Ensuring the Success of Our Next-Generation Bankers

Throughout our strategic planning process last fall, one of the recurring themes we observed in our survey results and heard loud and clear from every focus group was the need for the NBA to proactively reach out to and engage with the next generation of bankers. It was not surprising to see this issue discussed as an organizational priority; one simply needs to look at the enrollment within our various schools, training programs, and conferences to recognize that the demographics of the Nebraska banking industry are currently experiencing a seismic shift. With the strategic plan as our roadmap, your NBA team has initiated plans to provide new educational/training offerings and create networking opportunities for these next-generation bankers.

Government relations and advocacy have served as the bedrock of the NBA since our founding more than 128 years ago. To help our next-generation bankers better understand the correlation between their jobs/careers and politics/government, the NBA hosted its first Young Bankers Day at the Capitol on February 13. Twelve bankers from locations across the state joined your NBA team for a one-day orientation to the Nebraska Legislature. The event schedule included a general orientation of the Legislature, a live Unicameral legislative debate, a hearing of the Legislature’s Appropriations Committee, and lunch with a select group of state senators including Sens. John Stinner, Matt Williams, and Rob Clements. Sen. Ernie Chambers was even kind enough to personally thank the young bankers in attendance during the floor debate and offered them some personal words of encouragement. The day concluded with a tour of the Capitol building.

When we ask young bankers about what they would like the NBA to focus on, we frequently receive requests for regional meetings to offer training and networking. As a result, the NBA will host a handful of regional Networking Lunch & Learns throughout the coming year. These short but focused events will be organized and hosted by members of the Young Bankers of Nebraska (YBON) Committee, with every effort made to keep these programs to less than two hours and costs minimal.

The first of these YBON Lunch & Learns was held in Kearney on April 4 immediately following the Spring Agri-Business Conference. Long-time NTV news anchor Seth Denney served as the featured presenter for this inaugural event. He focused his comments on public image, public relations, and the media. I would encourage you to watch the NBA Update for information about future Lunch & Learns and to send a young banker or two from your organization to these events.

Another important role that our next-generation bankers are providing this spring is serving as judges for the Bank On Nebraska Challenge. As you will recall, the NBA has invited Nebraska high school students to submit 60-second videos showcasing how their local banks have benefitted their families or communities. At the time of this writing, 35 videos from 15 different high schools were submitted for consideration. Special thanks to a statewide task force consisting of several members of YBON and the NBA Leadership Class of 2018 who reviewed, rated, and selected the top five “finalist” videos. The finalists will now be voted on by the public. Winners will be announced at the NBA Annual Convention in May!

Dialogue with our next-generation bankers suggests they are extremely interested in professional training and educational opportunities. As a reminder, the NBA and our partners offer a wide range of scholarships to advanced training programs offered through the KBA/NBA Schools of Banking and the various Graduate Schools of Banking. Don’t overlook the opportunity to invest in your next-generation bankers by supporting their attendance at these programs. Information about the various scholarship opportunities can be found at http://bit.ly/NBA-GSBscholarships.

Finally, we need your help! Successfully connecting with next-generation bankers requires communication from the NBA. While we can accomplish much of this through our social media channels, it is important that the contact information for our state’s young bankers is part of the NBA membership database. As you bring next-generation bankers onto your staff, we encourage you to send their contact information to the NBA. Working collaboratively, with a focus on the future, we can ensure the success of our next-generation bankers and the banking industry in Nebraska.

Email NBA President & CEO Richard J. Baier at richard.baier@nebankers.org.

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Preferred Vendors Address NBA-Member Pain Points

Your NBA marketing and outreach team spent a sizable amount of time over the past year talking with member banks about specific pain points and frustrations within their respective organizations. We received a great deal of input, as you might imagine, about regulation, compliance, information technology, and workforce. A few commonly identified themes and issues during these discussions included managing the cost of employee benefits, providing a secure information technology infrastructure, improving employee performance review processes, filling technical voids left by pending staff retirements, and cybersecurity. With this input in hand, your NBA staff has been revisiting the list of products and service available through both the NBA and our for-profit subsidiary, the Nebraska Bankers Insurance & Services Company (NBISCO).

