Last week the Indiana Bankers Association and its Future Leadership Division (FLD) held the second annual “Bridging Bankers, Building Leaders” conference. Attendee evaluations indicate that there is a great value to this event, designed for emerging bank leaders. IBA and FLD planners assembled an impressive list of speakers and panelists to discuss issues of relevance to the young bankers in attendance. While those speakers were outstanding, the opportunity to network with similarly situated banking peers from throughout Indiana may have been the key takeaway for participants.
Once again, I was struck by the intelligence and fundamental understanding of the business of banking displayed by these bright young people who attended. In the past, I admit that I have bemoaned what I misperceived as a lack of interest and skill among many young bankers. No longer do I harbor that concern. With programming such as this FLD conference, graduate schools of banking, our leadership development programs and overall attendance at a variety of skill-specific seminars, I have had the opportunity to meet many bright, energetic and engaged young bankers.
Part of my concern had centered on circumstances that, for many years, combined to create a vacuum of young talent. In 1980 Congress deregulated interest rates that could be paid on various deposit accounts. This artificial control of deposit rates also tended to artificially control loan rates. When deregulation occurred, prime rates ballooned to over 20 percent per year. Adding insult to injury, the 1986 Tax Reform Act devalued certain real estate property by about 20 percent. This series of unfortunate events, combined with the interest-rate deregulation which did not fairly allow for any protection of existing fixed-rate real estate loans, teed up the so-called savings-and-loan crisis.
Another ill effect of this bad combination of political decisions was that banks discontinued hiring young people for management training programs for nearly 15 years. As a result, there were virtually no young people entering banking for several years. Today, however, that trend has changed. Young professionals are being attracted to the business of banking – and banking surely needs to continue to attract them. The business of banking is changing so rapidly that the baby-boom generation, which currently leads most banks, simply does not have the necessary background to deal with some of the new issues. This is particularly true in the areas of technology and, to a lesser extent, the new regulatory environment.
Many of these newcomers to the business of banking are digital natives, and we welcome them with open arms. New product-and-service delivery systems, particularly mobile technology, require their expertise. The new regulatory world for these young folks is all they have ever known, so they waste no time pining over bygone days. Boomers, on the other hand, remember a much simpler time; for them, adjusting to this new world can be frustrating.
All of the above means that an influx of bright, young professionals is needed to carry banking into the future. Contrary to popular opinion, these newer bankers do not expect to be named president of the bank anytime soon. They do, however, expect to be appreciated for the contributions they make and to be given the opportunity to learn and contribute. With these common-sense aspirations, they are not really all that different from the baby boomers that they will eventually replace. I seem to recall, early in my career, that I also wanted the knowledge to assume responsibility and a fair chance at advancement. Not much has changed!
Thank you to those who participated in the FLD Bridging Bankers, Building Leaders event. It was a wonderful opportunity for attendees to grow and to learn about banking. And for me, it was a chance to observe the next generation of bank leaders. I am confident that our future is bright.
– S. Joe DeHaven