Leaders in Lending
Leaders in Lending

Episode 73 · 4 months ago

Addressing Post-Pandemic Challenges Across Talent, Regulation and Customer Needs


Banking has seen some drastic shifts since the global pandemic- from the competition to attract and retain new talent, to meeting the needs of customers facing increasing inflation and uncertainty in this precarious economic climate.

From his view over multiple institutions and as a public policy expert, our guest today, Ramon Looby, CEO of the Maryland Bankers Association gives us a nuanced look at the issues facing the banking industry.

Join us as we discuss:

  • Looby’s perspective as an industry advocate across community, national and multinational banks
  • Attracting and retaining talent in banking in an altered job market
  • The perception of so called “junk fees” for banking services
  • Putting financial literacy on the public policy agenda

Want to learn more about how Upstart partners with banks? Check out this case study mentioned in the episode.

You're listening to leaders and lending from upstart, a podcast dedicated to helping consumer lenders grow their programs and improve their product offerings. Each week here, decision makers in the finance industry offer insights into the future of the lending industry, Best Practices around digital transformation. In more let's get into the show. Welcome to leaders and lending. I'm your host, Jeff Keltner. This week's episode features my conversation with Ramon Louvi, the president and CEO of the Maryland Bankers Association. Ramon has got a great perch looking over multiple banks in the Maryland region and so we've got to talk through a couple of things he's hearing from the membership, including, Um, their challenges and attracting, retaining developing talent and how the pandemic has changed the things they face on that front, some of the regulatory push against what he called junk fees. Well, not what he calls but I think what what are being described as junk fees and and kind of the important financial services actually actually being offered behind those and the challenges of meeting those consumer needs and kind of how we balance that with this desire to protect consumers from a feed point of view. Um, finally, a little bit of talk of the economic conditions, what's happening overall, what we might expect in the future. So it's really fascinating conversation. Uh, and I always enjoy getting to talk to people who represent multiple financial institutions and can kind of give us an overview of what they're seeing from multiple different institutions, and Ramos a great example that. So, without further ado, please enjoy this conversation with Ramon. Ramon, thanks for joining the PODCAST and making the time today. I really appreciate your being here. Thanks, Jeff, so much. I really appreciate the opportunity to share some thoughts with you. Yeah, I'm looking forward to this. So I ask all my guests this question upfront. UH, most people I've talked to the banking industry describe themselves as accidental bankers who did not grow up dreaming of being a banker one day. So I'm always curious that the paths that led people to where they're at in the industry. So would love to under stand, you know, kind of the path that got you to where you're out today. Well, we were talking just a little bit off off camera just about my background and I would tell you I was a part of a team of elementary kids, students or elementary school students, that won the Florida Stock Market Game. So I tend to think that ever since that time I've been running away from banking. UHI, all the way up until sixteen, when I joined Bank of America as a senior vice president and policy lead. Um, working with a great great folks there, but yeah, it's Um. Actually just had a chance to speak to about two hundred kids here in Maryland who would recently won, uh, the game, and I, you know, share with them what I think it meant to me and that it's important to have aspirations in the field of financial services. It's not just a bank teller, is not just a loan officer. There's so many things that you can do to have, I think, a remarkable impact on your unity the stock market game. Have you followed your port for your winning portfolio through the years? Is it still is it still doing well? Listen sometimes, you know, I guess I'm old enough now that I can faintly remember, but I think what happened was we went all in on a healthcare stock and I think it was a ten week period and I think the stock at recently I P o. This was back in the days now where there were not decimals but actually fractions, um. So we had to figure out fractions, you know, to pay, you know, to buy the stock, because I think it was like a one fifteen and three eight, something like that. Um, healthcare stocks. Is there some good stocks in there? You should have bought some apple that. You bought the apple and held on. That would have been a absolutely. What is? I think that the NBA is a credential that comes after the name of people at the business. Tell me about a little bit about the organization, what you guys are and what you do. Absolutely so is the Maryland Bankers Association. There a few NBAS out there, you know, Mortgage...

