Charles Potts With Independent Community Bankers of America®

Intro: [00:00:04] Broadcasting live from the Business RadioX studios in Atlanta, Georgia. It’s time for Atlanta Business Radio. Brought to you by On pay. Atlanta’s new standard in payroll. Now, here’s your host.

Lee Kantor: [00:00:25] Lee Kantor here, another episode of Atlanta Business Radio, and this is going to be a good one. But before we get started, it’s important to recognize our sponsor, Onpay. Without them, we couldn’t be sharing these important stories. Today on Atlanta Business Radio, we have Charles Potts, EVP and Chief Innovation Officer with the Independent Community Bankers of America. Welcome.

Charles Potts: [00:00:47] Thank you. Lee. Thanks for having me today.

Lee Kantor: [00:00:50] Well, before we get too far into things, can you tell us about Icba? How you serving folks?

Charles Potts: [00:00:56] Yeah. So Icba Independent Community Bankers is the national trade association, um, and advocacy organizations solely focused on community banks. Um, our primary mission based around that advocacy. So, as you can imagine, given our, you know, nearly 95 years of history, we spend a lot of time lobbying on Capitol Hill, based in DC. Our legislative outreach and regulatory engagement is is a key part of our history. We’ve also built an education arm that does hundreds of training courses every year, with thousands of bankers keeping them up to speed on all the regulatory matters, all the compliance, polishing their skills and certification from marketing to risk management to lending. And then the third part of our organization, the third pillar is really our innovation arm. And and I have the pleasure of, of running an important part of our innovation initiatives where where we really look to find ways to help our community banks continue to to flourish and have the kinds of tools and services and innovative approaches they need to better serve their customers and communities.

Lee Kantor: [00:02:13] Now, for the layperson who maybe doesn’t know the difference between a bank and a community bank, can you explain? Like how does a I call them a stadium bank? A bank that would appear on a stadium be different than a community bank?

Charles Potts: [00:02:29] Well, uh, look, let me let me just say that community banks, the, you know, the the thousands of them around the United States have been here for hundreds of years and are really deeply entrenched in their local communities. Um, these have a, a very local community presence. A lot of the deposits that they gather are, are, are loaned back into these communities. Community banks are where almost two thirds of all small business lending takes place. Over 80% of agricultural lending comes out of community banks. Um, they tend to be in the in the more, um, uh, you know, uh, rural, um, uh, suburban areas, uh, where there is, you know, a strong community presence and a strong demand for the kinds of personalized, uh, products and services that, uh, that these bankers, uh, can provide. Um, you you, uh, you would be, um, amazed to see the economic development engine that is, uh, that is really driven by community banks around the country. Have you think back to the PGP program? Um, an overwhelming majority of small businesses were served by community banks. I think the numbers are, you know, they they, um, they did more, more loans, um, in general, uh, to small business America. And that is, uh, that is where they play now.

Lee Kantor: [00:03:59] Is their target primarily the small business owner? Is it the people that live in the community, like, who is an ideal customer for a community bank?

Charles Potts: [00:04:08] Well, oftentimes that is that is one and the same. So if you think about the small business owner and then their employees, they are all a part of that community. And so the, the community bank, uh, is there to, to really meet the needs, um, of, of all of those, um, all of those constituencies in that community. So it’s not only the commercial lending to the business, um, the, the business loans itself, but it’s then servicing the, the individuals as consumers with their own retail banking needs as well.

Lee Kantor: [00:04:40] Now, when you talk about those retail banking needs, is a customer going to get kind of a similar experience in terms of all the amenities that are out there in terms of an app, and I can make deposits easy. I don’t have to physically go into the bank. Am I getting all of those things? And I’m just that.

Charles Potts: [00:05:00] Is that Lee is exactly why we have this innovation arm, and that is to ensure that we have solution providers out there who are able to deliver those kinds of products and technology needs to the community banks to ensure that their customers, whether it’s a consumer or a small business or a commercial, um, enterprise, have at. Their disposal the same capabilities as any large international global bank or fintech provider. And and we believe in this day and time and it really is fundamental to the work that we do. Uh, we believe we know we have seen in action that those solutions exist. And, and community banks are able to, to deliver, uh, similar services from a technology standpoint. And then the huge differentiator is really the personal relationship. We like to call it high tech meets high touch. Um, because, you know, frankly, you’re going to, you know, if you’re in a if you’re in a local community, you’re going to know who runs, owns and operates that bank. And so you not only have the advantage of the modern technology, but you have the force multiplier of of actually knowing who you’re banking with.

