In October, the National Bankers Association hosted its 96th Annual Conference, bringing together members from all sectors of the financial services community. We welcomed speakers from banks, industry regulators, and government representatives such as OCC Acting Comptroller Michael Hsu, FDIC Chairman Martin Gruenberg, Assistant Treasury Secretary Graham Steele, House Financial Services Committee Ranking Member Maxine Waters, and Senator Mark Warner who serves on the Senate Committee on Banking, Housing & Urban Affairs.
Our goal with this conference and all our other work throughout the year is to advocate for the nation’s Minority Depository Institutions (MDIs) and champion their vital role in eliminating the racial wealth gap. Some of the many ways we support MDIs is by helping them to navigate the ever-evolving landscape within the financial services industry through groundbreaking research, advocacy, trainings, and convenings like the conference. The theme this year was Emerging Trends: The Changing Face of Banking. In this blog, we explore a few of the most pressing topics discussed at the conference, like the future of climate finance, advances in compliance reporting, and the rapid acceleration of digitization. The National Bankers Association is proud to be able to offer opportunities for our members and partners to explore these critical topics, enabling them to make more informed decisions as they look towards the future.
The Future of Climate Finance
Climate change will disrupt every industry. However, financial services are pivotal because of the large-scale investments needed to transition to a low-carbon economy and enable societies to adapt and build resilience. Climate finance will most likely come from public and private sources employing different instruments such as grants and donations, green bonds, equities, debt swaps, guarantees, and concessional loans. These funds will be critical to helping vulnerable communities suffering from the most damaging impacts of climate change.
MDIs already play a crucial role in serving the financial needs of underserved populations who still confront racial and social inequities. But now, these same communities where MDIs are primarily located also face the perilous threat of global warming and a growing need for sustainable finance. To shed light on the current state of minority banks and the urgency of addressing climate change, the National Bankers Association and the National Bankers Association Foundation researched climate-related challenges and their impact on the banking industry and its underserved communities. Our research found that “zip codes with an MDI branch have higher climate risk exposure, especially for heat and wind risk, but also for flood and fire risk” (Source: NBA). That’s why driving dollars into our banks is a crucial first step in equipping often overlooked cities and towns to come out ahead on the other side of this climate crisis.
At our conference, we focused on how banks are leveraging existing portfolios and partners to serve customers better, start new climate programs, and expand business into the future of lending. Dom Mjartan, President & CEO of Optus Bank, moderated the discussion. Another session led by Trenton Allen, CEO of Sustainable Capital Advisors, and Joe Pigg, SVP & Senior Counsel of ESG & Mortgage Finance at ABA, discussed the Greenhouse Gas Reduction Fund—a $27 billion investment to mobilize financing and private capital to address the climate crisis while delivering lower energy costs and economic revitalization to communities historically left behind. They discussed what MDIs can do to maximize their lending impact and how federal programs can help them provide accessible, affordable financing for sustainable energy projects.
Beyond the in-depth discussions at the conference, the National Bankers Association Foundation supports the MDI Sustainable Finance Program, which is dedicated to deploying capital, offering flexible and innovative lending products, and impacting investing opportunities to channel socially responsible investments.
Compliance Reporting & Impact Measuring
MDIs play a vital role in their communities. And while reporting to investors, policymakers, regulators, and the general public about their work is crucial, compliance reporting can be a pain point. Anthony Barr, Research & Impact Director for the National Bankers Association and the Foundation, led a breakout session on this topic. He presented a new tool called EquityEQ to assist with compliance burdens and ensure that MDIs don’t miss out on impact investments due to a lack of data collection and reporting. Anthony also showed how this tool can free up resources by streamlining reporting. EquityEQ is a product jointly developed by the National Bankers Association Foundation and UpMetrics. Drawing on sources like the U.S. Census Bureau, this tool transforms data into impactful insights about the people and places MDIs serve. And the dashboard supports a full range of visualizations, including maps, charts, and text-based widgets that can be downloaded as PDFs to circulate offline. Additionally, Anthony led a panel at the conference on how data and research can advance economic justice.
The State of Digitization
The banking world is undergoing a profound transformation, and one of the biggest disruptors is Artificial Intelligence (AI). AI enables financial organizations to improve the quality of their offerings and customer experiences. In the short term, AI can also handle heavy workflows, reduce costs, and automate repetitive tasks, leaving time for banks to focus on building their long-term digitalization strategy. This fast-paced transition is mainly driven by customers demanding more effortless and transparent access. Therefore, digital transformation is critical for MDIs to survive and remain competitive. Advances can unleash new opportunities and enable MDIs to build long-lasting banking relationships with the next generation of customers who expect services to be at their fingertips. Carlos Nauden, President and CEO of Ponce Bank, led a fireside chat with Fiserv on AI.
In addition, the National Bankers Association Foundation has launched MDI ConnectTech, a partnership with the Alliance for Innovative Regulation and inaugurally funded by the Citi Foundation’s Community Finance Innovation Fund. MDI ConnectTech supports investments in technology and talent to enable MDIs to multiply their lending capacity and increase customer access and affordability to financial products and services. With the support of MDI ConnectTech, MDIs can continue to be a sustainable community resource for financial access, wellness, and generational wealth-building.
Summary
The topics that we explored throughout our conference will be ongoing subjects of interest for some time to come and we will be providing additional outlets for our members and partners to continue the discussion. Finally, we want to again thank our attendees, partners, and sponsors. We could not have made this conference successful without your support. For those of you who were not able to make it, we hope to see you next year! In the meantime, we have created a highlights page to provide easy access to information discussed during the conference as well as information about our organization throughout our website.
To read other National Bankers Association blogs, click here.