Employee Benefits

The NBA’s Voluntary Employees Beneficiary Association (VEBA) has offered a suite of employee insurance products to our member institutions since 1974. Currently, more than 4,500 Nebraska bankers are enrolled in VEBA’s self-insured health plan, representing more than 10,800 covered lives. For 2018, the VEBA Board of Trustees approved health insurance rates that included no increase. VEBA’s history reflects an average 5.6 percent annual increase over the past 10 years. Participation in the VEBA dental and vision insurance programs has continued to see strong growth, with more than 3,300 bankers using VEBA dental coverage and 2,600 NBA-member employees taking advantage of vision insurance coverage. Both the dental and vision coverage premium rates are locked in at current rates for the next three years. In addition to reasonably priced, comprehensive coverage, NBA VEBA offers exceptional customer service.

IT Infrastructure

NBISCO recently announced a preferred vendor agreement with Five Nines Technology Group. Five Nines provides outsourced managed IT services, with an emphasis in the health care and banking arenas. With fully staffed offices in Lincoln, Omaha, and Kearney, Five Nines offers virtual CIO services for banks across the state at competitive prices. Five Nine’s services include account management, research and development, an assigned project team including a highly trained primary engineer, support desk services, budget planning and assistance, high-level problem solving, disaster recovery, and business continuity. The IT team at Nebraska-based, independently owned Five Nines stands ready to work with your bank. For new potential customers, Five Nines offers a complimentary network assessment. Let us know if this free assessment is of interest to your institution.

HR & Employee Performance Reviews

After reviewing a plethora of human resources vendors offering “new and improved” employee performance measurement tools, the NBISCO Board recently approved a preferred vendor agreement with ZelleHR, an HR consulting firm based in Lincoln. ZelleHR, like many HR consulting firms, offers a full suite of human resources solutions; however, one of its most relevant products available to NBA members is the 4×2 Performance Review, which is most easily defined as four performance-related questions reviewed twice per year by the manager and the employee. The 4×2 process is simple and forward-focused and can be driven primarily online. I personally talked with several banks and bankers in Nebraska who have implemented the 4×2 process; the feedback from millennials to those approaching retirement has been overwhelmingly positive. A few millennials at our Young Bankers of Nebraska Conference told me they actually enjoyed their semiannual performance reviews. What makes ZelleHR so attractive is not only the company’s tools and technologies, but also the fact that many of the staff are former HR directors at Nebraska financial institutions. NBISCO is pleased to partner with ZelleHR to offer the company’s products and services to NBA-member institutions.

IRA Technical Compliance

Several member institutions offering IRAs shared their concerns about compliance challenges as many long-time staff members responsible for these IRA programs begin to retire. As a result, the NBISCO Board approved Ascensus as a preferred vendor. Ascensus’ vendor agreement with NBISCO allows Ascensus to offer a proven IRA management system focused on innovation and compliant systems. These systems allow participating banks to focus on their core business model.

Cybersecurity

When I ask bankers what keeps them awake at night, one of the responses I frequently receive is cybersecurity risk. Even some of the largest companies in the country have proven they are vulnerable to cyber risks (think Home Depot and Equifax). Over the past two years, NBISCO has aggressively promoted cyber insurance. While these cyber policies cannot keep the bad guys out of your IT systems, the policies are invaluable when your organization must respond to a data breach or cyber threat.

Likewise, NBISCO offers a preferred vendor arrangement with CyberScout, a 15-year-old firm that is a leading force for identity protection, fraud detection, and identity recovery. Several NBA-member institutions now make CyberScout coverage available to their bank customers as a customer benefit.

I recognize your organization may already retain other vendors to address some of these industry pain points. However, as the opportunity arises, I ask that you contact NBISCO about these services and other preferred vendors available to NBA members.

Let me close by offering my personal best wishes for a prosperous and fulfilling 2018.

Email NBA President & CEO Richard J. Baier at richard.baier@nebankers.org.

