Transcript
Hey everybody. Welcome back to another episode of What’s Going On in Banking. I’m Ron Shevlin, chief research officer at Cornerstone Advisors, and of course I’m here with my co-host, Stacey Bryant.
Ms. B, how are you doing?
Other than getting hammered by these Northeastern allergies, I’m doing fan-flipping-tastic. I’m ready to rock and roll. We have a lot to talk about today.
How are you doing? You were in Viva Las Vegas. What was going on there?
It was a whirlwind week.
I flew from Boston to Las Vegas on Sunday. On Monday, I had the honor of opening the Financial Brand Forum with Jim Marous.
Tuesday morning, I flew to San Diego to present at Alkami’s Co:lab, then got back on a plane to Las Vegas.
The next morning, I did a breakout session with Nymbus and Michigan State University Federal Credit Union’s Amy Eisenshouser about managing multiple brands.
Then I flew to Sonoma for a bank board meeting in Healdsburg, California, before heading back down to San Diego so I could finally fly home to Boston.
I am very happy to be back.
I know you are, but I also know you enjoy racking up all those miles.
Before we get into banking, I have one important question. You and I are foodies. What was the best thing you ate on that trip?
We had a couple of very good dinners in Las Vegas. One was at Blossom at Aria, and another was at Carbone, also at Aria.
But one of the highlights was dinner before the bank board meeting in Healdsburg at a restaurant called Matheson.
They had this incredible wine wall with about 80 different wines in machines controlled by a smart card. You could choose a full glass, a half glass, or a small taste.
I’m not usually going to spend $1,000 on a bottle of Opus One Cabernet, but I was happy to use the card the bank gave us to spend about $40 on a taste.
It was worth it. It was amazing.
Ron, how bored were you at dinner that you counted all 80 bottles?
Don’t answer that.
Before we get into the main topics, I need to correct something from our last episode.
I mentioned the new What’s Going On in Banking tumblers that we’re giving to the people behind our favorite social-media posts each month.
But I completely forgot to give credit to the artist who designed the updated logo.
She is an up-and-coming artist named Mila Bryant, and I believe she’s about 12 or 14 years old.
I think you know her pretty well.
I do. I get the honor of being Mila Bryant’s mom, and she is actually 10.
When she designed the refreshed What’s Going On in Banking logo and then saw it printed on the tumblers, I thought she was going to get emotional like I did.
Instead, she looked at it and said, “All right. Let me know when they need another logo.”
I thought, okay, gangster.
I love that.
Please let her know I wanted to make sure she got the credit.
And for everybody listening, we really do want to hear your strongest ideas about the future of banking.
We spend a lot of time traveling around the country talking with bankers, credit unions, fintechs, and technology providers. But we want to hear from everybody else too.
So if you post something on LinkedIn, Substack, or somewhere else that you think is thoughtful, provocative, witty, or useful, tag us.
Once a month, we’ll pick a post that stood out, and the winner gets a tumbler with Mila’s artwork on it.
Whatever keeps you awake and snarky, coffee, tea, whatever, you can drink it out of the mug.
All right. We’ve gotten through the niceties. Let’s get into the meat of the episode.
Last week was the 11th Financial Brand Forum.
I’ve been to nine of them, and this year I finally had the chance to open the main conference with Jim Marous instead of only doing a breakout session.
What makes that event stand out to me is the production quality and the focus on the attendee experience.
The organizers are not simply trying to fill exhibitor booths. They care a lot about the quality of the audience, the content, and the overall experience.
They also have a strict rule against selling from the stage. If you turn your presentation into a sales pitch, you probably will not be invited back.
Over the years, they’ve also brought in major outside speakers and celebrities.
I remember somebody telling me recently, “The last time I saw you at Financial Brand Forum, I skipped Cindy Crawford to see your session.”
My first reaction was, “What the hell is wrong with you?”
I would have considered skipping my own presentation to see Cindy Crawford.
But the event has consistently raised the bar, particularly because banking-marketing conferences used to be much more tactical. Financial Brand Forum pushed the conversation more toward strategy and broader industry change.
This year, Jim and I did something we call Pardon the Fin-terruption, which is loosely inspired by ESPN’s Pardon the Interruption.