Lee Kantor: [00:06:18] And then for a small business owner, having that kind of personal relationship with a banker could make or break that business where I don’t. I think a lot of, uh, small business owners, I don’t think they’re appreciating the importance of that type of a relationship where the person knows who you are as opposed to you’re just a line on a spreadsheet in some of these mega banks.

Charles Potts: [00:06:42] Well, look again, the the numbers. The numbers don’t lie from from PGP, the heroic work that community banks did all over this country. Um, still should be applauded by everybody. And the the soundbite I heard from, uh, from a number of business owners, uh, some are close personal friends of mine, and, uh, and I was one of them, uh, in a previous life as well, an entrepreneur who built my own businesses. The the thing that that stood out was this quote, I learned that I needed to do it. I learned that I needed to be doing business with a banker, not just a bank.

Lee Kantor: [00:07:27] Yeah, that’s a big difference differentiator. Yeah, I just don’t think people understand the level of I don’t even want to call it customer service. It’s a level of relationship that you can have.

Charles Potts: [00:07:42] These these bankers, these banks are the centerpiece of many of these communities. And so all, all of all of these people in these communities, they’re their kids are going to school together. They’re at Friday night football games. They’re going to the PTA and the rotary. Uh, they’re seeing people, you know, on Sunday or Saturdays at their their places of worship. Um, they’re buying and shopping from one another. I mean, they, they, they are personally connected at a, at a very deep level. And, and that is a very empowering thing, uh, when you’re, when you’re considering your financial service needs and knowing where your money’s going, who’s taking care of it and, and how it’s being used to strengthen that community.

Lee Kantor: [00:08:36] So what is kind of the health of the industry? Is it something that is growing? Is it you hear a lot about consolidation in banking, like what is kind of the the landscape for the community banks?

Charles Potts: [00:08:51] You look into those numbers, the the the the trends are still showing a very healthy, strong and resilient community bank marketplace. And where some of the quote unquote consolidation is happening tends to be, um, at your larger regional, super regional banks out there, um, in general. But it is, uh, it is a very healthy industry. There are there are some 4500 community banks plus or minus out there. And um, and that is, uh, that is still a very, uh, very strong and resilient, uh, reflection of the strength of our small business economy and where job growth, uh, you know, really takes place. And you know this as well, given what you do. I mean, small business America is the economic engine that creates jobs, and community banks are the ones fueling that growth with Small Business America.

Lee Kantor: [00:09:50] Now as part of your role in the association? Maybe not yours individually, but the association as a whole is sharing best practices among the bankers so they can quickly iterate and learn from what’s happening. Well, elsewhere.

Charles Potts: [00:10:05] Yeah, yeah. And, you know, kind of going back, if you think about the three pillars of our organization advocacy, which is the core, you know, kind of lobbying stuff. But between education and innovation, we spend a lot of time we have a lot of our activities oriented to really help educate, coach, mentor, nurture, um, our bankers in best practices, whether it’s purely educational in terms of lending and compliance, um, or marketing, um, or even, um, uh, running, uh, the bank directors, um, uh, education as well. Or on the innovation side, how how digital transformation works, how this journey takes place. Um, the best way to handle, uh, third party risk management and vendor due diligence. We we have a lot of our focus around making sure that we elevate, um, the game, if you will elevate the, the experiences and knowledge and expertise of all of our bankers.

Lee Kantor: [00:11:12] Now, what advice would you give an entrepreneur to, um, take advantage and build a better relationship with their community banker?

Charles Potts: [00:11:21] The the the number one thing for an entrepreneur when dealing with a community bank is to, um, listen. Ask good questions and listen. Uh, you’re going to find community bankers will give you time. They will give you their insights. They will give you their experiences and knowledge. Um, to help your business, help your product, solution, service, whatever it may be. Uh, be better. And and the discovery side of of entrepreneurism and innovation of of of starting, uh, you know, a new business, um, is critically important. You got to go out there and talk to bankers, you got to ask them questions, and you got to be a really good listener because they will tell you. They will tell you what they need. They will tell you what their problems and issues and concerns are. Uh, they will tell you how products and services need to work properly, um, to work inside the framework of the typical community bank. Uh, they will tell you exactly how things need to work in order to satisfy the kind of small business operation that is typically a community bank.

Lee Kantor: [00:12:33] Now, what’s on your roadmap in terms of innovation for the community banks? Um, or is there any emerging technologies that we should be aware of?

