on a day-to-day basis. We’re responsible to ensure NEACH is strategically positioned to ensure future success.
In 2017, we developed a strategic plan for NEACH. The plan tries to set a path for the organization to go into the future. It provides that road map most businesses find helpful when they are trying to get into new ventures and ensures they are heading in a long-term direction that’s beneficial for them and is consistent with the Board’s direction.
NEACH: As you see it, what are the biggest opportunities and challenges for financial institutions over the next three-to-five years?
I think the biggest opportunity is for banks to figure out the best way to use technology to meet customer needs. Also, for a bank to have a strategy in place—some idea of where they’re going and what kind of things they want to do. Even a small bank—like $1B in assets for my bank—needs a vision.
For example, most banks offer mobile banking technologies. Within that, you have a lot of decisions to make, like what kind of features to offer (for example, bill-pay services, Internet banking services, and the ability to deposit check with a picture by phone) how broadly they’re offered, and how you keep up with changes over the course of what you’re offering. How do you make sure you’re meeting your customers’ needs and that you’re consistent with or better than what competitors are offering?
NEACH: Where do you predict the industry will be in five years? How can financial institutions prepare in a rapidly accelerating financial services environment?
One of the biggest challenges is to find ways to grow: You have to grow if you want to properly compensate your folks and have state-of-the-art services. All that costs money.
Another challenge is non-bank players trying to get into the business. They can offer limited banking services and escape regulator scrutiny: The cost of ensuring compliance with regulators is very significant. Fintechs are switching to partner with banks, but then it adds a layer of cost to essentially offer the same products. These fintechs can offer services efficiently and effectively but also have reputational risk—whenever you hire a third party to be a touchpoint with the customer, you’re going on the assumption they’re going to do things the right way.
NEACH: Why is it important for an organization to have a payments strategy in place in this environment? What does this mean practically for financial institutions today?
If we don’t have direction in place and haven’t thought it through and nailed down where we want to go, then we run the risk of not being connected and confusing customers. It’s really necessary to make sure everyone understands what the long-term plan looks like.
For example, let’s say we decide we want to offer electronic services almost exclusively. We have to be careful we’re not opening new branches, as that’s not consistent with an all-electronic plan. It will impact the staff we hire, and we have to make sure our customer call center is adequately trained. If you don’t have a strategy, you end up moving in all sorts of different directions, and it can be confusing to employees as well as to customers.
NEACH: What business topics keep you up at night?
Cost. It’s always a concern. Also, to make sure people are being treated right. People are so important, especially in banking. You need good people representing the bank, the branch, the call center. Making sure you have the right people and then making sure you can keep them: In today’s economy, people feel confident about the idea of changing jobs.
NEACH: Why is it critical for C-level decision makers to be actively engaged with NEACH and the work that it does?
It’s typically the C-level individual in the bank who understands the big picture in banking. Even though we as a board oversee NEACH, which is specifically and directly involved in payments, it’s the C-level person who brings the bigger picture to the strategic planning and overall oversight of the organization. They are best suited to provide that kind of guidance to the company.
NEACH: In addition to serving on the Board, how do you participate?
My bank uses NEACH services and NPG offerings. We use NEACH specifically as a reference pretty frequently and consider them to be the industry expert. We also ensure multiple staff folks attend NEACH’s annual conference and various training sessions we offer.
NEACH: Complete this sentence: Without NEACH, I (or my organization) would be ___________________.
My organization would get this feeling like they’re alone in the world with payments. I feel like we can go to NEACH to get a good answer and get the assistance we need.
NEACH: What books are you currently reading?
I usually read science fiction or WWII books. I was on a real binge a few years ago: I think I read 30 WWII books!
NEACH: Who has been your biggest role model and why?
I would have to say that although I’m not into hero worship, I did have two or three bosses over the course of my career who were very, very good. I enjoyed working for them.