When the outgoing chairwoman of the American Bankers Association, Julieann Thurlow, thinks about the challenges facing banks, she pictures her own three children, all in their 20s, and their relationship with money.
"I'm most concerned about whether banks are prepared for the customer of today and the future," said Thurlow, who is the CEO of Reading Cooperative Bank, a mutual with $922 million in assets based in Reading, Massachusetts, near Boston.
Her daughter, a newlywed, used credit-card rewards points for her honeymoon. To generate these, she put many of her expenses on her credit card, paying directly from her savings account; she rarely uses her checking account, Thurlow said.
Meanwhile, Thurlow's two sons frequently sweep money out of the bank and into trading accounts with the fintech app Robinhood, she said.
Community banks like Reading, as well as larger banks, have to adjust their marketing, products and even branch locations if they're going to compete successfully for the attention of Gen Z customers like the young Thurlows.
"We need more endorphins in banking" the way that popular consumer apps have, she said. Otherwise, community banks' business model is in danger as the human touch goes digital and impersonal: "What used to be a building and a person is now a device."
To reach younger clients, Reading has two branches in local high schools, where students can work as tellers. The bank also has an internship program with four schools designed to lead to banking jobs. Reading also launched payments with Venmo in its mobile app.
But "that only goes so far" in growing the bank's reach, said
Founded in 1886, when the Industrial Revolution brought workers to live in dorm-like housing near textile mills and other growing factories, Reading Cooperative made its first loan to a woman, in an era when women could not yet vote.
The bank had $70 million in assets when Thurlow arrived in 1993, after a stint at the Federal Deposit Insurance Corp. In 2006, when she became CEO, the bank's assets were $250 million; now they're nearly four times that.
In the headquarters office, a large sign displays the bank's values — cooperative, mutuality, stewardship, independence, responsibility, leadership — and another sign near Thurlow's office is more pointed: "Cooperative, Dammit!" Under her leadership, the bank changed its bylaws to enshrine its mutual structure. Opening branches in Lawrence and nearby Lynn, rather than in Boston's wealthier suburbs, helps to support Reading's mission, she said, "making sure people have access to the American dream like anybody else."
Thurlow came up in banking during a period of broad consolidation. When she started, in 1988, there were some 20,000 banks in the United States; today there are about 4,500.
During her term leading the ABA, Thurlow has been the face of advocacy for the industry, arguing for more harmonized regulations as banks weather the fallout from the COVID-19 pandemic, inflation and 2023's banking crisis.
"Earnings are down, rates are down, loans don't reprice as fast," she said, ticking off the impact on banks this year. As more transactions move to apps, consumers sometimes fail to understand which institutions are on the other end, and whether they are federally insured the way banks are: "I don't think people realize that Starbucks or Dunkin app money is not protected."
Fraud is another pervasive worry for the banks Thurlow represents. With banks' defenses strengthened, "old ideas become new again," like the wave of check fraud that's newly resurgent, with reports almost doubling since 2021, she said. Automating business payments would go a long way toward eliminating the opportunity for check fraud, she said.
Meanwhile, the ABA is testing a new program to help banks route checks to those institutions that bear liability for the fraud and is planning an ad campaign to warn the public to be careful with checks and pay digitally when possible. "Consumers don't know their rights around fraud," she said.
"It should be pointed out that we need the federal government, law enforcement and other industries like telecom to join the fight against fraud," she noted.
More contentiously, the ABA and other banking groups have been fighting with regulators, and even suing them, over rules they feel are harmful to banks. "We pride ourselves on our relationships with our regulators," said Thurlow, noting that the trade group feels they have to come to the "defense of the community bank model."
Thurlow will hand over her gavel at the trade group's convention during the last week of October. John C. Asbury, CEO of
For now, there will no longer be a woman chair at the top of the ABA, but Thurlow hopes the industry's push to diversify will continue. In Massachusetts, she noted, 16% of banks have female CEOs, higher than the national average.
"We need to look like the people we want to bank," she said. "People are finally getting that."
