The Case for Continuous Innovation

President & CEO Community Bankers Association of Georgia

Over the years, we have all heard quotes and phrases regarding change, such as: “The only constant is change,” and “If you are not moving forward, you are moving backward.” There are many more as well; however, the general idea is that it is important to always be innovating and evolving both in our professional and personal lives. Considering the micro and macro economics of the world we live in today, the case for innovation should be abundantly clear for Georgia’s community banking industry.

The Qwickrate Community Bank Index first quarter 2022 statistics for all Georgia community banks under $10 billion in assets reveal a five year low in both NIM (3.18%) and NII (.48%). Additionally, due to a variety of factors mostly inflationary based, the average efficiency ratio hit a 5-year high rising to 70.6%. Obviously, these Q1 numbers do not reflect the recent Fed rate increases which will drive up interest rates; however, I am already seeing and increase in deposit rates. While these are only a few metrics, they do help make the case for the need to innovation. When discussing innovation with bankers, some will note the implementation of a new fintech or regtech solution or perhaps a complete change of their core processor. Both are certainly forms of innovation; however, may not be part of a comprehensive and ongoing approach to the business. In my 35-year businesses career, the companies I have seen succeed over time have adopted a philosophy of innovation throughout the organization – not just in the C-suite. All employees are encouraged to bring innovations to the table for discussion as to how a new process or technology fits into the broader organization. In sum, innovation becomes pervasive throughout the organization and becomes part of the company’s culture.

To help member banks develop a culture of continuous innovation, CBA has launched an education series named the CBA Innovation Exploration Bundle. This comprehensive series has been thoughtfully designed with the help of CBA’s Education Committee and Innovation Committee. In other words, designed by community bankers for community bankers. I encourage all to consider the series as well as embrace a philosophy of continuous innovation throughout your business.