7 Worthwhile Ways to Use Your Tax Refund

According to the Internal Revenue Service, more than 70 percent of the nation’s taxpayers received a tax refund averaging nearly $3,000 in 2017, and are expected to receive a similar amount this year. As Nebraskans collect their refunds along with additional benefits coming from the Tax Cuts and Jobs Act passed in December, the Nebraska Bankers Association has highlighted seven tips to help consumers make the most out of their money:

  • Save for emergencies.  More than 60 percent of Americans are not prepared for unexpected expenses. You can prepare by opening or adding to a savings account that serves as an “emergency fund.” Ideally, it should hold about three-to-six months of living expenses in case of sudden financial hardships like losing your job or having to replace your car.
  • Pay off debt.  Minimize existing balances either by chipping away at loans with the highest interest rates or eliminating smaller debt first.
  • Save for retirement, your child’s education or future health expenses. Open or increase contributions to a tax-deferred savings plan like a 401(k) or an IRA. Your bank can help set up an IRA, while a 401(k) is employer-sponsored. Look into opening a tax-advantaged 529 education savings plan to ensure school expenses will be covered when your child reaches college age. Or save for future health expenses with tax-free dollars by investing in a Health Savings Account.
  • Pay down your mortgage or student loans.  Make an extra payment on your mortgage or student loans each year to save money on interest while reducing the term of your loans. Be sure to inform your lender that your extra payments should be applied to principal, not interest.
  • Invest safely with U.S. savings bonds or municipal bonds. The U.S. Treasury allows for savings bonds to be purchased using your tax refund for as little as $50. Savings bonds earn interest for a maximum of 30 years.
  • Invest in your current home.  Use your refund to invest in home improvements that will pay you back in the long run by increasing the value of your home.  This can include small, cost-effective upgrades like energy-efficient appliances that will pay off in both the short and long term – and with tax credits (as long as Congress continues to renew the program).
  • Donate to charity.  The benefit is two-fold: Giving to charity will make a difference in your community, and you can also claim the tax deduction, if you itemize.

The NBA also stresses the importance of lower-income workers filing a tax return—even if their income is too low to trigger any federal tax liability—in order to potentially claim the Earned Income Tax Credit (EITC).  Depending on a recipient’s income, marital status and number of children, the EITC can result in a refund of up to $6,318 to help them achieve financial goals.

Email NBA President & CEO Richard J. Baier at richard.baier@nebankers.org.

Engaging Our State in the Bank On Nebraska Challenge

During the NBA’s recently completed strategic planning process, one issue that came to the forefront during almost every focus group, planning discussion, and personal interview was the need to more proactively market Nebraska’s banking industry and the positive impact Nebraska banks have on Nebraska communities, families, and individuals. It also became evident that addressing this task was going to require some nontraditional strategies, especially in reaching out and connecting with the “NExt Generation” of Nebraskans.

With the approval and support of the NBA Board of Directors, your association will publicly launch the Bank On Nebraska Challenge for Nebraska’s high school students on January 15, 2018. This statewide competition will challenge today’s young people to submit short videos recognizing and highlighting the important role Nebraska banks play in their communities, schools, and families. Students will be encouraged to upload their videos between February 19 and March 25.

BankOnNE Site Image

Members of the NBA’s Young Bankers of Nebraska Committee will be tasked with reviewing and scoring the videos. The finalists’ videos will be announced on April 6. Subsequently, the public will be asked to vote for their favorite video online through a customized website, much like they might vote for the winners on American Idol. Students selected as finalists, along with their parent/guardian and teacher, will be invited to the 2018 NBA Annual Convention on Friday, May 4, at which time the winning video will be announced.

To encourage student participation, contest finalists will be awarded a $529 scholarship as well as a MacBook. In addition, the home school of the contest finalists will be provided $529 in unrestricted funds to be used at the direction of the participating teacher for supplies or other classroom needs. The producer of the winning video, as selected by the voting public, will receive an additional $2,000 scholarship. Finally, there will also be a special $1,000 prize for the funniest video, as selected by the YBON Committee members, and 10 randomly selected $100 Visa gift card prizes.

This video contest, as you might be thinking, is clearly outside of the box for the association and our member institutions; however, we know that today’s young people view life through a vastly different prism. The targeted students grew up during the Great Recession, when banks of all sizes were portrayed in a negative light by media sources at every turn. These students also are accustomed to relying on online platforms for their news, information, and entertainment. To help us reach this market and facilitate such a unique process, the NBA has engaged Red Thread, a Lincoln, Neb.-based, marketing firm that specializes in multimedia and fostering connections with today’s teenagers. In addition to coordinating the video contest, NBA staff has also asked this marketing firm to develop some additional materials to showcase the many career opportunities available in the banking field.

