THE CASE FOR PERSONALIZED DIGITAL MARKETING AT COMMUNITY BANKS OFFICIAL PUBLICATION OF THE VIRGINIA ASSOCIATION OF COMMUNITY BANKS 2025 PUB. 14 ISSUE 1
Banking changes. Our commitment to you never does. Throughout our long history, we’ve stayed focused on keeping community banks on the cutting edge. We do this with industry-leading specialists, expertise and offerings – all backed with local banking knowledge. Learn more at travelers.com/business-insurance/financial-institutions travelers.com Travelers Casualty and Surety Company of America and its property casualty affiliates. One Tower Square, Hartford, CT 06183 This material does not amend, or otherwise affect, the provisions or coverages of any insurance policy or bond issued by Travelers. It is not a representation that coverage does or does not exist for any particular claim or loss under any such policy or bond. Coverage depends on the facts and circumstances involved in the claim or loss, all applicable policy or bond provisions, and any applicable law. Availability of coverages referenced in this document may depend on underwriting qualifications and state regulations. © 2024 The Travelers Indemnity Company. All rights reserved. Travelers and the Travelers Umbrella logo are registered trademarks of The Travelers Indemnity Company in the U.S. and other countries. CP-9620 Rev. 3-24 1890 Travelers begins to offer Financial Institutions coverage 1964 Travelers becomes one of the first domestic markets to write Directors & Officers Liability insurance 1999 Travelers brings its Identity Fraud Expense Reimbursement coverage to market 2011 Travelers CyberRisk coverage is introduced to the market 2024 Travelers and the ICBA Insurance Program’s Policyholder Safety Group Dividend plan has been paid for 22 consecutive years Dividend payouts have been over $80 million since the program began in 1983.
©2025 Virginia Association of Community Banks (VACB) | The newsLINK Group LLC. All rights reserved. The Community Banker is published four times per year by The newsLINK Group LLC for VACB and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of VACB, its board of directors or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. The Community Banker is a collective work, and as such, some articles are submitted by authors who are independent of VACB. While a first-print policy is encouraged, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (855) 747-4003. CONTENTS 10 13 VACB Board of Directors CHAIR Tara Y. Harrison Virginia National Bank Charlottesville CHAIR-ELECT Lisa E. Kilgour MainStreet Bank Fairfax VICE CHAIR Dabney T.P. Gilliam Jr. The Bank of Charlotte County Phoenix PAST CHAIRMAN Joseph R. Witt, CPA The Old Point National Bank Hampton ICBA VIRGINIA DELEGATE Blake M. Edwards Jr. Skyline National Bank Independence PRESIDENT & CEO Corey J. Connors VACB Richmond VACB Directors LeAnne R. Emert Benchmark Community Bank Kenbridge Cetric A. Gayles Citizens Bank & Trust Blackstone Aaron Green Pendleton Community Bank Harrisonburg James E. Hendricks Village Bank Midlothian Robert J. Hobbs CornerStone Bank Lexington Paul M. Mylum National Bank Blacksburg Thomas L. Rasey Jr. The Farmers Bank of Appomattox Appomattox Mark N. Reed Pioneer Bank Stanley Matthew H. Steilberg C&F Bank Toano VACB Staff Katharine C. Garner, CMP Vice President Education & Communications Kelli C. Mallinger Member Services Administrator President’s Column 4 Undiluted Advocacy A Worthwhile Endeavor By Corey Connors, President & CEO, VACB Chair’s Message 6 A Strong Start to 2025! By Tara Y. Harrison, Chair, VACB, Executive Vice President, Chief Financial Officer, Virginia National Bank, Charlottesville 8 Concepts and Facts ChatGPT Gets it Mostly Right on Yield Curve Shapes By Jim Reber, President and CEO, ICBA Securities 10 VACB and the ASP Academy Educational Partnership By Katharine Garner, Vice President of Education & Communications, VACB, and Dr. Kevin Streff, Founder, American Security and Privacy Save the Date! 12 25th Annual Bankers Cup Golf Tournament May 19, 2025 13 Bridging the Gap Successfully Managing a Multi-Generational Workforce Provided by the Virginia Association of Community Banks 16 The Case for Personalized Digital Marketing at Community Banks By Hannah Day, Senior Director of Digital Banking, CSI 18 SBA Launches Working Capital Pilot to Further Support Small Businesses By Miguel Penaloza, SBA WCP Subject Matter Expert 19 After the Sunsetting CAT Tool Replacement Options By Colleen Wynn, The AaSys Group Save the Date! 20 VACB 48th Annual Convention & Trade Show October 5-7, 2025 3 The CommunityBanker