Bankers Association, uh, and then every other state that starts within them, Massachusetts, Maine, Mississippi, Missouri, uh, you know, etcetera. But here at the Maryland Bankers Association, where we're just celebrating our hundred twenty six anniversary, Um, we're about being a resource for banks. Um, we have, you know, we're a place where banks come together to talk about issues that are concerned in the industry. So we advocate on behalf of our members and they can be single community bank branches all the way up to national or multinational banks. So, you know, we talk about the issues to ensure that there's a fair playing field out there, to make sure it's a robust marketplace. We also invest heavily in the training and development of our bankers. Um and so we partner with the member institutions to offer a number of services and products that help our bankers have a broader U Um uh look at what's happening out in the in the marketplace, whether it be changing regulations, whether it be emerging trends. Um We we try to help our bankers theay on top of it. And then also, thirdly, we represent our bankers before legislative bodies, regulators and others to talk about issues that really benefit the industry as a whole. And what are the major issues you're hearing from? I love, I love I guests who have a perspective across multiple institutions. I feel like it's it's a really interesting perspective and perview to have. What are the number one, you know, the top couple of things that are on the minds of your member banks and institutions right now, because it feels like it feels like a really interesting time, both from an economic point of view, from a regulatory point of view, from a legislative point of view. What what are you hearing from them? Well, there are a lot of things happening right now. So if you think about some of the macro impacts post pandemic, you know, you think about what's impacting the business community as a whole, and that's talent, Um, ensuring that you have the people on hand to ensure that you can get the work done. Um. And you know, we think banking is a it's a very important job, it's a very special job, and so you know, we weren't immune to what happened Um, you know, post pandemic. So we're really looking, I think I to when I talked to my seat some of my CEO's talent. Is a big perspective, a big party Um and what they look at. Otherwise I would tell you there is there's a lot of attention on issues such as, I don't know if you've heard, uh this term out there junk fees, this idea that some of the fees or for the services that our banks provide are are somehow junk and I think there's a significant pushback against that idea, particularly giving, uh, you know, the trend in in the in the industry, where this is significantly less if you look back five years, ten years, fifteen years, as a person which of revenue for banking as a whole, and so I think you know, you would be hard pressed too to see that consumers find. If you know, I'm I'm buying groceries or formula here on Thursday, but I don't get my paycheck don here until Saturday. You know, is that a is that a fee in which to pay for a service? Then yeah, Um, but I think it's I think it's a little misguided to label all fees that you may not necessarily think are helpful jump interesting. So let's dive into those two topics a little bit. I mean I'd love to see what what are you hearing from your members? That's effective and this kind of retention acquisition of talent. I mean that's certainly a topic, uh, here in Silicon Valley where we operate, like question number one, two and three, because it's such a cutthroat industry. But I'm really curious what's what's effective for them. What you're hearing that's working well because it's a it's a tough challenge for every business. I think Um, and particularly is, I feel, financial services, is...

...undergoing a bit of a transition in terms of the level of work we want out of our employees, that kind of engagement we want with our customers, Um, and finding the people who are able and willing and excited to do that. It's not it's not easy. No, it's it's not easy. And I think you add to that. Um. You talked a little bit about you know what we're seeing. You know, I think the CPI reading today eight point six percent, highest in h since at one Um. There are folks who have been in the industry that long who who have not seen that. So add to that the pressure, the downward pressure on filling positions and then sort of Um, you know what you're seeing. Um is playing out for the first time. I would tell you. I think you know, bank leaders are really focusing on the the teammates experience, whether it be the own boarding, whether it be trying to find ways to promote or retain or a really fine ways to expose that talent to other areas. In the bank for Growth. I would tell you, you know, you take a look at what some of our banks are doing really setting, Um, the tone in in terms of how do you support your bankers? I think a lot of this was done during the pandemic. I mean you you can hear stories of banks paying, Um, you know, just flat out fees whatever you need uh to be in will. Will pay for your child care, will, you know, will make sure you're if you used to take a public transportation will pay for you to have a you know, uh, a uber or lift Um and and not defend any of the other silicon valley transportation firms, but, you know, Um, all of all of those things really demonstrated how important our banks and I think our members know that their employees are. Yeah, yeah, that's great. And let's talk about about the fees, because I feel like this is a tough area, Um, and I'm is what you got, what you're advocating for to policy level or where you see the most concerned, but because I feel like there's this line, this fine the fine distinction between, you know, really making credit or money available when it's needed and the way we do that and whether the fees are appropriate or not. You know, it's certainly versus payday lending. I think most banks is quite reasonable and as often the alternative. Um. So what are you seeing and are you seeing any innovation aspects? It feels to me like a place where, you know, short term credit at lower prices would be a good thing if we could make it happen without breaking the bank. I mean figuratively and literally, Um. But it's a hard problem to solve. Yeah, I think you know, I think the market is working to sort of, you know, deal with this. I think you've seen a number of larger institutions and not so large institutions do away with several fees, Um, and they're working with their customers directly and offering them products. I think, to your point, uh, credit at a cheaper price, Um, which is more which will help consumers, Um, you know, in times of unknown emergency. I think I think you might know the statistic out there. It's an eighty or nine of Americans Um, don't have enough cash on hand to cover a thousand dollar emergency. And you know that's that's a real um concern and you know, something that can cause anxiety. And so to know that you have a partner in your bank that says, Hey, if you're having this issue, here's here's something that we can we can offer. But, you know, to the other end, I think again, I haven't been around, uh since atio want so some of these things I don't know, but in talking to some of my bankers they go back to the time when, basically, if you know, if you say you were to label every fee of bank charges a junk fee and you get rid of, say, let's say, overdraft. Well, the education that I got was simply this. If you think about Um, you know, if you were, and not a lot of people do this now, but if you dry, you know, writing a check at the grocery store previous to sort...

