It’s the end of 2010… … our heads are out of the foxholes… and… … well, we made it through. Compared to the last two body-slam chokehold years, 2010 was no worse than a bruised arm. The earnings aren’t back to the levels of the high times, but they’re not bad either. Capital is solid. Credit quality is holding. Washington didn’t kill us with regulation despite trying its best. Customers are still there and still pretty loyal. Hey, we’ve been through worse.
And, as we go home for the annual spiked nog immersion, the year-end trend line looks pretty positive. The 401(k) was upgraded from critical to serious. We won as much on the Vegas trips as we lost – more or less. There aren’t any big new tattoos or piercings on the kids, at least none that clothing won’t mostly cover. There’s a new medical marijuana clinic on the corner where the Blockbuster used to be – progress? Aunt Gertie fired the Shaman boyfriend, cancelled the visit to the Burning Man festival, then announced she’s back with you for Christmas and she’s bringing the Pabst Blue Ribbon 12-pack and that bean salad. And we might actually need that new tie/scarf/deep fryer. Man, compared to 2009, this all screams party time!
Well, we have the party starter for you – The 2010 GonzoBanker Awards. Here’s our take on the year broken into the general categories of thumbs up, thumbs down, and the whaaaaat? As always, the thoughts are nobody’s but ours – and frankly, we’re not sure that anyone else would want to claim them. So, take a moment, relax, have a read and enjoy.
THE BANK AWARDS
Bank Deal of the Year
- M&T takes Wilmington Trust. What a tragedy to see such a great old-line bank cease to exist, but kudos to M&T for seeing the value of $25 billion of assets under management in the midst of clear and present credit risk.
- Bank of Montreal takes Marshall and Ilsley. M&I is a great bank with a “sand-state” growth strategy that bit it hard. At only 1.0 times tangible book, this was a nice opportunistic move for BMO. Let’s hope customer service stays at the historically high levels of some trusted Wisconsin bankers.
Bank Merger of the Year
Goes to Hancock Bank and Whitney Bank – two solid Gulf Coast franchises who have the opportunity to make a terrific $20 billion regional powerhouse. Congrats to our friends on both sides of the deal.
Credit Union Deal of the Year
Addison Avenue and First Tech agree to a merger of equals. What a great shot fired over the bow for all credit unions to see that healthy, scale-driven mergers in the credit union industry could make sense. Hats off to Benson Porter and Tom Sargent for orchestrating this high profile transaction.
Gonzo Banker of the Year
- Large Bank – Richard Davis, US Bancorp. Sure, this is the same conclusion the American Banker came to but those folks are right. US Bank has done some nice bottom feeding in California and Chicago and continues to show the industry what a low efficiency ratio should look like.
- Community Bank – David Payne, Westamerica. For 25 years now, performance has simply been the word to describe this $5 billion California banking gem. Payne has been the tough and disciplined architect of a remarkable bank stock.
- Credit Union –Randy Smith, Randolph-Brooks Federal Credit Union. This San Antonio-based cooperative is doing lots of things right, from SBA lending to technology deployment to building a positive corporate culture. Randy Smith and his team have quietly built a truly impressive franchise.
The Always On Full Throttle Award
There is no greater Energizer Bunny in the financial industry than Vernon Hill. Brushing off any vile thoughts of the OCC, Vernon took his innovative bank retail model this year to jolly old England and shook the town with Metro Bank’s opening in the summer. Plans are for 200 Commerce Bank-like branches in the Big Smoke.
The Cobra Strike Team Award
Quick, agile and efficient, the award this year goes to Financial Service Centers Cooperative, a shared branching innovator, for its uncanny ability to process nearly 32 million transactions with only 30 people, and that includes everyone from the CEO on down through the organization. Just incredible productivity… …
CUSO Executive Who Will Be Missed the Most
Dave Serlo, former CEO of PSCU Financial Services. Dave was a visionary, a gentleman and a leader truly loved by his employees. Dave was employee #1 at PSCU, and under his careful guidance for 27 years grew PSCU to be the largest CUSO in the country with over 1,500 employees and nearly that many credit union clients. We lost Dave to cancer on June 25, but the culture he built at PSCU will live on for a long time.