President’s Column UNDILUTED ADVOCACY Corey Connors, President & CEO, VACB A Worthwhile Endeavor The simple goal of any mission-driven, member-centric organization should be to do what you say you do. For the Virginia Association of Community Banks, this means delivering “undiluted advocacy, targeted education, and quality collaboration to advance Virginia’s community banks.” VACB’s mission statement is succinct. It follows the “Rule of Threes,” a principle suggesting that items presented in threes are more effective, memorable, and satisfying to an audience than other numbers. Certainly advocacy, education, and collaboration are some hallmarks of exceptional nonprofit organizations. But VACB’s current mission statement poses some unresolved questions. Towards which stakeholders should VACB’s educational offerings be targeted? With which entities should VACB seek to collaborate? These are important queries that will be answered by the organization’s volunteer leaders in the coming weeks and months. We will ask these questions of you at our upcoming VACB Member Roundtables across the Commonwealth this spring (stay tuned to your emails and the new Community Bank Leader e-newsletter for details). Less ambiguous is the phrase “undiluted advocacy.” It means providing a strong voice for the unique concerns of community banks before policymakers at all levels of government. During the 2025 session of the Virginia General Assembly, VACB took a more active approach. By design and with intention, this amplification of our state advocacy efforts was a charge given by your Board of Directors upon my hire last September. As I shared during VACB’s 2024 Annual Convention, Virginia’s banking community was already blessed with two exceptional advocates in the Virginia Bankers Association: Bruce Whitehurst and Matt Bruning. Both were very gracious before and during session, sharing the knowledge necessary to successfully navigate through my initial foray into the complex world of banking policy. I was proud that VACB could better complement their many successful efforts this year. In reconnecting with state legislators under a new hat, I took an opportunity to gauge their perception of Virginia’s community banks. Your brand is incredibly strong in Richmond. The community bank experience that electees and appointees shared throughout session was genuine and overwhelmingly positive. Some were familiar with VACB. Others were pleased to learn that there was a voice dedicated exclusively to community banking. That brand perception played interestingly during two key legislative debates. First, Sen. Glen Sturtevant and Del. Tom Garrett introduced “debanking” legislation that aimed to restrict account closures based on political or religious affiliation. Supposedly aimed at large institutions, these bills may have created significant regulatory conflicts and potential liabilities for all Virginia banks. In Tennessee, where a similar debanking law was enacted last year, the legislature added 4 The CommunityBanker
an exemption for smaller banks. Though both Virginia debanking bills ultimately failed, the trajectory of the issue here and in other states raises a question: Could Virginia’s community banks have secured a similar exemption if the bills had gained traction? Next, Sen. Lamont Bagby introduced legislation addressing usurious online lending. While it was clear that loans made by Virginia banks were not subject to the legislation, the fintech lenders launched a misleading media and grassroots campaign in opposition to the measure. At protectborrowerchoice.com, you will find the following grassroots messaging: “Community banks and credit unions, when partnered with FinTech companies, provide credit to people who need something other than traditional loans. Partnerships help banks reach new markets and get more people into the banking system. They expand access, and this bill is trying to limit access.” Fintech partnerships undoubtedly play a vital role in the efficiency and competitiveness of community banks. But this mischaracterization of those partnerships tried to leverage our sector’s positive reputation to advance someone else’s political agenda. As of press time, SB1252 passed and is headed toward Gov. Youngkin’s desk for his signature, amendment, or veto. These examples clearly underscore the need for VACB to deliver on its promise of undiluted advocacy. While complimenting the outstanding work of partners at the federal and state levels, VACB must grow its ability to stand up and make a difference for you right here in Virginia. That is why the Board of Directors adopted a budget that dedicates annual fundraising activities to the enhancement of our advocacy function. Additionally, VACB must examine future opportunities to undertake proactive advocacy initiatives that support entrepreneurship in local communities. Reforming Virginia’s broken economic development apparatus and/or adopting a state-level SAFE Banking Act becomes increasingly possible with greater focus, effort, and improved resource allocation. The first and foremost consideration in public policy for community banks is to “do no harm.” But the promise of undiluted advocacy is that it can also open doors. So perhaps we can do some good too. www.bccadvisers.com WE VALUE BANKS. Business valuation for... ▪ Gifting and stock transfers ▪ ESOP/KSOP valuation ▪ Buy/sell agreements ▪ Estate settlement ▪ Stock offerings ▪ SBA 7(a) loans Lindy Ireland lindy@bccadvisers.com 434.333.6814 5 The CommunityBanker
