Succession planning has become a critical issue in the community banking sector, as aging leadership faces imminent retirement and younger generations express limited interest in the industry.
In a recent episode of the Community Bank Podcast, host Caleb Stevens (part of South State Bank’s Capital Markets and Correspondent Banking Division) explores this pressing topic with Brian Love (Travillian’s Head of Banking and Fintech) and Keith Daly (Principal – Banking & Fintech Search at Travillian).
Attracting and Developing the Next Generation of Bankers
Love highlights the increasing age of community bank CEOs, which has risen to an average of 62.5 years, with board members often nearing 70. In light of this trend, Love assesses, “There needs to be a torch passed, and we’re helping several banks think through this.”
He explains that succession planning in banking involves assessing internal talent, considering external candidates, and addressing the timing of leadership transitions to avoid instability.
Daly adds that banks must also address immediate gaps in critical roles, wryly referring to this as the “win-the-lottery plan.” He emphasizes the importance of cross-training and ensuring employees at all levels can step up if necessary.
Storytelling to Inspire the Next Generation of Bankers
Recruiting younger professionals into banking has been a longstanding challenge. “Banking stopped being ‘cool’ after the 2008 financial crisis,” observes Love. To combat this decline in interest, he stressed the importance of storytelling: “You need to show young people how they can make an impact quickly in community banks.”
Daly expands on this idea, pointing out that small banks offer expedited career growth. “You can go from an entry-level position to sitting at the table with the CEO in a short time—something unimaginable at a large institution,” he says.
Stevens, the podcast’s host, shares a personal anecdote to illustrate the power of perspective: “Passion follows proficiency. I didn’t think I’d enjoy banking until I understood it.”
Internal Development vs. External Hiring
Generally, the Travillian Group advocates for promoting internal talent but also recognizes the value of external hires. Daly shares a success story in which an external candidate brought fresh ideas that wound up boosting bank profitability. “Sometimes, an outsider’s perspective is what’s needed to challenge the status quo,” he explains.
Love, however, stresses that banking organizations must develop robust training and mentorship programs to nurture internal talent. “Developing people is something you can never do enough of,” he notes, highlighting rotational programs as a valuable tool.
Emerging C-Suite Roles: Meeting Modern Challenges
As banking evolves, new executive roles are emerging to address technological and strategic demands. Daly identifies positions like Chief Innovation Officer and Chief Data Officer as critical to driving efficiency and customer retention.
“Banks need someone focused on the future,” he says, adding that these roles often integrate fintech partnerships and data analytics.
Love shares an example of a forward-thinking bank that created a Chief Strategy Officer role to internalize corporate development, demonstrating the potential for leadership innovation even in smaller institutions.
Overcoming the Talent Shortage in the Community Banking Industry
Succession planning, recruiting young talent, and embracing innovation are not just buzzwords—they are imperatives for community banks looking to thrive in a rapidly changing environment. As Love aptly states, “Succession plans need to be fluid, but they also need to exist.”
This complete succession planning in banking interview is available at the Community Bank Podcast, posted on both Apple Podcasts and Spotify.