To be successful in this effort, the NBA needs help from every member institution. Specifically, we ask that you:

  • Make a personal phone call or send an email to your high school superintendent/principal to promote the video contest. Material will be sent to you in early January.
  • Reach out to the business teachers at area high schools and encourage them to recruit student participants. One NBA Board member suggested that local schools should give extra credit for participation!
  • Openly discuss the video contest at an upcoming service club or chamber of commerce meeting.
  • Proactively discuss the video contest with your bank staff so they can actively discuss and encourage student participation. A few member institutions will be offering local prizes to area students that participate.
  • Include information about the video contest in marketing and promotional pieces that your institution provides to customers (and their children).
  • Actively use your bank’s social media channels to promote the Bank On Nebraska Challenge, the contest website at www.BankOnNE.com, and the Twitter hashtag #BankOnNE.
  • If a student features your bank in one of their videos, feel free to highlight the video on your bank’s website and marketing materials.
  • Obtain a contest poster at an upcoming NBA educational program and display it in your bank.
  • When the finalists are announced in April, encourage your staff, customers, and community members to vote for their favorite video. It would be exciting to see banks and communities support the student finalists with organized voting efforts.
  • Attend the NBA Annual Convention to show your support for the students.

Specific details about this contest as well as contest rules can be found at: www.BankOnNE.com. Should you have any questions about this statewide marketing initiative, please feel free to reach out to me at (402) 474-1555 or richard.baier@nebankers.org.

Email NBA President & CEO Richard J. Baier at richard.baier@nebankers.org.

CFPB Meeting Demonstrates Need for Real-World Education

In late July, I was part of a small group of state bankers association representatives asked to participate in a meeting at the Consumer Financial Protection Bureau (CFPB) related to the Dodd-Frank Act’s pending Section 1071 Small Business Data Collection requirements. Meeting participants included association representatives from Georgia, Massachusetts, Missouri, Nebraska, New Hampshire, and Oklahoma as well as from the ABA. We were joined at the CFPB’s headquarters by 16 CFPB representatives who are responsible for implementing these regulations.

You will find the NBA’s formal comments to the CFPB’s Request for Information Regarding the Small Business Lending Market (Docket No. CFPB-2017-0011) at http://bit.ly/S1071Ltr. Below are a few personal observations about our meeting and subsequent discussions.

  • The meeting included an active give-and-take dialogue, with many CFPB staff asking good questions and trying to understand how their proposed rules might impact both banks and borrowers. I witnessed several key staff diligently taking notes during the discussions. They seemed eager to learn about our perspective.
  • Like many federal agency and congressional offices in Washington, D.C., the CFPB is largely staffed by young people who are extremely bright but lack a certain level of real-world business experience and understanding. Although Grady Hedgespeth, the individual leading the project to implement Section 1071, has banking and government (SBA) experience, only a small number of meeting participants had any true banking knowledge, or had ever made a loan. One staff member told me after the meeting that his primary banking knowledge was the result of obtaining a car loan at a credit union and using his debit card.
  • It is challenging for agency representatives to develop simple regulations and programs that meet both congressional intent and statutory language. Several of the CFPB staff expressed their concerns about and commitment to complying with the federal statutes as handed down by Congress.
  • Certain CFPB staff members lacked a thorough understanding of the complexities of our banking system, especially as it relates to commercial lending. Several staff, for example, suggested that every bank in the country has a standardized, one-page application for small business lending. Similarly, many were surprised that discretion in the small business lending space is driven by an enormous amount of business factors, not just a cookie-cutter template. I mentioned the impact, for example, that products like USDA or SBA guarantees can have on the terms of a commercial note.
  • Because of their personal experiences (or lack thereof), many of the young CFPB staff have a difficult time grasping the challenges of rural areas and small banks. I shared with them that Nebraska has 80 banks with less than $100 million in assets. In addition, some of our smallest NBA-member institutions have less than five employees. Therefore, the statutory requirement that loan underwriting be completed by someone other than the participating loan officer will be especially troublesome for smaller institutions. Likewise, the shear geographic area of a state like Nebraska was difficult to comprehend for individuals who may easily drive through two or three states daily on their way to work.
  • A recurring, yet highly inaccurate perception of the CFPB staff was that banks can easily and efficiently adjust their operating plans and software systems to account for these new requirements. Obviously, those of us involved in the banking sector know differently.
  • Finally, as we have witnessed since the Great Recession, some misplaced reservations about the banking sector and our motivations for doing business remain. I am not sure CFPB staff had an appreciation of the fact that we want our customers/borrowers to be successful.

