In Customer Experience, Trends, Underbanked

This past April, I was in Washington DC for the annual CBA Live 2019 conference. You can read the full list of takeaways from the conference here, but one of the highlights for me was a chance to make a personal connection with Richard Hunt, the President and CEO of the Consumer Bankers Association.

If you don’t know Richard, he’s definitely a member of the “Who’s Who” in retail banking. Since 2009, Richard has been representing the industry and frequently sharing his candid thoughts with policymakers, stakeholders, and the media. He has testified before Congress on a number of issues related to retail banking and continues to advocate for and on behalf of the nation’s banks.

I was thrilled to get Richard’s commitment to participate in a podcast episode as a follow-up to that conversation. I had a chance to interview the “Cajun Banker” recently, and here are some of the key themes that we discussed.

For the full experience, be sure to listen to the entire episode of this podcast, titled ‘Bullish on Banking.’

The Golden Window for Banking

During the course of our conversation, Richard was very clear that he sees the immediate future as a very bright point for banking. To quote him:

“I think the next four years is a golden window for banking. …I’m more bullish about banking, especially the retail side, than any time in my 10 year history at CBA.”

When the CEO of the CBA talks about a golden window, it’s time to take note. Many of the bankers I speak with feel the same way, and the numbers back up the sentiment.

According to a report from Deloitte, the top 1000 global banks are bigger, more profitable and better capitalized today than they were 10 years ago. And while some economists are pointing to a potential slowdown in the next 18 months, current signs are pointing to continued growth.

Rules and Regulations

You can’t really have a nuts and bolts conversation about retail banking in the US without taking into account the Federal regulatory side of the equation. Discussions at CBA Live 2019 ranged from the implications of changes to small dollar lending rules to proposed changes in the Community Reinvestment Act. In this podcast, Richard and I took a step back to discuss the state of the industry when seen from a regulatory point of view.

“I think we’ve got a great team especially retail bankers out there who want to do the right thing and are going to fight every single day. Nobody wishes to return to 2004 – 2007 with horrible underwriting standards. We’re not trying to roll back Dodd-Frank. We’re just trying every single day to make sure we serve our customers on an hourly basis because they have demands and expectations and we’re there to meet with them. We certainly know that if a person doesn’t like a certain bank they’ve got about 4,800 other choices.”

Financial Inclusion and Financial Education

One of the topics we discussed was the issue of financial literacy and financial inclusion in the US. We both agree that there is a tremendous opportunity for both banks and consumers to improve in both categories.

The fact is that more than 40% of Americans cannot cover a $400 emergency expense[i], but the number of Americans who said that they would be able to handle an unexpected expense has crept slightly higher since the Fed began surveying people in 2013.[ii] It’s still hard to deny that there’s an opportunity for both consumers and banks to get more actively involved in the day-to-day management of personal finances.

Richard said it quite nicely in our interview:

“We have to do a better job making sure people feel comfortable in the banking industry. We have the services they need.”

Industry Predictions and More

These themes are just some of the exciting topics we covered in our discussion. Richard shares his predictions for merger and acquisition activity, but I’m not going to spoil the episode by sharing those here!

Be sure to check out “Bullish on Banking” for the full conversation. A special thanks to Richard Hunt, the Cajun Banker, for his participation. Enjoy the episode!

Want to hear the entire episode?

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