We go through a series of topics and react to them quickly.
I thought it would be useful to revisit a few of those topics with you and get your take.
The first was the branch reckoning.
The question was: are branches still strategic assets, or are they becoming expensive liabilities?
You know I do not usually pull punches, so this created a genuine dilemma for me.
Left entirely to my own devices, I might have gone on stage and said, “You would be crazy to spend another dollar opening branches when you have so many digital, data, and AI capabilities that still need investment.”
But several major sponsors of the conference are branch-design and construction firms.
The night before the conference, I was at dinner with some Cornerstone colleagues, and the CEO of one of those branch-design companies was sitting nearby.
I told her honestly that I had a dilemma.
If I were in her position and heard the opening speaker tell the audience not to invest another dollar in branches, I would walk straight to the conference organizer and ask why he had paid someone to undermine the services I sell.
So I tried to be more nuanced.
The real question is not whether branches are dead or alive.
The question is what your strategy is, what you are selling, and who you are selling it to.
For some customer segments and products, physical presence is still important.
If you are building wealth-management relationships or serving certain small-business customers, face-to-face interaction may still be valuable enough to justify additional investment.
But for many banks and credit unions, resource allocation is becoming much harder.
Digital transformation, data, AI, new payment rails, cybersecurity, and new customer expectations are all demanding capital.
You cannot continue allocating smaller and smaller amounts to a growing list of priorities without eventually making difficult choices.
That is where I landed.
What’s your take?
I think a lot of institutions are heading toward a rude awakening.
And I keep coming back to something you said in your presentation: the banks that close the gap fastest will be the ones making clear-eyed resource-allocation decisions, not necessarily the ones with the most locations.
That phrase stuck with me.
A budget cycle should be a capital-allocation exercise, not a nostalgia exercise.
Every budget is a confession. It tells you what the institution really believes because beliefs finally have numbers attached to them.
If the organization says digital matters but continues pouring capital into underperforming branches, the budget tells you the truth.
If the bank says customer experience matters but keeps renewing outdated vendor contracts that prevent better onboarding, the budget tells you the truth.
I think institutions need to make a literal hit list.
Which branches are we willing to consolidate or close?
Which vendor contracts should not be renewed?
Which processes should a human never have to perform manually again?
You cannot fund the future without making room by retiring parts of the past.
Fintech companies never had to sunset branches because they never built them.
Traditional institutions have to make the harder choice.
And customers have already voted with their behavior.
They deposit checks at midnight. They manage cards from the couch. They shop for loans during lunch.
If the only reason somebody needs to visit a branch is to sign a document, the institution is acting more like a notary than a relationship bank.
So follow the customer, not the carpet.
The institution should track whether dollars are moving from occupancy and legacy technology into data, digital experience, and talent.
And it should measure what happens when those dollars move.
What is the cost to acquire a new customer before and after the change?
How long does it take to launch a new product?
How much faster is onboarding?
If the metrics do not move, you did not make a strategic resource-allocation decision. You just rearranged furniture in a doomed sitcom.
“Budgets are confessions” is a great line.
We are going to come back to that in a future episode because Cornerstone is publishing a report called The Marketing ROI Gap.
One of the findings is that many CMOs say their budgets are still based largely on historical precedent, not on bottom-up ROI analysis.
And one of the biggest reasons budgets shift from year to year is simply that a senior executive decides they want something different.
That is exactly the kind of allocation problem you’re describing.
Let’s move to the second topic Jim and I discussed: the deposit wars.
Jim approached it partly through the lens of generational wealth transfer.
I’m less convinced that is the immediate center of the deposit fight.
Whenever I hear about generational wealth transfer, I think of something my mother, who is about to turn 90, has always told me.
She says, “Ronald, I just want you to know that when I go, I’m taking all the money with me. So you and your brother do not need to worry about it.”
She is the only person on the planet allowed to call me Ronald.
My take is that the deposit war has two fronts.
The first is already active: fintechs.
We’ve been tracking new checking-account and payment-account openings for years.
In the 2025 full-year data, fintechs increased their share of new accounts from about 49% to 56%.
I know bankers will push back and say, “But what percentage of deposits do those accounts represent?”