Chair’s Message A STRONG START TO 2025! As I wrote in the fall of 2024, my aspirations as Chair during the upcoming year are an effective executive transition, identification of new sources of revenue for the association, and relentless support of and advocacy for community banks. With respect to an effective executive transition, Corey has embraced his new role as President and CEO with enthusiasm and full steam! He has worked diligently over the last few months on getting up to speed on the most pressing issues facing community banks in Virginia. He has made many important contacts in his first 100 days, contacts that will prove valuable over the years. Corey is equally focused on advocating for our community banks and attending to internal association matters. I believe wholeheartedly that our executive transition has been a success! Pertaining to new sources of revenue for the association, we are beginning to make strides. As we continue to experience increased M&A activity within our industry, our revenue from member dues is negatively impacted. Therefore, we must think outside of the box in how to generate sufficient revenue and/or reduce our operating expenses to properly support our members. I once again encourage you to explore the educational offerings of the VACB. Many hours are spent on selecting the best instructors and the most appropriate and relevant curriculum needed in the community banking space. Please utilize the VACB for your educational needs! Regarding relentless support of and advocacy for community banks, we continue to be active within the General Assembly, including challenging legislation that is misguided and duplicative, opposing a credit union’s ability to hold public deposits, and creating state-level crime and strong criminal penalties for mail theft, among other issues. Our collective voice is critical to our future and it is so important for that voice to be heard in Richmond and in D.C. I hope to see you and your fellow bankers at one OR ALL of the following 2025 events: • May 12-15: ICBA Capital Summit, Washington, D.C. • May 19: VACB Golf Tournament, Spring Creek Golf Club, Zions Crossroads, Virginia • October 5-7: VACB 48th Annual Convention, Hotel Roanoke We are also actively organizing Member Roundtables, where we bring together leaders of community banks within specific geographical regions to share a meal and discuss issues and potential solutions. Stay tuned for more information and your invitation! Together with Corey, Katharine, Kelli, your Board, and your Executive Committee, I am excited for what 2025 has in store for our association and our Virginia community banks! Tara Y. Harrison, Chair, VACB, Executive Vice President, Chief Financial Officer, Virginia National Bank, Charlottesville 6 The CommunityBanker
Is your community bank innovative? Meet Charles. Charles keeps ICBA members informed about emerging solutions that help solve specific community bank challenges. He listens to bankers concerns and plans programs that help get to the core of what our members need most. Even when he’s biking through the streets of Atlanta, he’s thinking about how we can help community bankers level up their fintech game. As an ICBA member, you’ve got Charles in your corner. Learn more at icba.org/innovation
CONCEPTS AND FACTS ChatGPT Gets it Mostly Right on Yield Curve Shapes By Jim Reber, President and CEO, ICBA Securities Note: In this column, for the first time, I relied on ChatGPT, the generative artificial intelligence (AI) platform. For the record, I submitted this inquiry: “Write a 700-word essay on how the shape of the Treasury yield curve affects community banks.” The following was generated in, I guess, three seconds, and most of it appears to be correct. I’ve taken the liberty of adding some commentary in bold, and there really aren’t many changes. In the future, I will only use AI if I fully disclose its assistance. And you’ll be able to tell because there’s no snark in AI-generated documents. THE IMPACT OF THE TREASURY YIELD CURVE ON COMMUNITY BANKS The Treasury yield curve is a critical financial indicator that depicts the relationship between interest rates and the maturity dates of U.S. government debt. Typically, the yield curve slopes upward, reflecting higher yields for long-term securities compared to short-term ones. This essay explores how the shape of the Treasury yield curve affects community banks, focusing on their lending practices, interest rate risk management, and overall financial health. UNDERSTANDING THE YIELD CURVE The yield curve can take on various shapes, primarily categorized as normal, inverted, or flat. A normal yield curve indicates that longer-term bonds have higher yields, suggesting economic growth; an inverted yield curve occurs when short-term yields exceed long-term yields, often seen as a predictor of recession; and a flat yield curve signifies uncertainty in the economy, where there is little difference between short-term and long-term rates. Each of these shapes presents unique challenges and opportunities for community banks. LENDING PRACTICES Community banks primarily generate revenue through lending, and the yield curve significantly influences their lending practices. In a normal yield curve environment, community banks can borrow at lower short-term interest rates and lend at higher long-term rates, which supports their profitability. For example, if a bank can secure funding at a 1% interest rate for a one-year loan and lend it out at 4% for a 30-year mortgage, the spread — essentially the bank’s profit — is 3%. This difference allows community banks to support local economies, providing loans for homes, businesses, and other community projects. Conversely, when the yield curve flattens or inverts, the profitability of these lending activities diminishes. In an inverted yield curve scenario, community banks may find themselves in a position where they borrow at higher short-term rates than the rates at which they can lend long-term. This situation compresses margins, potentially leading to a reduction in loan origination and, consequently, a slowdown in economic activity within the communities they serve. 8 The CommunityBanker
