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 here, as always, with my co-host Stacey Bryant.
Stacey, how are you doing?
I’m on top of the world, baby.
The Knicks are up, and I know this is a banking podcast, but I would be remiss as a New York City girl not to shout out the New York Knicks.
I’m a Knicks fan because my dad is a Knicks fan, so this season feels nostalgic for me.
By the time this episode airs, we’ll know how far they made it, but right now I am riding the high and I’m ready to rock and roll.
How are you doing?
Doing great, although you are putting yourself out there because there is a pretty big gap between when we are recording and when people will hear this.
It is entirely possible the other team takes four straight and this ages very badly for you.
But if you’re willing to go out on the limb, go for it.
I’m a real Knicks fan. Thick, thin, good, bad, ugly. Keep your probability analysis to yourself.
Fair enough.
And you know I am a New Yorker at heart. I was born and raised in New York, even though I have lived in the Boston area for 35 years.
But you are not going to like this: I have shifted a lot of my sports loyalty to Boston.
You cannot blame me. The Knicks were terrible for a very long time, while the Celtics had people like Bill Walton, who also happened to be one of the world’s most famous Deadheads.
I actually got to meet him once, which you know I had to bring up.
I thought I respected you, Ron.
We’re going to leave it there.
Nobody listening believes you respect me anyway. They have seen the clips where you give me that look like, “I cannot believe he is going off on another tangent.”
Let’s get into the banking topics.
I have not been on the road much lately other than for personal travel, so I feel a little detached from the conference circuit.
You have been traveling, though. What are you hearing?
I just got back from Ocean City, Maryland, for the Maryland & D.C. Credit Union Association conference.
Big shout-out to John Bratsakis and the entire team. He genuinely lives and breathes the credit-union movement, and it is always refreshing to be in a room with people who care deeply about the mission.
I had an aha moment there that I wanted to bring to the podcast.
I was talking with a Gen Z attendee. You do not see many people that young at these conferences, so I was curious about his perspective.
Then I learned he was not only a Gen Z attendee. He had been appointed to the board of a roughly $2 billion credit union.
Cue the mind-blown emoji.
And there was another layer: he is also the CEO of his own fintech company, which helps explain why the board saw value in bringing him in.
We started talking about what he sees as the biggest challenges facing credit unions.
He mentioned the obvious decline in branch traffic and the fact that younger consumers often do not care where a branch is located.
They care about what the institution has done for them lately, what the experience is like, what the rates look like, and what they can do from their phone.
Then the conversation got more provocative.
He said he thinks credit unions should consider dropping the words “credit union” from the name.
I said, “Tell me more.”
His point was that a lot of younger consumers do not understand the difference between a credit union, a community bank, and other financial institutions.
And if the term itself is unfamiliar, “credit union” can sound like something where you either need credit or need to belong to some kind of labor union.
I’m a credit-union and community-banking girl through and through, so I’m ready to debate this one.
But I think he may be onto something.
In the words of the great Ron Shevlin, tell me why I’m wrong.
Where do I start?
First, huge credit to the credit union for getting a new person onto the board at all.
I cannot tell you how many credit-union boards I see where the least-tenured person has been there for 30 years.
A lot of CEOs listening are probably thinking, “Forget that he’s Gen Z. How did they get a new board member?”
Second, I have been hearing the argument that credit unions should add a Gen Z board member for at least 10 years.
I think it is a bad idea when the entire rationale is simply age.
The person you met is not valuable because he is Gen Z.
He is valuable because he is a technologist, an entrepreneur, a fintech CEO, and someone who brings capabilities and perspectives the board may not already have.
His age is secondary.
Nobody should be placed on a board purely to represent a demographic group.
You would never put somebody on the board just because they have red hair and say, “Great, now red-haired members are represented.”
And if what you really need is insight into Gen Z behavior, do market research.
One person is not a representative sample of an entire generation.
Bankers challenge me all the time on survey methodology. “Ron, what was the sample size? Was it representative?”
Then the same people will turn around and say one 25-year-old can represent all of Gen Z on a board.