The Buttsmoochio Award
We know how this looks, so we’ll give this one to ourselves. But three cheers for Jack Barnes being promoted to CEO of $22B Peoples United Bank. Through a lot of tumult and crazy change going on at PUB, Jack emerged as an experienced, pragmatic, no-BS manager with zero aversion to getting his fingernails dirty with the important issues. Add to it the fact that he’s a hell of an approachable guy who has earned great support and respect from peers and employees alike, and you have a golden choice for a CEO.
THE TECHNOLOGY AWARDS
The Technology of the Year
Mobile Deposit Capture. Extensive television ad exposure brought awareness of mobile deposit capture to millions, putting it on the delivery channel roadmaps of countless institutions. The technology that allows customers to use their mobile devices to make deposits vs. visiting a branch is sure to take a chunk out of branch and ATM deposit activity in coming years.
Technology Buzz of the Year
Mobile Payments. A land grab for mobile payments share is in the offing with various technologies competing for consumer acceptance. RF stickers, microSD cards with NFC, mobile applications using alternative closed-loop payment systems, and other technologies are going to be slugging it out for mobile payments share.
The No-Show Technology of the Year
Commercial straight-through processing. Automating the commercial lending process continues to be Ahab’s “white whale” in banking. The vendor market has delivered early rounds of straight-through software, but vendor support and banker moxie have been missing ingredients. It’s time for this industry to roll up its sleeves and go after reinventing one of the most costly processes in any banking organization.
Stuck on the Runway Award
Packaged Business Intelligence. It’s a rare financial institution that’s satisfied with its reporting capabilities. For years vendors have been promising better answers to business intelligence and for years the situation hasn’t improved. The good news is that improvement in the reporting and database tools that Microsoft provides make a roll-your-own approach more viable than it’s ever been. (We’re not Microsoft fans by any stretch but it’s a rare financial institution that’s not running their technology stack.)
Best Bet for Sagging ATM Sale
Gold-Dispensing ATMs. Straight outta Abu Dhabi it’s a dispenser for the hottest commodity around – Gold. Gold to Go recently made its debut at the Town Center Mall in Boca Raton, so next time you’re in the neighborhood and feel like increasing your exposure to metals, drop by for a gold bar or two. Heck, with our current QE2 monetary policy, maybe the U.S. will have lots of lines at the ATMs to snatch up a hard metal commodity.
The Group That Still Really Needs Some Technology
Call centers. Text, chat, Facebook and God knows what else is coming, and most of them still don’t have screen pops or integrated images? Time to invest.
The 10th Annual Progress Report on Automated Branch Sales Reporting
Nothing to report.
The One Thing That Could Turn Consumer Lending on its Head
The Cloud-y With a Chance of Meatballs Award
As much as it pains me, the eternal Microsoft-hater, hats off to them for Web collaboration using the 2010 flavors of SharePoint and Office Web Apps. While Google Docs was first, cheaper and cooler, the fact is that the world is still addicted to bloated Word, Excel and PowerPoint. Oooops, that just slipped in. Team up the familiar Office interface with Microsoft’s SkyDrive, and you really have an enterprise collaboration tool with zero footprint. Of course, you’ll have to trust that Microsoft won’t let WikiLeaks get a hold of your merger due diligence documents or that lawsuit on the condo development foreclosure.
The Louis Pasteur “Innovation in the Petri Dish” Award
Virtual Desktop Infrastructure (VDI). Penicillin won’t make this go away. Not to be the little brother outdone by the success of Server Virtualization, VDI promises to be a more robust implementation of thin clients. With VDI, not only will users’ applications and configurations travel with them between devices, the device is not limited to a traditional thin client device or PC. This will be the underlying reason why you will not be able to say “NO” to the iPad and other tablets in your organization.
The Last to the Party Award
Card-maker Dynamics Inc.’s Card 2.0 technology. This technology lets a card have multiple mag stripes based on which button on the card the user pushes. So now a waiter with a skimmer in his apron can not only get your debit card info, but also your credit card, your gas card, your store card… … And who said we needed to migrate to the EMV chip & PIN card for security? Cool stuff, but a decade too late.