INTEREST RATE RISK MANAGEMENT Community banks must also navigate interest rate risk, which is the risk of financial loss due to changes in interest rates. The shape of the yield curve plays a crucial role in how banks manage this risk. In a normal yield curve scenario, banks can match the duration of their assets (loans) with their liabilities (deposits) effectively. For instance, if a community bank has long-term fixed-rate mortgages, it can rely on stable, lower-cost funding from short-term deposits. Wrong! This is the very recipe for exposure to rising rates. This alignment helps mitigate the risk of rising interest rates. However, during periods of an inverted or flat yield curve, community banks face increased interest rate risk. Not necessarily. The duration mismatch can lead to a situation where liabilities reprice before assets, exposing banks to potential losses. To manage this risk, community banks may engage in interest rate swaps or other hedging strategies, but these can be costly and complex, particularly for smaller institutions with limited resources. ASSET QUALITY AND LOAN DEMAND The shape of the yield curve also affects asset quality and loan demand, which are critical for community banks’ stability. In a normal yield curve environment, economic growth typically leads to increased demand for loans as businesses and consumers have greater confidence in their financial prospects. Community banks can capitalize on this demand, extending credit while maintaining healthy asset quality. However, when the yield curve inverts, it often signals an impending economic slowdown. As businesses and consumers become more cautious, loan demand may decline, and existing borrowers may struggle to meet their obligations, leading to increased default rates. This deterioration in asset quality can significantly impact community banks, which often have concentrated loan portfolios tied to local economies. It’s a bit of a non-sequitur to claim inverted curves cause a decline in credit quality. It’s more like the curve is reacting to that expectation. A rise in non-performing loans can strain capital reserves and lead to regulatory scrutiny. CONCLUSION The shape of the Treasury yield curve is a pivotal factor influencing the operations and financial health of community banks. A normal upward-sloping curve supports profitable lending practices and encourages economic growth, while an inverted or flat curve presents challenges related to interest rate risk, profitability, and asset quality. Community banks must remain vigilant and adaptable to changes in the yield curve, employing sound risk management strategies and maintaining strong relationships with their local communities. Understanding these dynamics is essential for community banks as they strive to navigate the complexities of the financial landscape and continue to support their local economies. Jim Reber (jreber@icbasecurities.com) is president and CEO of ICBA Securities, ICBA’s institutional, fixed-income broker-dealer for community banks. 9 The CommunityBanker
VACB AND THE ASP ACADEMY EDUCATIONAL PARTNERSHIP By Katharine Garner, Vice President of Education & Communications, VACB, and Dr. Kevin Streff, Founder, American Security and Privacy VACB and American Security and Privacy are proud to announce an innovative educational partnership in technology, cybersecurity, and data privacy! American Security and Privacy and Dr. Kevin Streff have developed the most comprehensive role-based training program in the technology space. It includes over 20 courses, each four to 12 hours in length, to address your ability to manage technology, cybersecurity, and data privacy at your bank. Enroll in one or enroll in them all. This program is only for bankers, using real bank examples to be immediately applicable to your financial institution. The partnership between VACB and the ASP Academy will ensure that a Virginia banker understands how to use technology in all parts of their ecosystem, including new technologies such as artificial intelligence and digital currencies/wallets. The Academy works to ensure that all bankers have the knowledge and skills necessary to protect systems and data against today’s cybersecurity and data privacy threats. The certification programs offered by the Academy are uniquely designed to address banking needs, using banking problems and solutions in examples and use cases. The instructors for the Academy are widely recognized as experts in technology, cybersecurity, and data privacy. There are six certification training programs in cybersecurity, six in data privacy, four in law and compliance, and four in technology. For example, your bank can professionally train your business continuity and incident handling professional using the Certified Banking Emergency Management Professional certification and the Certified Banking Incident Handler certification. Your Vendor Manger can become certified with six hours of training through the Certified Third-Party Manager program. If your head of technology wants to understand how to apply artificial intelligence in your bank’s operation, becoming certified in artificial intelligence in banking is a wonderful start. Even the board members can get certified with a crawl, walk, run model where there are three levels of certification with each being only an hour in length. These simply serve as examples for you to build technology and data protection as a real strategic differentiator for your bank, simply knowing more and being better at introducing and managing technology for your customers. The best part: Everything is online and at your pace — complete it over lunch hour, on the weekend, The CommunityBanker 10