Charles Potts: [00:12:41] Well, um, I, I would say that, um, our innovation initiatives and the programs that we, we run, um, the, the crown jewel of which is, is something we call the Icba think Tech accelerator are designed to help find solutions, solution companies, really early stage companies that are addressing very specific problems to your question. And, and our bankers, um, really drive that process for us. They help inform us of what are those concerns. And, and look, cybersecurity continues to be at the top of that list. It’s it it only gets bigger and more complex. Um, and it is a it is a constant investment that banks are making, uh, to address those needs. Um, risk and compliance management in general is always top of mind with bankers and uh, irrespective of what’s going on, either technologically or economically, uh, those are very important practices that banks are looking to always, um, uh, always improve upon, uh, make more efficient and more effective. And, uh, and right now, uh, I have to say laughingly, in the year 2024, who thought check fraud would be a a hot topic again? But here it is. We’re seeing a resurgence of check fraud. And, uh, and so the banks are paying very much, uh, close attention to it and looking to find new solutions to help, you know, mitigate some of the risks associated with with that and, and address, um, this, uh, this growing volume and then in general and we try to, we try to avoid, you know, dragging a bunch of shiny objects in front of the bankers.

Charles Potts: [00:14:39] We tend to focus more on, on very, uh, targeted solutions to very targeted problems. But the whole field of artificial intelligence in general, um, has a lot of promise in terms of the types of tools that are that are in that bucket of things that we call artificial intelligence, um, that can actually help with a number of things we talked about, whether it’s risk and compliance, whether it’s check fraud or it’s how do I make my bank more efficient? How do I how do I automate more of those redundant, repetitive, labor intensive tasks to make my people more efficient and effective and more valuable in what they’re doing? Those are the things that are very much top of mind. Uh, probably laying over the top of, of this subject, um, is really the data and analytics side of, of, of, uh, of banking and, and how do I, how do I, um, um, acquire, access, manage, manipulate, um, and then analyze and and deploy, um, sound and prudent, um, uh, activities with the data I have available to me. How do I make my bank better? How do I provide better services to my customers leveraging data and analytics? Um, and and things such as, uh, again, fraud, uh, detection and risk and compliance management.

Lee Kantor: [00:16:19] Now, is there any strategies or tips you can share, uh, for the community bankers right now in order for them to be successful in growing, um, in today’s digital landscape?

Charles Potts: [00:16:31] Yeah. Look, we we spend a lot of time, um, with this topic and talking to bankers on a national level or grassroots through some of our state association partners, um, or through our educational webinars and so forth. And, and really, the, the the short answer is get started. There are a wealth of resources that we’ve made available inside Icba that help the banks start to navigate, um, this landscape wherever they’re at on that journey. We have some very, uh, sharp, very progressive banks. At one end of the spectrum, we have a lot of banks that are still, um, you know, still following and learning and dipping their toe into the water, so to speak. And we try to make available to them a continuum of, of resources to help them on this journey. Um, come participate in our Icba think Tech accelerator programs. Um, this is a way for them to see the way these companies think and work and how they are working to solve problems that that community banks have. And then. You know, and then work through your state association and the innovation initiatives that that they’re offering. And taking on this ecosystem that we’re continuing to foster is very collaborative in nature. And so we know that there are a wealth of resources that can help banks of all shapes and sizes really navigate what oftentimes can be a daunting landscape.

Lee Kantor: [00:18:09] Now, where can people go if they want to learn more about Icba or your innovation efforts, uh, connect with you or connect with the association?

Charles Potts: [00:18:19] Yep. Start on our website icba. Org forward slash innovation that’ll give you access to all of our programs, all of our resources. It’ll help you get started on how to find us, um, how to find our calendar of activities and events that are going on. Uh, we’re getting ready here in, uh, in a few weeks to launch our seventh accelerator program. Uh, which is very exciting. We’ve got another cohort of six companies that we will be taking through our ten week program. Um, and, and banks can participate in this program, and they can find a way to sign up through our, our website. And we’d love for them to come, uh, come see what we’re doing, see what these companies are doing, and, frankly, give us the the feedback and guidance that we know is critically important to make sure we’re addressing their needs.

Lee Kantor: [00:19:14] Well, Charles, thank you so much for sharing your story today. You’re doing such important work and we appreciate you.

Charles Potts: [00:19:19] Lee, I appreciate the time to talk to your audience and and thank you for doing this.

Lee Kantor: [00:19:24] All right. This is Lee Kantor. We’ll see you all next time on Atlanta Business Radio.