That makes no sense.
All right, hear me out.
I am not arguing that you wipe out older board members or appoint somebody solely because they are young.
What I’m arguing for is diversity of thought, and generational diversity can contribute to that.
We have talked about MrBeast entering fintech. We have talked about young consumers learning about money through TikTok, YouTube, and creators.
Samantha Paxson spoke at the Maryland & D.C. event and shared a story about her 11-year-old son wanting to invest in Nvidia because of what he had seen online.
That is how younger generations are being exposed to money and investing.
So I absolutely believe boards benefit from having multiple generations in the room because people bring different lived experiences and assumptions.
They challenge one another.
That is what I am defending.
I agree with diversity of thought.
I am simply saying you are conflating demographic representation with board capability.
A board should be built around the skills, experiences, perspectives, and relationships that help the institution govern and grow.
That may absolutely result in a younger board member.
But the rationale should not be, “We need a Gen Zer because we want to understand Gen Z.”
If you want to understand a market segment, research the market.
You would not say, “Gig workers are a growth opportunity, so let’s put one gig worker on the board.”
You would study the segment, build a strategy, and then make sure the board has the skills needed to oversee that strategy.
I still disagree with you, but we have more topics to cover, so let’s move on.
You have been killing it on Substack the last few weeks.
Can we pause for 30 seconds on that?
I do not know whether I mentioned this already, but Forbes fired me as a contributor.
It messed with me a little psychologically, and now I am absolutely determined to rebuild an audience independently.
The upside is that Substack gives me much more freedom. I can publish what I want without an editor changing something after publication or taking a piece down because it does not fit whatever standard they have decided on.
So thank you for the plug.
If people want to find it, it is ronshevlin.substack.com.
The piece you wanted to discuss came from a Wall Street Journal article about senior executives creating digital twins or AI clones of themselves.
These systems are trained on their emails, speeches, interviews, presentations, and other content.
Reid Hoffman has an AI version of himself that has reportedly appeared at dozens of events.
An HR executive has a clone that interacts with employees. Other executives are experimenting with similar tools for reviews, communication, and internal access.
I will admit there is one part of this I find appealing.
If somebody could pay AI Ron to travel to a conference and give a presentation while I stayed home, that sounds pretty good.
Although my wife would quickly point out that we use those trips for vacations too, so maybe I just ruined my own idea.
Here is my actual take: I think using digital clones as public stand-ins for executives is a terrible idea.
The premise assumes executives are constrained mainly by response capacity, as if the biggest problem is simply that they cannot answer enough questions or attend enough meetings.
I do not think that is the real constraint.
Executives are constrained by judgment.
Judgment requires context, accountability, involvement, and skin in the game.
An AI clone can reproduce a person’s language patterns and past opinions. It does not actually own the decision or the consequences.
So the clone automates the appearance of access without the substance that makes executive access meaningful.
Are you going to argue with me on this one too?
I was planning to disagree with everything you said today simply because you switched your loyalty to Boston sports.
But on this one, I’m with you.
Being at Cornerstone, I get to be gonzo and opinionated, which is one of the reasons I love doing this show with you.
And you actually caught me recently doing something similar on a smaller scale.
I sent you something and you immediately said, “Stacey, that sounds like AI.”
You were right.
You know my voice and how I actually think, so you could tell when the language was not really mine.
That is the problem with executive clones too.
If I discover that the person motivating me or giving me judgment is really a synthetic version of that person, something changes.
It stops feeling like leadership and starts feeling like an illusion.
For community financial institutions especially, I think trying to imitate this trend would be a mistake.
Their advantage is often the human relationship. People know the people.
Use AI as a tool. Do not use it as a fake human replacement for the very leadership and trust that differentiate the institution.
Exactly.
And I want to add one important distinction.
I started my analyst career at Forrester Research a long time ago.
My boss told me my first report would be on knowledge management.
I said, “I do not know anything about knowledge management.”
He said, “Nobody else does either. That is why we need the research.”
When I started interviewing companies, nearly everyone said the same thing: “We need to extract the knowledge from people’s heads in case they get hit by a bus tomorrow.”
