Takeaways From The Banking Symposium (Issue #56)
Happy Easter to those who celebrate!
I had the special opportunity to attend John Maxfield’s Banking Symposium about a month ago where I rubbed shoulders with some of the greatest bankers of our time. As promised by Maxfield it was a conference like no other and a truly once-in-a-lifetime experience.
Here are some of my takeaways:
Banking is both an art and a science. This makes it difficult and it explains why of the ~44,000 banks in US history only ~4,800 are around today (In the US). Science is clear, not overleveraging and tracking the financial health fiercely. However, there is more to it in order to have a healthy and successful bank. As Maxfield says, “Cash isn’t king it’s court jester, Confidence is King.” Confidence is not a science it is an art or at least a soft science.
Don’t try to be a conformist or contrarian. All too often people try to pick a side whether that means going with the crowd or going against it. The crowd is irrelevant. Either choice you make you are connecting your results to the madness of mobs. Instead you should ignore the opinions of others and make the decision that you think is best. This doesn’t have to contradict or confirm the decisions of others.
Banking is difficult and inherently has many complications so don’t complicate it any further. This is a “renting money for a fee business.” The idea is so simply it was used in Babylon and Mesopotamia.
Be both competitive and collaborative. Competition breeds innovation which will benefit the industry and its customers. However, collaboration between companies to solve industry wide problems is useful. If you don’t think so just look at banking disasters where other banks worked together to fund resolutions (think SVB and First Republic).
Create a balance of new innovation to bring the industry forward and caution/safety to not over extend the bank. Banks are innovative, but they are such a crucial pillar of society they cannot take massive uncalculated risks. Their moves need to be tactical and purposeful because there is simply too much at stake if they “lose.”
I had many more insights too, but I didn’t want to overwhelm on this Sunday morning. For more ideas and takeaways go to my Twitter @PillarsProfits and stay tuned for the coming publications here. If you haven’t subscribed already take this opportunity to join the journey:
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Until Thursday,
Soren