THE VENDOR AWARDS
Core Deals of the Year
- Bank – FIS Integrated Banking Services (Metavante) winning more of the large bank client deals from the dwindling Fiserv SourceOne client base than anyone ever expected.
- Credit Union – Spectrum customer and industry thought leader Patelco signs with fledgling Acumen. Expect to see repeated mentions of this deal in Acumen PowerPoint presentations in coming months.
Golden Cufflink Award
- Orlando Vanin, Fundtech. Good product knowledge, good industry knowledge, a good sense of the room, and a touch of Brazilian charm is a tough combination to beat.
- Wendy Conley, S1 . You have to love her New York style, her deep system knowledge and her straight shooter delivery. Makes a demo go way, way better.
Note to the Internet banking vendors: you don’t pay these people enough.
The Exorcist Award for Head-Spinning Internal Transfer at a Vendor
Fiserv Signature veteran, pro and all-around good guy Greg Disterhoft files his papers in triplicate and moves to the Fiserv CU core product, Acumen. Greg’ll be damn tough to replace at Signature.
The Disney-Pixar Vendor M&A Deal of the Year
Jack Henry fills in a big, yawning hole in its payments arsenal with the purchase of iPay.
The Garage Band Makes Big Award
Goes to uMonitor for its successful growth and sale to Harland. Proof once again that smaller innovators still have a place in the bank tech space to incubate new ideas and capabilities.
The Steve Burd Customer Focus Award
We have known him since he reported much deeper into the org chart, but one thing remains constant with FIS’s Frank Martire – customer focus. With the now-infamous online bill payment outage and embarrassing staffing shortfall with the IBS product’s conversion team, FIS will need every bit of Frank’s focus in coming months.
The Adios, Amiga Award
We’ll truly miss the straight shooting and matter-of-fact approach of retiring Symitar President Kathy Hooker.
The Huevos Grandes Award
This goes to Jeff Yabuki and friends at Fiserv for their very cool ZashPay effort. It takes some big ones to go mano-y-mano with PayPal.
The Big Mo’ (Momentum) Award for Ancillary Systems
Verafin. This entrepreneurial group of Newfoundlanders is simply tearing up the fraud and ALM market. Kudos to a 2003 startup that’s showing the big boys how to develop new cool stuff.
Remanufactured Buzz Phrase of the Year
Sapient for its BAI rollout of “Engagement Banking.” Another slickly packaged bundle of common sense: focus on the customer, make it convenient, customize to their needs. Retail banking needs a shot in the arm, but spending our time on generalities and buzzwords isn’t going to get us there.
The Waiting for Godot Technology Award
Fiserv’s Aperio. Think of the potential opportunity that the mammoth Fiserv could have with a kick butt business process management platform like Aperio. The problem: after years and years of promotion and limited implementations, Aperio is failing to catch fire and have any real impact in the industry. The technology may be state-of-the-art, but stronger delivery of more pre-packaged process improvements will be needed for this product to ever to a 2.0 victory for Fiserv.
The Clear Pepsi Award for a Product Seeking a Market – PFM
End user implementation rates are lower than a Nut Shot of the Week clip on “Pranked.” Does it stand for Pure Financial Molehill ? Pretty Frickin’ iMpotent? Pale Fluffy and Mandate-free?
The “Don’t Tase Me, Bro” Award for Best Industry Ejection
Cornerstone’s Hodgins, Sykes and Weikart all get unceremoniously tossed from the 2010 BAI Retail Expo for the unthinkable – handing out free GonzoBanker t-shirts.
The Brett Favre Regulator Award
After literally decades of rumors, finally OTS is going away.
Acronym We Really Hated in 2010
TDR (Troubled Debt Restructure – and all the accounting headaches that came with it).
The Excel Spreadsheet We’d Like to See
The one that came up with $.12 per PIN debit transaction as the proposed limit.
