Written from the perspective of Patrick Cooney, Search Consultant – Banking and Fintech Search at Travillian
As we are heading into a new season of college and NFL football (to the delight of millions), parallels can be derived from the investments made to rosters across community banks and the gridiron. The common theme shining clear is this: Offense is on the rise. For fantasy football GMs and bank hiring managers alike, that is good news for all parties involved.
A recent CFO candidate I spoke with used the offense vs. defense analogy himself to articulate a message I was sharing about trends I’ve observed as an executive bank recruiter. It couldn’t have fit the theme any better. And as I receive more and more ESPN notifications on my phone, building toward the football season openers, I can’t help but appreciate the correlations—as both a football fan and community bank enthusiast.
Setting the Playing Field
Almost two years from today—in November 2022—an industry-leading crypto company dominated the headlines for all the wrong reasons. We saw the downfall of FTX play out in real-time, from poorly sketched court portraits to the salacious relationship drama. Just a few short months later, Silicon Valley Bank, a superregional bank with assets over $200 billion was headed toward failure due to a run on deposits triggered by a lack of adequate risk and treasury oversight.
As a bank recruiter, I braced myself for the fallout from the collapse of two major names in technology and finance. My initial concern was that banks might halt all hiring, and indeed, that scenario came to pass. Many talented professionals at these institutions and their affiliates found themselves displaced, largely through no fault of their own. They had placed their trust in leadership and risk management processes, only to face unemployment in an already challenging post-COVID economy. Despite my expectation of a hiring freeze across the board, the reality for many banking clients was quite different. Instead, there was a surge in defensive search projects—emphasizing the need for robust measures to safeguard the regulatory health and stability of financial institutions.
Risk is the Name of the Game
March of 2023 began the early stages of my Governance, Risk, and Compliance (GRC) focus in bank recruiting. Before that, we saw a relatively healthy blend of search projects across our bank-client spectrum; the production-based, revenue generation, and strategic finance-based functions, and the general oversight functions of compliance, risk, and information security. After March, the offensive focus virtually disappeared overnight. My team and I became saturated with GRC-based search projects from our bank customers.
While it’s unfortunate that a collapse of grand magnitude had to set off this chain, it was at least comforting to see an invested and headfirst approach to better balancing the offensive vs. defensive talent functions, especially in community banks that were just getting warmed up to exploring BaaS banking and working with fintechs.
In came the retained search orders for Chief Risk Officers, Chief Compliance Officers, Chief Information Security Officers, as well as BSA officers, and a multitude of others, all in the same vein. We had to up our game and deepen our understanding of the risk realm while quickly building a network of top-tier GRC talent for many of our bank clients, and we did so with tenacity.
Hiring didn’t freeze. It just changed. And though taking your lumps is never an enjoyable experience, it is sometimes necessary to learn and to grow from the most difficult scenarios, and this was one of them.
Banks rose to the occasion and budgeted for these critical roles. A large volume of GRC-based banking talent also – somewhat suddenly – emerged in high demand and with more stake at the bargaining table. There was an undeniable race to attract and onboard the best risk and compliance talent in financial services. Some came from regulatory or legal backgrounds, but many developed from the early stages of Bank Secrecy Act (BSA) and compliance focus in banking. And those candidates did very well over the next 12 months.
The Pendulum Swings Back
Though we are only halfway through 2024, there has been a clear shift in the trends our group has seen in executive search projects nationwide across our bank customer base. And that has been investing in the offense, namely
- Production-based roles (consumer and commercial lenders)
- Revenue-generating functions (deposit and treasury management)
- Executive leaders (C-Suite roles)
- Financial strategists (treasury, ALM, liquidity and capital management)
- Technology bridge builders (project managers, innovation teams, RPA and API-focus)
Banks took their medicine and lumps over this difficult timeframe, and investors took their losses. But there was obvious maturation in recognizing that for a bank to grow, it must have the right balance of risk oversight and talent in place to allow that to happen in a healthy and safe manner. Today, we are busy with CFO, CEO, treasury, credit, and lending-based projects. And this is good for business. And for banking. And for the economy and markets in a general sense.
Takeaways
While we are happy to see our search projects trend back to offensively based functions, we must not forget what sparked this shifting scale over the past two years. There have been collapses and fallouts in the past, and there will be collapses and fallouts in the future. Those incidents are inevitable in our ever-changing financial market and consistent incorporation of new technologies and methodologies. And as banking becomes more digitized, more threats and risky scenarios will follow.
As I reflect on the last 2 years, I can’t help but feel optimistic regarding the continued shift in community bank talent trends.