Professionally trained banking professionals increase the likelihood of safe data handling, decrease expenses associated with data breaches, increase the likelihood of a successful IT exam, and provide confidence to bank examiners that the bank and personnel are taking the cyber problem seriously. or during the day. Your choice. If you want an annual subscription to all certifications for 2025, this is possible to stretch your education dollar. Technology use is on the rise and new approaches like the Open Banking Initiative and technologies like artificial intelligence and digital currencies will compound our technology management issue. Data privacy is just starting to be discussed, and investments will be necessary to provide consumer access and control over their data. The ASP Academy offers a certification in the newly published CFPB 1033 Rule, and this new partnership brings this training directly to Virginia bankers. Professionally trained banking professionals increase the likelihood of safe data handling, decrease expenses associated with data breaches, increase the likelihood of a successful IT exam, and provide confidence to bank examiners that the bank and personnel are taking the cyber problem seriously. The certification communicates to management, the board, stakeholders, and examiners that a professional at your financial institution can perform the necessary functions to manage and reduce security and privacy risks to the institution. If we know one thing about your IT examination, examiners love governance and trained employees. Demonstrate your commitment to security and privacy through this program and get ahead of your next IT examination. 11 The CommunityBanker
Register Now: www.vacb.org VACB and Williams Mullen Present: 25TH ANNUAL BANKERS CUP TOURNAMENT SPRING CREEK GOLF CLUB 9:30 AM Registration 10:30 AM Shotgun Start 3:15 PM Awards Reception MONDAY, MAY 19, 2025 Foursome Individual $700 $175 CONTESTS SCHEDULE Top 3 Finishers Longest Drive Closest to the Pin Questions? Contact Katharine Garner at (804) 673-8250 GOLF SPONSORSHIPS Captain’s Club: $500 Hole Sponsor: $200 Exclusive Opportunities CAPTAIN’S CHOICE FORMAT, MULLIGANS AVAILABLE
For the first time in history, we have five generations in the workplace, which also means bankers are juggling the interests, needs and communication styles of members whose ages span over a half-century. Each of these groups has been influenced by the socio-cultural events that took place during the formative years of their lifetimes, including how each generation views its financial needs, goals and communication preferences. A generation is defined as “a group of people born around the same time and raised around the same place. People in this birth cohort exhibit similar characteristics, preferences and values over their lifetimes.” This generational melting pot presents an interesting puzzle for both owners and management teams because a one-size-fits-all approach is no longer an effective way to engage all employees. In order for employees to be fully engaged and participate, it is important to communicate with them on how they wish to receive information. BRIDGING Successfully Managing a MultiGenerational Workforce Provided by the Virginia Association of Community Banks THE GAP 13 The CommunityBanker
Generations have differences in the values, beliefs and opinions of different groups of people. While some believe strongly in the differences, others believe they are a myth. Those believing in the differences assert they are important to recognize and accommodate, especially in settings with multiple generations in today’s workforce. • Traditionalists value workplaces that are conservative and hierarchical and have a clear chain of command and top-down management. • Baby boomers value workplaces that have flat hierarchies, democratic cultures, humane values, equal opportunities and warm and friendly environments. • Generation X values workplaces that are positive, fun, efficient, fast-paced, flexible, informal and have access to leadership and information. • Millennials value workplaces that are collaborative, achievement-oriented, highly creative, positive, diverse, fun, flexible and continuously providing feedback. • Generation Z values workplaces that offer security, are competitive and offer independence where they can multi-task and communicate face-to-face in an entrepreneurial environment. They are digital natives who want to be catered to. Leaders need to be adaptable and willing to compromise to effectively serve all generations. While it may not always be possible to find a middle ground, making an effort can create significant positive change. It’s important to work on bridging the generation gap without exacerbating