A Different Kind of Banking

I have been affiliated with Midwest BankCentre as a board member for nearly 10 years, of which 5 have been on the executive team. Each year, during this season, I try to find some time to reflect and share interesting insights that I have picked up on my journey.

In 2021, Midwest BankCentre announced a commitment to incrementally lend an additional $200 million over a five-year period to the people, nonprofits, faith-based institutions, community development projects, and small businesses residing in or benefiting historically under-resourced communities. Our goal is to ensure people have access to reasonably priced capital on all local main streets and to help the region thrive. This is part of our Impact Banking effort, and we have had the good pleasure of partnering with many local individuals and businesses to reimagine banking.  We are proud that we are on track to meet our five-year commitment.

Transforming the region is not as simple as banking differently, but it is a good first step. You want to do a portion of your banking with locally headquartered financial institutions that are accessible and not insulated from local challenges. Then you want to hold them accountable for doing what they say they will do. This, combined with a continuous focus on things like attracting new businesses and people, will help our region thrive.

As someone with zero banking experience before joining the Board of Midwest BankCentre, one of the most frequently asked questions I receive is, "Was it easy to make the transition from board member to a member of the management team who happens to sit on the board?"

The answer is no. It was not easy. It took work. Serving as a board member is significantly different from serving in an operational capacity in any organization. Curating the right team is the first right step.

Another prevalent question is, "What's one thing I have learned about banking that intrigues me?"

It's not so much that I learned this next point, but just been reinforced. Banking is inherently a sales, customer service, and risk management business. I believe nothing happens without a sale and nothing good sticks long-term without good customer service. And everything is predicated on relationships. But banks carry a higher burden because they can make a sale, have decent customer service, and the profit from the deal falls out of the bottom because they didn't appropriately think about the risk or have a risk management framework that would help source and mitigate those risks.

To my friends who wonder why banks ask so many questions that seem intrusive, this is why. The management team of banks don't just answer to a board, but they answer to a regulatory body. The questions they ask are to ensure they can appropriately justify their decisions to any reviewing party and to qualify that it makes good business sense. Accountability is important for banks or even a St. Louis mortgage company.

My move to Midwest BankCentre over 5 years ago from the nonprofit sector was founded in my desire to have an even bigger impact by optimizing access to financial capital in a profitable manner for all communities. I’m excited about the successes of the past and even more energized about the possibilities in front of us.  Today, what I can tell you more than ever is that where you choose to put your dollars, who you choose to do business and build relationships with matter.  Where you bank matters. 

Originally published in the St. Louis Business Journals Ask The Expert Column on 11/25/2023 by Orv Kimbrough, Chairman and CEO.