Biggest Marketing Trend of 2010
Delivery channel branding. From Chase’s famous new ad touting online convenience with newlyweds in bed remote-depositing checks, banks shifted their branding emphasis away from image and product in 2010 and more on convenience.
Best Branding Campaign of the Year
USAA. The emotional connection to this bank’s military customer base is well done and classy. Talk about a niche opportunity.
Biggest Marketing Trends Banks Are Missing
Viral marketing. It’s harder than the typical radio or billboard media buy and, in the end, requires real creativity, authenticity and originality. So far, banks haven’t shown the propensity to develop the content it will take to succeed in new media.
Biggest Bummer Headline of 2010
“Credit Unions in Bailout” on the cover of the Sept. 25 issue of The Wall Street Journal. Technically, it was a securitization guarantee and not a “handout” from the government but the bad branding had already gone public. What’s worse, The Wall Street Journal has been using this issue’s cover snapshot for all its recent subscription advertisements on national cable television.
Most Impressive Financial Internet Business
Quicken Loans. For those institutions wanting to know how to orchestrate Web marketing, remote delivery and a fast, consumer friendly mortgage process, look no further than this JD-Power award-winning group that funded a mere $25 billion of loans in 2009.
The Requiescat in Pace Award (R.I.P. for those of you that don’t play Assassin’s Creed)
The death toll bell for debit reward programs was sounded by the Feds on Dec 16 when a cap of 12 cents was proposed for all debit transactions, PIN or signature. In what may be a last ditch attempt to revive this dead, earnings-driving monster, Dr. Barney Frankenstein, co-author of the Dodd-Frank bill mandating this reduction, was heard saying, “I don’t think 12 cents is high enough for issuers to recoup their costs,” “Consumers won’t benefit from the reduction,” and, “I wish interchange had never made it into the bill.”
Lamest Marketing Milestone
“We’ve Got a Facebook Page!” Why work on petty issues like customer segmentation, rebranding, targeted marketing campaigns, and media plans when that all-important Facebook page needs to be created? Don’t forget to engage in the even more crucial corollary task: rounding up your Facebook buddies to “Like” your fancy new page.
Most Aggressive Response to Frank-Dodd
The Kardashian Kard. Before it was pulled from the market, 250 people paid for the privilege of carrying the exclusive Kardashian Kard. For a first year price of $99.95, [suckers] customers could enjoy the cachet of carrying around Kim and her sisters while being abused for ATM withdrawal, bill payment and reload fees on a regular basis. Nice try at filling that fee income hole!
2010 MEMORABLE QUOTES
Some Things Never Change…
Banker at a Vendor Demo: “Is the teller system posting these transactions real time?” Presenter: “Yes, our transactions are memo posted real time.”
Playoffs? Don’t talk about playoffs! Are you kidding me? Playoffs? I just hope we can win a game!
“We want to win the Super Bowl, but this management team has never even made the playoffs!”
–CEO of a small credit union to an amused consultant
THE BIG RECHARGE
The holidays are traditionally a time when financial executives focus on recharging their batteries – to take some time away from the office, read a good book and casually pore through business articles that help them soak up some perspective for the year ahead.
This year’s battery recharge will be an important one. At this point, our operating system has become accustomed to crisis and bad news. Sure, we’ve toughened up a great deal, but we’ve also frozen up a bit in the process. We’ve gotten used to “getting through things” instead of trying to create new things. For GonzoBankers around the world, 2011 will be about somehow reconnecting with that “zone” we all remember when banking can be interesting, wild and fun – when that next customer deal or product introduction or project completion gets the victorious fist in the air and the beer pouring. There’s a new normal in our industry that’s filled with regulation, more intense risk management, thinner-margin retail products and unprecedented mandates to innovate delivery. The GonzoBankers out there will look at this new landscape and remember, “When the going gets tough, the weird turn pro.”
Here’s to a wonderful holiday and productive “recharge” period in the next few weeks. Get ready to start writing the next chapter in banking come January.
The Supreme Court has ruled that they cannot have a nativity scene in Washington, D.C. This wasn’t for any religious reasons. They couldn’t find three wise men and a virgin. –Jay Leno