it. Achieving this requires thoughtful conversations conducted in good faith. Let’s examine where intergenerational conflict may arise and the potential consequences if leaders fail to establish an inclusive path forward. COMMUNICATION Setting expectations upfront can help avoid any confusion while reaching business goals. • Set clear guidelines and expectations for communication channels and response times. • Offer training on effective communication strategies for leaders, focusing on bridging generational gaps. • Promote collaboration and communication across generations through group projects that develop intergenerational skills. • Provide cheat sheets during onboarding that include team communication preferences. Add personal details (pets, hobbies, etc.) to facilitate quicker interpersonal connections. • Train employees on scheduling emails for later to respect communication preferences, and not pressure them to respond outside of regular business hours, even if their colleagues are working during those times. THE WORK/LIFE BALANCE Different generations have unique expectations regarding work hours, flexibility and time off. However, preventing burnout is crucial for all age groups. Research indicates that an imbalance between work and personal life greatly contributes to burnout, leading to higher turnover rates and lower job satisfaction. To enhance work/life balance across generations while maintaining high productivity and morale, consider the following strategies: • Provide flexible work arrangements, including options for hybrid, remote or adjustable schedules. • Encourage employees to prioritize self-care and well-being by implementing wellness initiatives. • Establish policies and guidelines that encourage work/life balance and clearly define expectations for all employees. • Offer resources and support for effectively managing stress and achieving a healthy work-life balance. EMBRACING TECHNOLOGY Different rates of technology adoption can hinder team collaboration and engagement. Training and effective communication are essential to bridge the gap between these varying adoption rates. Consider the following steps to help your employees embrace technology: • Implement training programs to enhance digital skills across all generations, including opportunities for cross-skilling. • Foster a culture of questioning where individuals from any generation feel comfortable raising their 14 The CommunityBanker
hand and saying something like, “I’m having difficulty understanding the new process. I know I’ve asked before, but could someone please help me?” • Develop a technology adoption roadmap that includes ongoing support and clearly outlines training expectations. • Engage employees in the decision-making process and address their concerns about changes in technology. BENEFIT OFFERINGS Each generation appreciates different benefits. However, it's crucial not to make assumptions based solely on someone’s birth year. Instead, employers should ask employees about their specific needs and then offer them a range of options. This can make a huge difference in employee retention. Additionally, providing a wide variety of choices and benefits can distinguish employers in the competitive job market, helping them resonate with and attract talent from all generations. Failing to provide complete information about benefits or not communicating them clearly can hinder your ability to attract new talent. Job postings that explicitly mention various benefits, such as workplace wellness programs and flexible work arrangements, tend to receive significantly higher engagement rates from job seekers compared to postings that do not include these details. To enhance benefit participation, consider the following: • Regularly assess and revise benefit offerings to reflect changing demographics and incorporate employee feedback. • Clearly communicate the value and purpose of each benefit to ensure transparency and understanding. • Consider cafeteria-style benefit plans where employees can select the benefits that suit them best. • Ask the right questions to avoid overpaying for unnecessary benefits. For example, while some employees may express a desire for fully remote work, you might find that, upon further inquiry, they are actually comfortable coming into the office two days a week. CONCLUSION To maintain an up-to-date understanding of your workforce, establish feedback channels throughout the employee experience. Consider conducting stay interviews to gain insight into why employees choose to remain with the company and why others leave, rather than waiting for exit interviews after someone has departed. By approaching it this way, you can gather valuable insights that may influence your workplace strategy, lead to changes in policies and benefits, and help shape your plans for attracting and retaining talent. Remember, work cultures are dynamic and must evolve alongside your workforce. The suggestions in this article are not one-time fixes; instead, they offer ways to collaborate with your employees to find timely solutions tailored to your team’s needs. As you adapt and are transparent about your actions, the strategies you implement can go a long way in helping your business’s growth and success. After all, happy employees lead to happy customers. And isn’t that what banking is all about?