After returning to Nebraska, I spent a great deal of time mulling over the meeting and considering how our industry can proactively address the inherent challenges and assumptions held by some within the bank regulatory community.

First and foremost, we must remain vigilant on the legislative front. As we have learned all too well as a result of Dodd-Frank, regulations designed for larger, more complex financial institutions always seem to flow downhill, impacting every institution in America, regardless of their business model. Secondly, we need to find ways to help better educate young staffers who are starting their careers in Congress or within the regulatory agencies. We routinely host a “Take Your Lawmaker to Work” week, but how often do we spend time educating our young regulators? We must find ways to help them better understand the complexities of our core systems, why a combine costs $300,000 plus, why a bank may not loan the requested amount to a commercial borrower and how this may actually be better for the borrower’s business, how a bank can successfully operate with four staff members, or that our rural branch locations can operate efficiently even though they are 200 miles apart.

Finally, the banking industry must seek new opportunities to actively educate and engage the next generation about our industry. We need to think about our industry’s marketing efforts and find new communication strategies that will resonate with Generations X, Y, and Z. Banks are not only the credit engine of our economy, but also a fundamental component of every life-changing event we experience—from purchasing our first car or home and saving for college to financing a new business and ensuring our dollars are safe from hackers and crackers. Our next generation—whether they are working as a manufacturer in David City, a rancher in Mullen, or a bank regulator in Washington, D.C.—must understand that Nebraska banks are their partners in success and that they can “Bank On Nebraska” financial institutions for financing their future.

Email NBA President & CEO Richard J. Baier at richard.baier@nebankers.org.

Seven Tips for Avoiding Online Fraud

The weather turns colder and the days grow shorter during this spooky time of year, but it’s not the ghosts and ghouls you should fear. The real danger arises from the hackers, crackers, and cyber punks who want to get past your firewall and gain access to your personal information. That’s why the Nebraska Bankers Association (NBA) is promoting National Cybersecurity Awareness Month this October.

Cyber attacks are becoming more complex and common. According to the FBI’s Internet Crime Complaint Center, in 2016, cyber victims lost $1.3 billion from scams initiated through the web.

CyberAware_DataBreach

The world wide web doesn’t have to be scary. Just follow these tips to help keep your information safe online:

  • Keep your computers and mobile devices up-to-date. Having the latest security software, web browser, and operating system is the best defense against viruses, malware, and other online threats. Turn on automatic updates so you receive the newest fixes as they become available.
  • Create complic@t3d passwords. A strong password is at least eight characters in length and includes a mix of upper and lowercase letters, numbers, and special characters. Follow these guidelines when creating new passwords for better protection.
  • Watch out for phishing scams. Phishing scams use fraudulent emails and websites to trick users into disclosing private account or login information. Do not click on links or open any attachments or pop-up screens from sources you are not familiar with. Forward phishing emails to the Federal Trade Commission (FTC) at spam@uce.gov – as well as to the company, bank, or organization impersonated in the email.
  • Keep personal information personal. Hackers can use social media profiles to figure out your passwords and answer those security questions in password reset tools. Lock down your privacy settings and avoid posting things like birthdays, addresses, your mother’s maiden name, etc. Be wary of requests to connect from people you do not know.
  • Secure your internet connection. Always protect your home wireless network with a password. When connecting to public wi-fi networks, be cautious about what information you are sending over it.
  • Shop safely. Before shopping online, make sure the website uses secure technology. When you are at the checkout screen, verify that the web address begins with https. Also, check to see if a tiny locked padlock symbol appears on the page.
  • Read the site’s privacy policies. Though long and complex, privacy policies tell you how the site protects the personal information it collects. If you don’t see or understand a site’s privacy policy, consider doing business elsewhere.

