Apparently, bank directors are a very worried bunch. Nearly 20 members of Bank Director’s membership program responded to the question posed in last month’s newsletter: “What worries you most about the future?”

1. CYBER
CYBER
CYBER
Cyber
Cyber
REGULATION
REGULATION
REGULATION
Regulation
SECURITY
SECURITY
Security
Security
BANKBANK
Bank
Bank
BANKS
BANKS
Banks
Banks
Future
Future Future
Future
Board
Board
Board
BOARD
BOARD
Financial Worry
Financial Worry
Financial Worry
FinancialWorry
CustomerManagement
Customer Management
Customer Management
Credit
Credit
Credit
Credit
CREDIT
CREDIT
Succession
Succession
SuccessionSuccessionConcern
Concern
Concern
Director
Director
Worries
Worries
Worries
WORRIES
Ability
Ability
Ability
Changing
Changing
Changing
Changing

2. The overwhelming word that came up
again and again was “cyber.” Directors
said they are worried about threats to
digital infrastructure and the security of
their customers’ data.
Said one director:
“What worries me the most is
cyber/fraud incidents that could
be external or internal. We must
be vigilant in our discussions with
bank leaders to ensure that every
protection that is available has been
considered and adopted or ruled out
for valid reasons.”
CYBER

3. In terms of what worries directors
the most, regulation is a close second
to cybersecurity. One director said he
is most worried about “oppressive
regulation that paints with a wide
brush and causes inordinate expense
to my bank through additional
compliance.”
Another director said, “I’d rather see
my bank get out of mortgage lending
entirely than risk the [Consumer Financial
Protection Bureau] and the [Department
of Justice].”
REGULATION

4. Succession planning also was
a widespread concern. One
director complained that no one in
management was willing to take the
CEO spot. Another said his questions
include, “What is the bank doing
to prepare people from within
to take new top management
positions? How is the board
identifying and locating qualified
board candidates?”
SUCCESSION
PLANNING

5. Still others worried about nonbank
competitors, which aren’t as heavily
regulated as the banking industry, but
offer some of the same services, such
as loans. “If we are not on a level
playing field with nonbanks, we are
in trouble,” said one director.
NONBANK
COMPETITORS

6. Digitization also was a top concern.
“Our customers demand banking
services virtually anywhere,
anytime, and the changing threat
environment and consequential
risks involved keep me up at
night,’’ said one director.
TECHNOLOGY

7. A few directors mentioned the low
rate environment as a threat. One said
the “days of 4 [percent] to 5 percent
margins are long gone,” and it is “very
difficult for community banks to
compete when margins are thin,
cybersecurity is a 24/7 concern,
and the regulation filed just keeps
getting longer [and] steeper.”
LOW RATES