A tale of two statues: Around the first anniversary of the #BankBlack movement in July, a statue of Maggie Walker was erected to commemorate her contributions to banking. Notably, it was less than 100 miles away from Charlottesville, Va., where white supremacist and neo-Nazi groups protested the removal of a Confederate statue two weekends ago, leading to deadly violence, presidential equivocating and national outrage. “What she is most famous for is becoming the first African-American woman to charter a bank,” said Benjamin Anderson, a park guide at the Maggie L. Walker National Historic Site. It was a remarkable accomplishment – the bank was opened in Richmond, Va., in 1903, by an African-American, and by a woman, Anderson pointed out. “This is the South. This is the former capital of the Confederacy. This is long before women can vote,” he said. Walker’s bank, called St. Luke Penny Savings Bank, issued loans to qualified black customers at a fair rate to encourage economic independence and thrift in the black community. “Let us put our moneys together,” Walker said in 1901. “Let us have a bank that will take the nickels and turn them into dollars.”
Libor talks ignoring loans: A Fed committee studying Libor’s replacement has focused on the potential impact to the derivatives market, without much consideration of the loan market. Those were specific instructions from the Federal Reserve and Financial Stability Board, according to Sandra O’Connor, chief regulatory affairs officer at JPMorgan Chase. “It’s important to note that, when you’re talking about the derivatives market, most reference the Libor rate,” or London interbank offered rate, she said. “Yes, there are loans tied to Libor. But derivatives’ referencing of Libor is enormous.” Libor is pegged to about $350 trillion of derivatives, loans and securities and touches everything from residential mortgages to commercial-and-industrial loans to student loans.
The key to a healthy customer relationship: Wells Fargo retail bank chief Mary Mack is telling branch staff to throw out the aggressive sales quotas and urging them to listen to customers. Wells is betting on this strategy to rebuild trust and reverse its sliding profits. The bank generated $981 million less in profit in the last 12 months than it did a year earlier. “We’re focused on what customers really need and what customers are really trying to solve for,” Mack said. If the bank can address those desires, “then that outcome is growth.” In the first half of this year, Mack eliminated dozens of executive roles and closed 88 branches; even so, she cut fewer than 10 front-line staff in the process.
Security checks: Like many financial companies, TD Ameritrade wants to go where customers are, and that means communicating with them via a third-party platform. So the brokerage created a Facebook Messenger chatbot that gives customers instant updates on their portfolios and trades. The big question for most financial institutions is whether they can offer these types of customer interactions at bank-level standards of security, and TD Ameritrade is no exception. “From the early days when this was still just an idea we wanted to explore, we brought in experts from legal, security, compliance, privacy,” said Sunayna Tuteja, director of emerging technologies and innovation. “We connected them to experts on the Facebook side, because we wanted to make sure that as a firm we were comfortable that what we were going to be offering consumers on Facebook Messenger had the same level of privacy and security you would get when you’re using our website or mobile app.”
One tactic to bring change to the boardroom: To promote boardroom diversity, try appealing to wealthy investors who are interested in supporting companies with successful diversity initiatives, says April Rudin, chief executive and founder of The Rudin Group. Women may not have adequate representation in boardrooms or senior management but they control 30% of private wealth (and that percentage is growing). There are more female entrepreneurs now than ever, women live longer than men, and 88% of women want to fund and support projects that promote social good, which is why gender-lens wealth investing is a good way for them to begin making more impact. And research shows that, by tilting their equity portfolios toward companies with a higher proportion of senior female executives and directors, they're likely to see higher returns on their investments.
Beginnings: Starling Bank Chief Executive Anne Boden spoke to CNBC about her introduction to fintech when she worked as global transaction services lead for the Royal Bank of Scotland. "While I was working on the aftermath of the crisis and turning the organization around to focus on customers much more, I learned about fintech, and I came across a number of fintech companies that were doing things with £30,000 ($38,618) that the big banks were doing with £30 million," she said. “While the whole industry was looking inward on itself, these people had come up with huge opportunities to do things that were great and transformative for customers.” Boden later joined Allied Irish Bank as chief operating officer before founding the mobile-only challenger bank Starling. She has also held executive positions at UBS and ABN Amro. In this interview, she discusses quitting her job at AIS, open banking and the future of Starling.
You do what you see and not what they say: How do you get people to do the right thing? U.S. Bank's first global chief ethics officer, Katie Lawler, said culture influences employee behavior more than written rules. "You can't teach people to be ethical but you can create an environment where they are more likely to make good decisions," she said. "Research shows people behave in a certain way not because of rules; they decide how to behave by looking at the people around them and seeing how they are behaving. You just can't rely on rules."
Role call
Stacey Goodman will join Freddie Mac as chief information officer and a member of the senior operating committee on Sept. 25. She was previously CIO and chief operating officer at CIT Group and before that held senior-level positions at Bank of America and UBS.
Wells Fargo has named Beverly Anderson head of cards and retail services. Anderson has been the interim leader since March of this year, and previously led the consumer credit card business.
First Citrus Bank in Tampa, Fla., has hired JoEllen Henderson as its chief credit officer. She previously held the same title at Tampa’s American Momentum Bank.
In case you missed it
Millennial-minded marketing: More than 60% of new Ally Bank customers are millennials, according to president Diane Morais. This is at a time when most traditional banks ‑ Ally is a digital-first bank — are struggling to win over that same population. Morais talked about Ally’s many efforts to attract a younger generation of customers and keep them happy on a recent American Banker podcast. She said its latest products, in particular its debit card control feature, give millennials exactly what they want: control. The feature lets customers specify how they want or don’t want to use their card and change those preferences as they wish. For example, they can turn off all international or online usage — and would get an alert if the bank logged card activity in another country or at an online retailer.
Beyond banking
Quick response: California State Sen. Hannah-Beth Jackson will introduce legislation to clarify legal protections for entrepreneurs in response to “recent and stunning” allegations by women of harassment by venture capitalists. This follows the resignations of 500 Startups founder Dave McClure and Binary Capital's Justin Caldbeck, after allegations from multiple women of unwanted advances. Jackson’s proposal would amend California’s Unruh Civil Rights Act, which prohibits sexual discrimination at California businesses, to clarify that it covers sexual harassment in relationships between entrepreneurs and potential investors. Current law doesn't specify entrepreneurs and potential investors, though it does mention doctor-patient and attorney-client relationships.
Equality vs. equity: Equality is about more than putting people on a level playing field, according to Kaiser Permanente CEO Bernard J. Tyson. “We’ve evolved from equality to equity. Equality says everybody gets equal. Equity says no, everybody gets what they need,” he said. “Part of building an inclusive environment is not how you’re going to change the person. It’s how you’re going to change yourself and the environment in which the person is going to have to succeed.” Read more about what 11 CEOs have learned about championing diversity here.
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