...of overdraft regulation and that coming into effect, you know these these stores or institutions could put your check up and say you're gonna pay x amount of dollars on top of what you will us. Otherwise you can't shopper anymore, and I think that would be probably one of the unintended consequences of sort of this blanket idea. So you know, Rob Nichols, who who I know? Uh, who I think you know, president and CEO of the American bankers association recently penned op Ed in the American banker. That said, you know, more dialogue is necessary between the industry and CFPB, particularly on this point, and to really understand, you know, what's the goal of for the campaign. Yeah, it's uh, I feel like the law of unintended consequences is a story of so much public policy that's well intentioned and yet ultimately, you know, do you achieve what's out there? And sometimes I think we forget it's what's the alternative of the thing? We may not like, it maybe the thing we like. Even last uh, and finding that balances is not not easy in particularly in a space like this, where you talked about really trying to meet the needs of underserved consumers who have, you know, real need to access money and credit on some terms. Hey, Sarah Bouch here, thev up of consumer lending at first Federal Bank of Kansas City. A few years back, our executive team knew we needed to grow our unsecured personal loan portfolio, so we turned to up start. Three years later, I am proud to share that we've scaled our loan volume target from five thousand a month to twelve million a month and acquired over a thousand new customers. If you want to hear more about our partnership, check out the full case study on upstart dot com forward slash lenders. Once again, that's up start dot com, forward slash lenders. All right, let's get back to the show. Um. I wanted to ask you a slightly different thing now, which is Um, you know, so much changed during the pandemic. We had the closure of branches. You know, you're talking about changes in play. People recruited and retain talent, uh, the way consumers interacted with us right digitally, so often even people who weren't really digital bankers. What do you see in the in the shift of things that is happening that is more permanent versus more temporary? I mean, I think there's this real question like is this the new normal or was this a blip? And I think there's probably things that fall into both sides of that, of that line. Right, there's things that we're blip and are going to go away and things more permanent. What are the things that you see that are are more permanent in terms of changes the way we interact with consumers, operate as banks? Like what do you hear and that's like the real structural, permanent changes from that experience. Yeah, I'd start with just the premise and then I'd sort of work my way through some data, right to give you a sense of where I think this is. So I think just the premises this banks, no matter what is, what is going on in the marketplace, what's happening, are going to find ways to serve their consumers, their their customers. They're gonna find ways to serve their clients in their communities. You see that especially during the pandemic right Um. You know, I was talking to a group just the other day and I talked about long before we knew what masks were needed, before we knew what vaccines were, they were bankers working at their kitchen tables at two o'clock in the morning trying to get P P P loans uh in a time where, you know, no one was coming into the UH to the banks, and so that sort of demonstrates, you know, sort of the fourth thinking that banks have had to build these systems and platforms so that, you know, no one was in, you know, six months a year to an office, but we made sure that money got to on the rails uh and out to the to the people, to the companies and small businesses and families who needed it. So that's that's the premise I'll start with. But I'll take a look at, say, the a BA's most recent UH study on bank usage by Americans and consumers before the pandemic, back in twenty nineteen. I think it was something like one in six went...