That misses part of the point.
The overwhelming majority of new accounts are being opened by younger consumers, and younger consumers do not yet have the same balances as older households.
The fight is for the relationship before the balance grows.
The payment activity matters too because it drives interchange revenue, creates transaction data, and opens up future lending opportunities.
And yes, I include companies such as PayPal and Venmo when I talk about payment accounts.
Some bankers will call that cheating.
But consumers under 30 do not care about our old product-category definitions.
Checking account, payment account, money account, investment account, those distinctions are much less meaningful to them.
What matters is where they keep money, spend it, move it, and increasingly invest it.
The response cannot simply be raising deposit rates.
Banks need better products.
The second front is just beginning: crypto and stablecoins.
Depending on how regulation evolves, stablecoin and digital-asset products may eventually offer yields in the 6% to 7% range.
That could attract significant balances, particularly from younger consumers.
And this is not only a retail issue.
Commercial payments may increasingly move through stablecoin rails.
If businesses can move money on and off a bank balance sheet almost instantly, banks face a very different liquidity, pricing, and balance-sheet-management problem.
Which leads to a broader conclusion: I’m not sure “core deposits” remains a useful concept.
The traditional idea is that a certain portion of deposits is sticky and unlikely to move.
In a world of fintechs, instant transfers, and stablecoins, more of that money is contestable.
What’s your take?
Here is the part nobody wants to say out loud.
This is not a hostile takeover. It is a slow bleed.
Customers do not necessarily leave the institution. They gradually stop inviting it to the important parts of their financial lives.
First they open a “just in case” fintech account because the experience is better, the APY is higher, or the card looks cool.
The bank still reports that customer growth is healthy because the original account remains open.
Meanwhile, the secondary account quietly becomes the primary heartbeat of the customer’s financial life.
By the time the shift becomes obvious in the bank’s internal data, the relationship may have been eroding for months.
The bank is like an ex scrolling through Instagram saying, “We’re just on a break,” while the customer is sending direct deposit somewhere else and earning rewards somewhere else.
And fintechs are not only gathering balances. They’re gathering intelligence.
Transaction data, spending patterns, savings behavior, and other signals help them underwrite, cross-sell, and shape future behavior.
So the customer may not have ghosted the bank, but the data did.
That creates a much bigger distinction between account ownership and relationship ownership.
If the paycheck lands somewhere else, the savings earn yield somewhere else, and the customer manages goals somewhere else, what exactly does the original bank still see?
Maybe a checking balance that is a little lower than last month.
Maybe a loan customer whose utilization is declining.
Maybe a direct debit that makes the institution feel better because the account technically remains active.
But whoever sees the full picture can recommend the next product, influence the next behavior, and capture the next dollar of margin.
When a bank says, “We have had this customer for 20 years,” sometimes what it really means is, “We have had their routing number for 20 years.”
The attention and financial context may have moved away years ago.
I think the institution needs to stop insisting on being the only place a customer holds money and start fighting to become the orchestrator of the customer’s entire financial life, even when some of the money sits elsewhere.
Stop obsessing only about deposit primacy. Start thinking about data primacy and context primacy.
We need a whole future episode on primacy because those are important distinctions.
We have time for one more topic. Let’s save agentic AI because we talk about AI constantly.
Actually, this next topic ends up involving AI anyway.
Jim and I talked about personalization.
He called it a “personal foul,” which was a good way to describe the industry’s history with the concept.
Banks have talked about personalization for years, and it rarely seems to become very personal.
Cornerstone published a report on personalization before the pandemic.
My conclusion was that personalization is not simply an offer or a message.
Personalization is the ability to have a meaningful conversation with someone.
That implies either knowing enough about the person before the conversation begins or learning enough during the interaction to respond intelligently.
Back in 2019, I argued that the technology was not really mature enough to do that at scale.
Six or seven years later, generative AI and eventually agentic AI change the equation.
I spend a ridiculous amount of time with Claude.
It is not exactly an assistant or collaborator. It is more like a sounding board that knows a lot about how I think.
Sometimes it agrees with me too much, and I have to say, “Thanks for the compliment. Now tell me why I’m wrong.”
The point is that the system has context and memory.
