The Best of American Banker Magazine for 2024

December 18, 2024 12:00 PM

The banking industry in 2024 was marked by increased regulation, burgeoning fraud, the continued fallout of the COVID-19 pandemic and regional banking collapses, and uncertainty surrounding the election and incoming administration.

American Banker's reporters dove deep into these topics and more. Here are 10 of the top American Banker Magazine articles from 2024. Find the complete archive here.

Why gambling addiction is suddenly a problem for banks

Legal gambling in the United States has exploded since 2018, when Supreme Court decisions effectively dropped a federal ban on sports betting. Today, more than 38 states allow sports gambling.

The proliferation of online betting, coupled with the increased speed at which money moves and the large amount of transactional-level data that banks keep on their customer base, has ignited an industry-wide debate as to what – if any – responsibility banks have to curb problem gambling.

Increased gambling opportunities have also given rise to new credit products specifically tailored to bettors that allow consumers to wager now but pay later, further exacerbating the problem.

Is there a way in which banks, gambling operators, and regulators can come together to mitigate risks associated with gambling? Read the full article by Kevin Wack here.

Citi: The megabank that is always rebuilding

When Jane Fraser became the CEO of Citigroup in March 2021, she undertook the monolithic task of restructuring the country's third-largest bank by assets into a leaner and more profitable organization after years of lagging stock prices, regulator mishaps and global bloat.

2024 marked a crucial year for Fraser to demonstrate tangible progress to investors in the company's largest restructuring effort to date. Notably, she implemented a plan to reduce management layers from 13 to eight and revamp reporting structures so that the heads of all five major business lines now report to Fraser. She also divested consumer franchises in numerous countries while keeping risk-management deficiencies a top priority.

Read about Citi's transformation in Allissa Kline's article here.

President Biden Speaks During National Small Business Week

Ting Shen/Bloomberg

SBA's push to revive an old idea

For the Small Business Administration, is the second time the charm?

The SBA this year sought to revive a 2022 plan that would allow the federal agency to originate loans and guarantee them under its flagship 7(a) program. SBA Administrator Isabel Casillas Guzman sought to take on disparities in loan approval rates though the SBA's direct lending initiative but was met with staunch opposition from Republicans and financial trade groups, who opposed the proposal on the grounds that it would increase costs and harm the relationship between lenders and small businesses.

Just how did the fight shake out, and what will the SBA need to do to get its plan across the finish line? Jim Dobbs explores this in his article here.

American Banker

Two thefts decades apart, and a victim's quest for answers

When Rosemarie Brekke deposited $45,000 her mother received for Holocaust reparations in her newly created Bank of America savings account, she had no idea more than half of it would be taken by the bank to settle a debt on a fraudulent business credit card opened in her name with a fake LLC.

After more than $27,000 was taken to settle the debt, a closer inspection of the credit-card application revealed a slew of red flags, including a misspelled name and a different address, all of which Bank of America failed to detect.

In this article, Kevin Wack explores the challenges of identity theft and the difficulties victims face in resolving such issues with large financial institutions. Read it here.

The racial wealth gap is getting wider. Can technology fix it?

Despite billions of dollars invested in racial equity initiatives by banks, the racial wealth gap between white and Black families has only grown. Historical injustices, systemic biases and a lack of access to opportunities for people of color have all been attributed as causes to the widening divide.

The banking industry has been looking to fintech and artificial intelligence to help close that gap. Proponents of using AI argue that the budding technology can improve credit access and fairness in lending, but using it as an underwriting tool also carries risks of perpetuating biases if not developed and implemented responsibly.

What, exactly, is the role of AI in helping underrepresented communities increase their total wealth, and what role does the banking industry play in ensuring a more equitable society? Penny Crosman explores this and more in her article.

The members of the Shadow Open Market Committee sit at a long table facing an audience.

Manhattan Institute

Stepping out of the shadows to take on the Fed

For more than 90 years, the Federal Open Market Committee has been tasked with overseeing monetary policy designed to promote maximum employment, stable prices and moderate long-term interest rates. But who watches the FOMC?

Enter the Shadow Open Market Committee, a group of economists – including former Fed presidents and advisors – that have been providing an alternative perspective on the Fed's policy for more than 50 years. The SOMC's influence has been waning over the years, though, amid an increasingly crowded media landscape.

Now, the group is eying a return to prominence as it looks to reach a wider audience and tweak its approach to have a greater influence on its goal to hold the Fed "intellectually accountable."

Read how monetary policy is shaped from the shadows in Kyle Campbell's article.

A non-alarmist guide to the risks in commercial real estate

When the COVID-19 pandemic sent everyone home, once bustling business hubs across America were transformed into eerie, desolate landscapes. As time went on, empty storefronts were plastered with "For Rent" and "For Sale" signs as landlords looked to fill vacancies.

Those pressures are trickling up to banks, especially ones with heavy exposure to commercial real-estate loans. And while prophecies about a wave of bank failures caused by those sickly CRE loans haven't come to fruition just yet, there are plenty of cautionary signs in play today that could take years to play out.

Catherine Leffert and Polo Rocha explore what's happening with CREs in this article.

Banks ponder, 'What's in a name?'

Why do so many bank names sound so familiar?

Whether it be "First Citizens" or "Citizens First," many banks share similar names that create confusion for consumers and present marketing challenges as these banks look to set themselves – and their products – apart from the competition. And while changing a bank's name is no easy task, it can be a key tool to help drive geographic expansion or improve online visibility.

Dive into the deep and complicated world of bank names with Miriam Cross, including the impact of 19th century banking laws, the history of naming regulations in the U.S., and case studies of successful rebands here.

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American Banker

The Most Powerful Women in Banking 2024

For the past 22 years, American Banker has celebrated women in the banking industry in its flagship ranking of the Most Powerful Women in Banking, which uses a number of criteria for selecting the honorees, including the size and scope of the candidate's job, innovation she brings to the role and her influence within and outside of her respective organization.

This year's list featured established women leaders and a handful of newcomers. And while women are rising to key leadership positions in the banking industry, there is still much work that needs to be done to increase representation, especially in the highest levels of leadership. Women made up about half of most junior roles in banking but only 28% of C-suite roles at the end of 2023, according to McKinsey.

Read about all the honorees here.

Public Behavioral Healthcare Advocates Attend 'Walk A Mile In My Shoes' Rally. Mental health matters

Emily Elconin/Bloomberg

How banks are prioritizing mental health in the workplace

Amid broader national awareness of mental health needs, some banks are paying more attention to employee assistance programs for their own workforce. In fact, nearly every bank on American Banker's 2024 Best Banks to Work for list had an EAP program, but several have gone beyond the minimum to find new ways to meet employees where they are in what once was a highly stigmatized and off-limits area of business.

There's plenty of reasons why a bank would want to prioritize team members' mental health: increased productivity, happier employees and better social capital, just to name a few. But moving beyond EAP programs isn't a one-size-fits-all approach, and banks will have to navigate privacy concerns and individual team members' needs to be effective.

Read Joey Pizzolato's discoveries about EAP here.