THE CASE FOR PERSONALIZED DIGITAL MARKETING AT COMMUNITY BANKS By Hannah Day, Senior Director of Digital Banking, CSI Today’s consumers expect a seamless, personalized digital experience, especially with their financial institution. As institutions look to grow, a one-size-fits-all approach to digital marketing is not as effective as data-driven strategies to personalize and resonate with customers on their chosen channel. Using data to develop personalized marketing initiatives on digital channels can help community banks break through the noise, reaching new customers and deepening relationships with existing ones. UNDERSTANDING YOUR CUSTOMERS: THE IMPORTANCE OF EFFECTIVE SEGMENTATION Understanding customer data and demographics is the first step in elevating your digital experience. At the most basic segmentation level, institutions should be able to differentiate between business and consumer customers. Each of these groups will have different messaging and product offerings. On the consumer side, various segments could benefit your institution, such as high-net-worth individuals, recent graduates or those close to retirement. Viewing your customers in segments allows you to better understand and anticipate their needs, as well as tailor what they see across their digital experience. Examples of segments include: • Life Stages: Certain life stages typically involve financial activity, and clues in a consumer’s financial data can indicate which common life stage or event could come next. For instance, a recently married couple has different financial needs or goals than one approaching retirement. If a customer recently had a series of wedding-related purchases and a last name change, there may be an opportunity to offer specific services or products more relevant to that life stage. • Credit Score: Surfacing an end user’s credit score within the digital experience is one of many powerful insights that data can bring to your customer base. Financial institutions could choose to direct educational content toward a group with a lower-than-average score. This approach allows you to determine types of products to market to this group that would increase their financial literacy and education. This segmented approach holds for business customers as well. Your institution could look at transactions for small businesses to determine the health and maturity of the company, providing you with insight into ways you can support them in their business journey. Whether they’re a startup, 16 The CommunityBanker
“mom-and-pop shop” or mid-sized organization, they will need solutions that address their unique needs. FIVE TOOLS COMMUNITY BANKS CAN USE FOR A HOLISTIC MARKETING STRATEGY The following are several channels to continue to explore as you nurture customers throughout their life cycle and reduce attrition: 1. Digital Banking Digital banking should be consistent across every channel. If a user logs into their account on a desktop, your bank can serve them with a personalized pop-up ad based on their segment or past transaction history. Your institution can communicate with calls to action and drive adoption through custom text, secure digital messaging and push notifications. 2. Customer Relationship Management (CRM) An effective CRM platform should provide a holistic customer view by linking sales, operations, branch, digital and call center interactions to support marketing opportunities. Your CRM should also allow you to schedule appointments, send notifications, release targeted emails or marketing campaigns and more. Updating your CRM with regular documentation like contact information, credit scores and marketing preferences can open the door to building personal connections and cross-sales opportunities. 3. Email Campaigns Often linked with CRM, email is another tool to help your institution communicate with customers. While some customers prefer in-person interactions, others may prefer receiving emails. Targeted marketing emails can be an effective way to reach customers with relevant offers. 4. Customer Service Tools Customer service tools like digital banking messaging and text, voice and video communication help bridge the gap between physical and digital channels. Chatbots can also be embedded in the digital banking experience to address customers’ immediate questions or needs and suggest related products or services. Authenticated chat can be managed by your institution’s employees or trained on preliminary conversations to expedite assistance. 5. In-Branch Experience Although most customers are comfortable navigating digital channels, some customers still prefer the branch for certain financial activities. So, your customer experience should seamlessly flow from the digital world to the physical one and vice versa. If someone begins a loan application online, the in-branch representative should be able to help them pick up right where they left off. BRIDGING THE DIGITAL DIVIDE: FINDING WAYS TO REACH YOUR CUSTOMERS The placement of marketing initiatives also varies within the digital experience. Some users — such as Gen Zers or millennials — may be more likely to use and engage with ads within the digital banking experience versus an email from your institution. Having flexibility within your digital experience to personalize the messages and locations based on your segment is critical. Community banks have always played a unique role locally and are well suited to take advantage of nontraditional methods to meet new customers. For example, in areas offering attractive outdoor adventures like hiking trails, some banks set up small booths to pass out water bottles or breakfast burritos emblazoned with a QR code to their website, blending physical and digital outreach. Ultimately, banks that blend these tactics, leaning into customer segmentation while meeting them in the channel of their choosing with campaigns targeted to their needs, will strengthen the relationship and trust with their customers. 17 The CommunityBanker