For the first time, the technology is getting closer to supporting actual personalized conversations.
But the industry has to stop treating personalization as a targeted offer or push notification.
A good conversation also requires trust.
Trust depends on consistency, memory, accountability, and persistence over time.
The same capabilities that make AI more personalized also create privacy questions.
And transaction data alone is not enough.
Ultimately, personalization should lead to differentiated products and experiences.
It should not stop at, “Here is the next best offer.”
It should become, “Now that I understand your situation, here is how the product itself should work differently for you.”
Maybe the bank automatically reports certain payments to help a customer build credit.
That is a product feature, not a marketing message.
I’m ranting. What’s your take?
I think real personalization is becoming non-negotiable.
Cornerstone recently held its annual AI Day, and one conversation you and I had afterward stuck with me.
People often focus on prompt-writing, but the bigger question is what the model already knows about you.
If you ask an AI system to design a Ron Shevlin trip to Mexico City, the usefulness depends heavily on whether it understands what Ron actually likes.
That is similar to how I use Instagram.
I hate going to malls and shopping in person, but Instagram understands enough about my preferences to show me clothes I actually like.
I save them. Later I go back to the post, click the link, use Apple Pay, and the item shows up at my door.
That is behavior-driven personalization.
In banking, putting someone’s first name in an email is not personalization. That is mail merge with lipstick.
Real personalization could look like this:
“You have had three large, irregular deposits in the last 90 days. Do you want help deciding whether to pay down debt, build an emergency fund, or invest?”
Or: “Your usual subscriptions are scheduled to hit before payday, and your balance may go negative. Do you want to move money or change a payment date?”
Or: “Your rent increased and cash flow is getting tighter. Here is a small-dollar credit option and a budgeting plan that fits what is actually happening.”
That is different from spraying a HELOC advertisement at every customer, including people who do not even own a home.
In the next 18 months, I think event-based insights and nudges are realistic.
Large deposits, low-balance patterns, subscription spikes, paycheck variability, and similar triggers can drive useful communication through the app, text, or email.
Conversational tools can explain those insights in plain language and hand unusual or complex situations to a person.
What is probably not broadly realistic in 18 months is a fully autonomous AI banker safely delivering complex regulated advice to every customer across every channel with minimal oversight.
So institutions should start with narrow journeys.
Pick one problem. Deposit growth. Paycheck volatility. Overdraft risk. New-customer onboarding.
And do not lose the human advantage.
Community banks and credit unions can still use local context and relationship knowledge.
When I worked in banking, I knew when customers had babies. That created a natural conversation about opening an account for the child.
It felt personal because I remembered what was happening in their life.
The challenge now is combining that kind of qualitative knowledge with quantitative data and making it scalable.
You also said something that changed the way I think about personas.
I have never been a huge fan of traditional persona design because it often becomes demographic theater.
Years ago, every website project produced characters like “Millie the Mom” or “Stacey the Shopper.”
The insight was always something generic like, “Millie has two kids and is busy, so she values convenience.”
Put me to sleep.
But the behaviors you just described, subscription spikes, overdraft risk, irregular deposits, those are meaningful personas because they are based on triggers and needs.
They create something the institution can actually act on.
I think that is a much stronger approach than purely demographic or attitudinal personas.
I’m looking at the clock, and we like to keep these episodes reasonably short.
We have a couple of other topics to move to the next episode.
I want to talk about agentic AI again, and we also need to discuss Elon Musk and X Money.
X has spent years acquiring money-transmitter licenses, and now the company is moving more directly into payments.
I am not particularly bullish on the opportunity, and I want your take.
So we’ll leave it there for today.
Thanks to everybody listening.
And do not forget to tag us on the strongest LinkedIn posts, blog posts, or other content you think should be considered for the monthly tumbler.
Please do not tag us on every post you have written for the last two months. We are not reading 40 submissions from one person.
Send us the ones you think are genuinely strong.
Stacey, any last word?
Just stay tuned. We also have some live What’s Going On in Banking recordings coming up, so we’re excited about that.
Keep sending your ideas, and let’s keep rocking.
If you enjoyed today’s episode, follow us on Spotify, YouTube, Apple Podcasts, or wherever you listen.
Thanks for tuning in.
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