...in in the last two weeks to inside a financial center, to uh, to conduct financial services. Well, as we've seen pandemic, a lot of trends were pulled forward and so we saw immediately. You know, some would say we're still in this pandemic Um you think about what has happened. So, pulling that forward, they found that now one in ten, so almost a decrease and those who were going in before. So I think I think you'll you'll find that banks are are seeing that and they're reacting to it. But it doesn't mean that there. You know, as I started at the beginning, banks will always find a way to serve their customers no matter what's happening in the marketplace. Yeah, there's another topic that I know is close to your heart and that you've recently put it up at about Um which is around financial literacy and education, to talk to me about, you know, not just what was in that piece, but how you think about that, because it feels like such a critical component of what we need as a as a society to move forward. You know how people interact with financial services. So what do you see that's working there? What's your perspective on what we can do to do a better job of educating the American consumer, on the public, about financial topics? Well, I'll tell you this, Um, I think there was recent news just today or just yesterday, that Michigan became either the seventeenth or ninating state to require that high school students receive financial education as a part of their graduation requirement. And so I think you're seeing momentum there. And so the OP ED which we're in in the Washington Post about two weeks ago to the day, are actually two months ago to the day. Um really talks about this and Um my co author, Julie Weaver, who is the executive director of the Maryland Council on Econo make education, which really funds and organizes a lot of initiatives, particularly the stock market, and why. That's why it's a full circle moment for me, Um, to talk about the importance of it right because we make the point in our Ed that everyone talks about financial literacy as if it's, you know, just a thing and that's out there, but has real consequence. It has bad credit as a real consequence. And you know, you think about an area like Maryland, where you have a lot of opportunities and government jobs, some of them require security clearances. If you don't have good credit or or or credit that's in the affirmative, you know that's a knock and and that can mean an opportunity for a job that costs you hundreds of thousands of dollars over time, plus the fact that you're now going to pay higher, higher interests to borrow money regardless of anything you do. So you know, we think, and we think that is a core principle, um, that getting more financial education into the hands of consumers helps them make better, better informed decisions about what their financial goals are. Um. You know, just talking recently to some regulators and I said, you know, sitting here in this room, I can ask us to define money and it's going to mean something different to each one of us. And so if you can just imagine what it means to different consumers and different points in their lives. There's no one, you know, one way to sort of get it out there. But you know, when you think about what what public education public schools offer, I think it's a way to help us ensure that the consumers that are coming to the marketplace are are prepared and have um the information they need to make good decisions. Yeah, and it's the other thing I think about is when you don't have this done through the school system or in some general way, than financial literacy, and it's always good credit. Um that that can come from understanding system end up becoming an heard is that the parents who are savvy enough to...

...educate their kids or get a credit card for them when they're young to start building a credit history and then that way we start actually creating a legacy where the good credit is inherited from generation to generation. Because of this, the way education is handled at the family level as opposed to being done more systemically, which is which is really not a particularly good thing for us to do as a society. Curious do we, I don't know the history. Do we used to do this? Why do you think this is something we have to advocate. For me, it just feels to me like you know versus many things. And I'm gonna say something, well, kind of personally, but that we learned in high school. Now I got to Calculus and man, I've been an engineered for many years and I haven't touched calculus. But, you know, understanding finance, certainly it has been much more impactful to my life, my ability to make smart decisions. Why is it controversial or a difficult topic that we say this is something we ought to be teaching every student who goes out into the world how to how to really understand the financial products I'll be encountering and take advantage of the system. So, first of all, you you plucked on a heart string of mind. I was worst into taking calculus Um and my senior year I thought I was gonna get like, you know, just a past, you know, to to do teacher aid or something, but my gallants council said, yeah, you need to take calculculus. Well, I haven't touched it either. So I think you know to your point, I don't know the rhyme or reason why. Um, you know, this is something that is now becoming a trend. I think the point we made, Julie Weaver and I made in the op Ed, is that, you know what, dissecting or frog may prove to be very helpful for biologists or future veterinarians, but you know, when you put a financial education in there as well, it's gonna be a positive for every consumer, every student who are who's preparing uh for adulthood and to come into the marketplace. Yeah, we don't have to go on Calcus, but my other but statistics. I feel like we should. You know, so much of what we're seeing in the world today as probability and what there is an old saying that I love said a man is a deterministic creature living in a probabilistic world, and I feel like I would, I would have much better had a good grounding and statistics probability, in the theory of that and finance than than Calculus. No offense to my calculus teacher in high school, who is Great Um, but that, you know, those are skills that I'd be like every every consumer needs and ought to have, um and I don't know why we don't do a better job as a society given them, given that to everybody, because it is is not only education for the consumer, but two, it's a fairness topic, right. It's a it's really a question of, like how do we make sure everybody is able to participate fully in that system and understand it and not be disadvantaged by lack of understanding? Let me just say this. It's not a question of if parents are like falling down on the job. It's just, I mean, how many things your parents have in front of them? Right? It's you know, I think part of what we looked at was that parents don't have the time. If you're, you know, talking about single parent or parents that are working two jobs and multiple kids, you know, where do you find the time for for yourself and some of that? So it's it's really Um, about a societal good of benefit. Right. We invest in so many things as as taxpayers, whether it be the interstate highway system, whether it be, you know, the local part. You know, I think you'd be hard pressed to find, Um, you know, a better investment and more deliberate uh, you know, good outcomes, uh, from students who now have this information and education. Absolutely well, before I ask You my my traditional closing three questions, I want to ask is there anything you wanted to talk about. It felt like we should have covered that. We didn't hit on today. Listen again, Jeff. I'm pension myself because I didn't think this was actually happening, but it is and I really just appreciate the opportunity to spend some time with you. I think, as we talked about, talent is going to be really important going forward and I think banks have been leaders...