I eventually wrote that the goal was valid but the technology simply did not exist to do it well.
Twenty-five or 30 years later, large language models finally give us much better tools for capturing and using institutional knowledge.
That is where executive clones could be valuable.
Train a system on an executive’s 20, 30, or 40 years of experience so the organization can use it for training, knowledge transfer, and historical context.
I am all for that.
But representing the executive publicly is different.
Imagine you ask for a meeting with Cornerstone CEO Steve Williams and his assistant says, “Steve cannot meet with you for two weeks, but virtual Steve is available in five minutes.”
Is that what you actually want?
No.
And there was a line in your article that said, “If a question can be safely answered by a model trained on an executive’s old emails and slide decks, you probably never needed the executive in the first place.”
Whoever wrote that is brilliant.
I know. Amazing writer.
The larger point is that institutions should not chase AI that makes leaders look important. They should chase AI that makes people more effective and decisions smarter.
I could absolutely see value in something that helps me understand how Ron tends to approach a certain situation or what frameworks he uses.
That is useful.
But once the model starts impersonating judgment and taking actions as though it were the executive, the accountability becomes very messy.
So I agree with you. Do not do it.
I’m glad we finally found something to agree on.
We have time for one more topic.
A lot of boards have been asking me about tokenization and stablecoins, and there was a recent announcement from SoFi that caught my attention.
SoFi launched SoFi USD, its own fully reserved U.S.-dollar stablecoin.
It runs on Ethereum and Solana and is redeemable one-to-one for U.S. dollars.
The announcement itself was not a surprise because SoFi had previewed the plan months ago.
What surprised me was how most of the coverage framed it.
The headlines focused on SoFi becoming the first bank to issue a stablecoin and on the fact that the company has roughly 14.7 million users.
I think those headlines miss the more important story.
The real opportunity is Galileo.
When SoFi originally announced the stablecoin, it explicitly said SoFi USD would help the company provide stablecoin infrastructure to banks, fintechs, and enterprise platforms.
Realistically, I think fintechs are the more immediate market.
Galileo can make SoFi USD part of the infrastructure it already provides to fintech clients.
That creates potential revenue through reserve income, settlement services, infrastructure fees, and other payment capabilities.
Longer term, I think there may be a large enterprise treasury-management opportunity too.
SoFi has already expanded its banking capabilities for small businesses.
If Galileo can move deeper into enterprise money movement and treasury workflows, SoFi USD could become much more important on the B2B side than on the consumer side.
That is the part of the story I think people are missing.
To quote Queen: Galileo, Galileo, Figaro.
I agree. This is a strong move for Galileo.
And it reinforces something we have talked about repeatedly: community banks and credit unions need to understand where stablecoins fit in their strategy.
That does not mean everybody should issue one.
It means asking a few practical questions.
Where in your technology stack could tokenized money show up first?
Settlement? Treasury management? Wholesale funding? Customer-facing wallets?
What role do you actually want to play?
Issuer? Participant on somebody else’s network? Indirect user through a processor or card network?
And who are you trying to serve differently?
Local small businesses? Cross-border businesses? Fintech partners? Larger commercial clients?
Once you answer who you are trying to serve and what problem you are trying to solve, you can reverse-engineer the technology and partnership choices.
That actually makes me realize something about my own language.
When I say every community bank needs a stablecoin strategy, even that can be misleading.
What every institution really needs is clarity in its business strategy so it can determine what role stablecoins or tokenization should play.
That is the more accurate way to say it.
And I think I have a new title for my Substack post: “Galileo Magnifico.”
It will be terrible for SEO, but I like it.
I like it too.
And I think that is a good place to wrap this one.
Thanks, Stacey, for the perspective as always.
And thanks to everybody listening. We hope to see you on another episode of What’s Going On in Banking.
And let’s go Knicks.
If you enjoyed today’s episode, follow us on Spotify, Apple Podcasts, YouTube, or wherever you listen.
We’ve got more witty, gritty conversations coming your way.
Stay tuned.
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