SBA LAUNCHES WORKING CAPITAL PILOT TO FURTHER SUPPORT SMALL BUSINESSES By Miguel Penaloza, SBA WCP Subject Matter Expert The U.S. Small Business Administration (SBA) introduced the Working Capital Pilot (WCP) Program, a new loan program that supports the complex working capital needs of growing firms. As the SBA’s first new loan program in more than a decade, it supports lines of credit up to $5 million and fully complements the agency’s term loan programs. The SBA designed the WCP to support daily working capital needs, inventory purchases, and project financing. Many small firms require a line of credit to support new clients and extended sales terms, and WCP provides a consistent framework that lenders and businesses can easily navigate. The initiative also combines domestic and export financing under one program, making it easier for internationally active small businesses to access capital. ADDRESSING THE NEEDS OF SMALL BUSINESSES The WCP supports both asset-based and transaction-based facilities. Asset-based WCP loans are best positioned to accommodate small businesses with working capital needs that are relatively consistent throughout the year. An asset-based WCP is also the facility structure that is most likely to be used by firms that are building a strategic inventory position. For companies who are taking on a contract or a large new buyer, the transaction-based WCP may be more suitable as it can support advances against individual orders. These facilities can be structured to support a single contract or used on a revolving basis for multiple projects. Transaction-based WCP loans can also be paired alongside asset-based facilities to support a company’s need for both types of working capital financing. A FLEXIBLE TOOL FOR SMALL BUSINESS EXPORTERS The WCP is modeled after the SBA’s Export Working Capital Program (EWCP). The key difference is that WCP is designed to support both domestic and export financing under a single facility. Now, this means that small businesses can obtain a single line of credit for their domestic business that can also expand to support international orders when and if opportunities present. For many small businesses, international trade represents a growth opportunity but can complicate existing financing arrangements. The WCP looks to simplify financing for businesses that may begin domestically but later expand internationally. A NEW TOOL FOR COMMUNITY BANK LENDERS The WCP is designed to complement existing SBA finance programs, offering community bank lenders a new tool to serve their small business clients. The WCP offers lenders a new revenue stream and an opportunity to serve more small businesses in need of flexible financing. Currently, all 7(a) lenders are eligible to submit transactions under WCP. Additionally, WCP allows delegated authority for lenders with experience in asset-based lending programs, such as EWCP, SBA CAPLine, and the Export-Import Bank’s Working Capital Guaranty Program. This feature will accelerate loan processing and expand the program’s reach. Program details and lender participation guidelines are available on the SBA’s website. Please visit www.sba.gov/7a and go to the WCP Program link or contact your local WCP Subject Matter Expert Miguel Penaloza at miguel.penaloza@sba.gov. 18 The CommunityBanker
AFTER THE SUNSETTING CAT Tool Replacement Options By Colleen Wynn, The AaSys Group So, just when we all have gotten used to the CAT Tool (well, maybe that is going a little far), financial institutions will now have to decide what new tool they will implement with the sunsetting of the CAT at the end of August 2025. While the FFIEC has provided several different options, they have not really provided any guidance. In fact, if you refer to the FFIEC IT Handbook regarding Control Self-Assessments (VI.D.3), there is only one paragraph describing the assessment. It is important to point out that the tool(s) are not risk assessments. They are, instead, an assessment of the cybersecurity controls processes of the financial institution, which is scored by placing the institution into a designated maturity level (rather than a measure of a risk answer such as reduction, transfer or avoidance). Not all the tools may provide scoring. While the Cyber Assessment is not a “requirement,” we all know that without a comprehensive tool for examiners to reference in understanding the maturity level of the institution and glean how risks are measured and managed, they will have to “dig” into other documentation to get the information they are looking for. So, what tool is right for your institution? CYBER RISK INSTITUTE (CRI) CYBER PROFILE • This is the only tool specifically designed for banks. The others are not bank-specific. • The tool is getting a lot of momentum in the banking space. • Examiners are currently training on this tool so they will understand how to evaluate cyber posture when reviewing the assessment. • Free to financial institutions. NIST CYBERSECURITY FRAMEWORK (CSF) 2.0 • Not bank-specific. • Focuses on governance and supply chain but should also be used along with other resources such as guidelines, best practices and standards. • Hard to implement. CISA CROSS SECTOR CYBERSECURITY PERFORMANCE GOALS (CPGS) • Not bank-specific. • Aligns with National Institute of Standards and Technology (NIST) CSF. • Focuses on governance, identification and management of risk, detection, response and recovery. • Free to financial institutions. CYBERSECURITY PERFORMANCE GOALS (CPGS) — SECTOR SPECIFIC GOALS — CISA • This is not available yet and is still in development. • The intention is to create a tool that will be applicable to specific sectors and will be rolled out in phases. • Financial services will be in the first phase, but no information is available on timing. CENTER FOR INTERNET SECURITY CONTROLS (CIS) • Not bank-specific. • Focuses on 20 controls and 170 sub controls. From AaSys’ standpoint, we prefer the CRI Cyber Profile because it is the only tool that is bank-specific, it is getting more traction than the others and seems to be the tool that examiners are learning. There is obviously more to come on this topic and staying engaged with your peers is a good way to gauge which way the industry will go regarding a new Cyber Assessment Tool. This information is being provided by Colleen Wynn, account executive at the AaSys Group. AaSys is a proud supporter of the VACB and provides educational resources to our Virginia Community Banks. Reach out to Colleen at cwynn@aasysgroup.com to learn more about options and The AaSys Group. 19 The CommunityBanker
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