More information on Cybersecurity Awareness Month and additional tips on monitoring your personal information on the web are available from Stay Safe Online at https://staysafeonline.org/stay-safe-online/. Limit your fears to ghosts this Halloween and stay protected on the web.

Email NBA President & CEO Richard J. Baier at richard.baier@nebankers.org.

NBA Strategic Plan Now Underway

While traveling across Interstate 80 recently, I spent some time reflecting upon the very first, boxy cell phone I owned in roughly 1994. This heavy device offered questionable quality and service, but it was very cool. Clearly, times and technology have changed! Today, our lives are driven by smart phones and new technologies—email, text messaging, calendars, contacts, internet searches, directions, movies, entertainment, etc. No one industry has been impacted more dramatically by changes in technology and resulting consumer preferences than banking and financial services. These rapid technological advances were one factor that led your NBA Board of Directors to embark upon a strategic planning process in late 2016.

At the July meeting, the NBA Board accepted the final strategic planning document and recommendations from Financial Shares Corp. (FSC). The plan was developed following a variety of member surveys; board retreats; member, nonmember, and staff interviews; and a thorough data review.

The plan outlined four primary strategic goals. Within these goals, the plan identified 55-plus strategic action steps. The board and staff analyzed these specific implementation steps and settled on a list of eight to 12 priorities for the coming year. A complete copy of the plan can be found on the NBA website at http://bit.ly/NBAStrategicPlan. Following is listing of the four primary goals along with a sampling of action steps within each category.

Goal #1:  Increase Organizational Efficiency

a. Consolidate accounting functions between the NBA and NBISCO 2017-2018
b. Conduct a thorough financial review of all NBISCO and NBA educational offerings 2017-2018
c. Finalize VEBA online enrollment 2018
d. Evaluate offering NBA/NBISCO/VEBA programs to associate members and preferred vendors 2017-2018
e. Solicit outside experts to review and offer strategies for VEBA to better navigate the changing healthcare marketplace 2017-2018

Goal #2:  Enhance Organizational Effectiveness

a. Develop a formal social media strategy 2017-2018
b. Engage next generation (young) bankers in making school presentations and hosting peer group meetings 2018
c. Craft formal succession plans for key NBA staff and the lobbying team 2017-2018
d. Extend the length of NBA Board member terms 2018
e. Conduct a member dues review to assure consistency in the marketplace 2018-2019

Goal #3:  Improve Advocacy & Industry Promotion

a. Initiate a candidate school for Nebraskans seeking local and state elected office 2018-2019
b. Host a Young Bankers of Nebraska (YBON) day at the Nebraska Capitol 2018
c. Develop targeted marketing/promotional efforts to showcase the importance of Nebraska banks and careers in banking 2017-2019
d. Lead a statewide discussion/strategy about improving financial literacy 2018-2019
e. Increase effectiveness of banking internship programs at all banks and extend internship matchmaking to all higher education institutions 2018-2019

Goal #4:  Pursue Growth in a Disciplined Manner

a. Conduct research/survey member institutions about specific business needs to support new preferred vendors and services 2017-2019
b. Meet with large-member institutions to discuss collaboration on education and training opportunities 2017-2018
c. Continually evaluate products and services that assist members with the talent recruitment and development process 2017-2019
d. Help growing member institutions meet CRA-related requirements (i.e., SBIC, financial literacy) 2018-2019
e. Identify specific product offerings to expand to partnerships with other state bankers associations 2019

While this list is not a comprehensive recount of the specific tactics outlined by FSC, it offers you a flavor of the functions that the board, staff, and various volunteers will focus their time and talents in the coming years. In cooperation with staff members, we have already initiated plans to address the more short-term strategies contained in the plan.

The goal in undertaking this planning process was to assure a sustainable and successful trade association that meets the needs of our extraordinary member banks and also helps to grow the banking industry in Nebraska. If you have questions about the strategic plan or wish to discuss the implementation strategy, please feel free to reach out to me directly.

Email Richard Baier at richard.baier@nebankers.org.