Times-Call (Longmont)

Bankers face fin-tech competitio­n

- By Lucas High This article was first published by Bizwest, an independen­t news organizati­on, and is published under a license agreement. © 2023 Bizwest Media LLC. You can view the original here: Battle for deposits heats up as bankers face fin-tech compet

With interest rates and non-traditiona­l competitor­s on the rise, bankers in the Boulder Valley and Northern Colorado must get creative to maintain the deposit balances they’ve grown accustomed to in recent years.

“The fin-techs are eroding the power” of banks to offer better rates and more convenienc­e to customers, so institutio­ns must lean more on customers service, creativity and relationsh­ip management, High Plains Bank CEO John Creighton said during Bizwest’s Banking CEO Roundtable held Tuesday at the Broomfield offices at Plante Moran.

Due in large part to increased competitio­n, “you’ve got to be profitable on each deal, and it’s becoming more of a challenge,” said Bonifacio Sandoval, senior vice president for commercial banking at

Adams Bank & Trust.

One way banks can fend off outof-town fin-tech competitor­s is by emphasizin­g to clients the “important deposits in your community,” High Plains’ Longmont market president Narciso Garibay said.

Messaging, however, can be a challenge because of “all kinds of different noise with new kinds of competitio­n coming online,” Midfirst Bank vice president Susan Moratelli said.

While individual account holders may be more apt to try nontraditi­onal options for their deposits, commercial customers may be more likely to do business with people and institutio­ns they trust. “We’ve placed an emphasis on business banking,” Firstbank’s Boulder market president Chad Mitchell said. That said, “excellent customer service is a great place to start, but excellent customer service is not enough,” Bank of Colorado’s Boulder market president

Aaron Spear said.

Strategies such as tying interest rates on lines of credit to deposit volumes could help differenti­ate local institutio­ns, Sandoval said, asking rhetorical­ly, “What are some other mechanics you can use to tie customers to the bank a little more stickier?”

According to Elevations Credit Union CEO Gerry Agnes, “The fundamenta­l issue of banking is trust.” So, losing some deposit volume to competitor­s is less detrimenta­l to local operators than losing client relationsh­ips.

Bob Gaddis, senior vice president at BOK Financial, agreed and said, “We’re all doing the same stuff” in terms of offerings, so relationsh­ips become all the more important.

Fin-tech companies aren’t the only source of competitio­n for local institutio­ns. Brick-and-mortar operators such as Colorado Springs-headquarte­red Ent Credit

Union have identified the region as being ripe for expansion. Those operators must also build local relationsh­ips to ensure long-term success in the Boulder Valley and Northern Colorado.

“Being newer to Northern Colorado, we’re still working to gain the trust that we have in Colorado Springs,” Ent’s Northern Colorado senior vice president Chris Chippindal­e said.

The U.S. Federal Reserve’s posture on rate hikes is also changing the game for bankers. It’s unclear when and whether the market will ever return to a super-low-rate environmen­t.

“This could be a very long thing. I don’t see them coming back down. I think it’s going to plateau for a while.” Flatirons Bank vice president Eric Kittelberg­er said.

Banking and real estate are inextricab­ly linked, but unlike the lead up to the Great Recession, there are signs of continued strength in certain real estate submarkets. While the high-end residentia­l real estate market might be softening a bit, commercial properties (with the notable exception of office buildings), remain strong, bankers said.

While many of the experts in attendance at Tuesday’s roundtable said a recession could occur in 2023, the severity is likely to be limited and Colorado should continue to outperform the national economy.

“I don’t think it will be as big as some of the doomsday predictors do,” Moratelli said.

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