...and UH really building out opportunities for their for their teams to grow and develop in this environment, and that's only going to become more important in the I think in the work of the future, how you with the tract and retain and develop your talent is going to become critical. All Right, well, remind you. Here are the three questions I ask everybody at the end. I think you know what they are, but Obama throw match anyway. Number One, what's the best piece of career advice you've ever gotten or given? The best piece of career advice was let your light shine. I got that from a fellow executive. WO'T WO't out him or her, but Um, that was advice that I got when I was really just at a pivotal moment and taking a look and really just trying to figure out what's next and it was you know, be authentic to you and, you know, figure figure out those things that you just want to continue to uh, to shine and develop. And you know, it was the best advice that I got. It took me some time to really Um accept it that it wasn't all linear, Um, that your your path is never just linear. It's Um it's for you. You are the only one in which you're sort of racing against so um in that. In that sense, it it really is a great advice. It reminds me of the Steve Jobs graduations piece of Stanford and if you're listen to that. But at the point was you can you can only live a career force, but you can only understand it and connect the dots looking back. Is it's not a linear path. In the path may not make sense at the time, but if you follow what's true to you, when you look back you'll see how the dots kind of good to get you where you were. I was. It was always one of my favorite concepts. Absolutely let your light shine. Number One. Number two, what's the best piece of advice you've gotten about the consumer? Banking or consumer lending space generally, change is constant and you know, learn as much as you can about the business right. Don't let me in yourself, and it's not to say that you're not going to be a master of none, but as you continue to grow in the space, I think it's important to have a deep understanding of all the many things that make up the work of a banking that's, you know, in our work at the N B A. I'm I'm excited to be a part of that deliberate process to help broaden perspectives for rising bankers. I love that because I've always felt like Um, too many employees I know understand their job but don't understand the context of how it fits into the business, how the business makes money, right, how you how your job contributes to margins or profit or revenue or cost or or whatever, wherever you fit. But understanding the financial how how it actually close to the business, how your business works, what the roles are and where you fit in that. It's such a critical thing if you really want to have opportunities for advancement assifally a bigger picture. That's a great it's a great piece of advice. I give that that basic advice to a lot of people understand that. The big picture. All right. Last but not least, on one bold prediction for the future. What do you got for me? Well, one bowld prediction for the future. Uh, I'm no economists. I don't play one on TV or on twitter, but I will say I think, Um, you know, taking a look at you know, listening to the economists that I know and you know, especially archief economists at the N B A, you know there there will be uh, some drag after seeing, you know, the highest CPI number and in forty years and demands being cut Um, here, there and everywhere. I think, Um, my big bowld prediction for the future is that we will get back to uh numbers, but it will be a little while before we get there. All Right, I'm not sure that's the note I wanted to end the podcast on Roman, but you know that reality is what it is. The prediction is what it is and I appreciate your you're taking the time to come here and share your your thoughts and perspectives with us. So so thanks for doing that, Jeff. Thank you so much for having me help start partners with thanks credit unions to...

...help grow their consumer loan portfolios and deliver a modern, all digital lending experience. As the average consumer becomes more digitally savvy, it only makes sense that their bank does too. UPSTARTS AI lending platform uses sophisticated machine learning models to more accurately identify risk and approve more applicants than traditional credit models. With fraud rates near zero. Upstarts all digital experience reduces manual processing for banks and offers a simple and convenient experience for consumers. Whether you're looking to grow and enhance your existing personal and auto learning programs or you're just getting started, upstart can help. Upstart offers an end to end solution that can help you find more credit worthy borrowers within your risk profile, with all digital underwriting, onboarding, loan closing and servicing. It's all possible with upstart in your quarter. Learn more about finding new borrowers, enhancing your credit decisioning process and growing your business by visit upstart dot com slash forward dash banks. That's upstart dot com slash forward dash banks. You've been listening to leaders and lending from upstart. Make sure you never miss an episode. Subscribe to leaders and lending in your favorite podcast player using apple podcasts. Leave us a quick rating by tapping the number of stars you think the show deserves. Thanks for listening. Until next time,.

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