John McWeeney remembers one of the first great technological innovations in the banking system. The concept made sense — yet it was difficult to comprehend. It somehow didn’t feel safe, didn’t feel normal, didn’t feel … like banking.
But, with an aggressive marketing campaign, a few years of proof-of-concept acceptance and word-of-mouth affirmation, the banking industry’s new tool became mainstream.
And we all had ATM cards.
McWeeney, who earlier this month announced he will be retiring as head of the New Jersey Bankers Association, effective next June, laughed a bit when he told the story.
“That was a really big thing back then,” he said.
The first ATM launched in 1969, but it was about a decade later when they really became mainstream. It was about the time McWeeney was launching a more-than-four-decade career in the industry. And it taught him something from the start: The banking industry — though always the bedrock of the economy — always is changing and adapting.
Today, it may be cryptocurrency, the rise of fintechs and the changing nature of old-school banking branches, but McWeeney is steadfast in his belief that the industry will adjust as needed.
“I think the strength of the American banking system is the diversity of the system,” he said. “We do have large banks, like JPMorgan Chase and Bank of America, that can do things that the local community bank can’t, but then, we have the local community bank that does things that maybe the larger banks don’t have an appetite to do or don’t do as well.
“I think the winners are our customers, both consumers and business customers, because they have access to better services that are faster and more efficient.”
How cryptocurrency technology will play out isn’t as clear.
McWeeney is taking a cautious approach.
“I think, given all of the excitement around it, and all of the money that’s been invested in it, it’s definitely here to stay,” he said. “It’s real.
“As far as how it will impact the banking system — some say it’s going to become a new form of currency and replace the dollar as a standard form of currency because it’s so efficient — that remains to be seen.”
McWeeney has the same feeling toward fintechs, seemingly an even bigger direct competitor to traditional banks moving forward.
“Some fintechs are competing with banks, some are partnering,” he said. “I think, from the banking industry’s perspective, we’re used to competition and confident that our banks will survive and prosper, but we want a level playing field.
“The concern would be if they create a fintech charter, which is different than a traditional banking charter. If they’re not going to be subject to things like the Community Reinvestment Act or other types of regulatory requirements with capital or things of that sort, then that’s an unlevel playing field, which gives them a distinct advantage over banks.”
Competitors? When you have an industry so big and powerful, there always will be newcomers, McWeeney said.
“You’ve got companies like Amazon or Walmart that periodically want to put their toe in the market,” he said. “Perhaps they will attempt to get a banking charter.”
McWeeney, who will help NJBankers with the transition of selecting a new CEO, will retire June 30 of next year.
He joked that he’s only had two jobs in his career. The first was three decades with Fleet (which became Bank of America at the end of his run). The second was with NJBankers, which will be a 15-year career by next June.
McWeeney spoke with ROI-NJ about his career and the industry. Here’s a look at more of the conversation, edited for space and clarity.
ROI-NJ: All sectors and industries change — but it seems as if the banking industry has changed more in the past few years than ever before. Talk about the speed of change?
John McWeeney: So much has been accelerated by the pandemic. It’s almost a necessity for people if they wanted to do their banking to have access to their accounts digitally. I think for banks to remain relevant and competitive, they’re going to have to adapt more quickly — even more than they have had to in the past.
Customer preferences are changing. We know that the younger generations expect things to be done like in real time. And they want it fast and easy. That’s a big part of how they select where they want to do their banking.
I think we’ll still have branches in the future, but probably fewer of them and they’ll be a little smaller, maybe a little more technologically self-service oriented. Both online banking and mobile banking are both exploding. So, what’s next, the ability to do your banking while you’re driving in your car?
There’s always something new that’s coming. What people don’t often see is that banks always have adjusted quickly.
ROI: How so?
JW: The regulatory environment has changed dramatically. When I started, a bank wasn’t allowed to do business across state lines. Interstate banking was just starting to happen back in the late ’70s and the early ’80s. Before that, you know, most banks were just doing business in the state that they were headquartered in. That obviously started the beginning of industry consolidation.
And banks have a lot more power to do different types of services today than they did back in those days. I think that’s all for the better, and I think all the technological changes are for the better, as well.
I think the winners are our customers, both consumers and business customers, because they have access to better services that are faster and more efficient.
ROI: Some would say the losers are the smaller banks, some of which are struggling to meet new regulatory compliances.
JW: The Dodd Frank Act, which came out of the financial crisis, certainly created a lot more regulatory burden on banks. I do think that that’s been a contributing factor to some of the consolidation that’s taking place in the industry, because the cost of compliance has gone up. The flip side, though, is that bankers have had to figure out how to do things to get more efficient.
Our membership, first and foremost, is banks. But we have 175 companies that are associate members that do business with banks, and they’re all different spaces. And some of them focus in the area of compliance and the Bank Secrecy Act. They help them navigate and find more efficient ways to do things so that they can remain competitive or remain profitable. So, the regulatory environment continues to evolve.
ROI: You mentioned the financial crisis. And before that, there was the savings & loan crisis. And, of course, there was the pandemic. Talk about the role of the banking sector in our society.
JW: Coming out of the financial crisis, fairly or not, the banking industry got a bit of a black eye. Many felt the banking industry was the cause of all that. I don’t subscribe to that theory. I think there were a lot of reasons and a lot of players — and some of the bad actors were banks. But, because of that, the industry’s reputation was tarnished.
Coming out of the pandemic, I think the industry’s got a great reputation. People, whether they were a consumer, a small business or a large business, relied on their bank to help them get through this crisis, whether it was deferring a loan payment, getting them a PPP loan, processing their economic stimulus checks — all those things.
I think the industry really demonstrated how critical it is to our economy as the main financial intermediary between the government, a marketplace and consumers and businesses. There was no other way that could have been done if it weren’t for the banking system. Including the regulators.
ROI: How so?
JW: The regulators were tremendously helpful. They were very understanding and encouraged banks to be flexible with borrowers. Our members did lots of loan deferrals. Thankfully, most of those deferrals after 90 or 180 days went away and people are back on their feet for the most part.
The regulators could have taken a different approach. They could have been very strict and said, ‘You can’t do this, you can’t do that.’ But they joined in, just like everyone else, to get everybody through the pandemic.
ROI: Let’s talk about you personally. What is it like to make such an announcement?
JW: There’s certainly mixed emotions. And, when you start to hear from people that you haven’t heard from in a while and they start wishing you the best, you get a little bit melancholy.
This isn’t COVID-related. I have been planning this for a while. In fact, I informed our board of directors before the pandemic. When I retire this June, I’ll be 67. And I’ll have 43 years in the banking industry. So that’s a good run time. It’s time to move on.
ROI: Has the industry been a rewarding career — would you recommend it to others who are just starting out?
JW: Definitely. I think banking is a great career. I always felt that, within a bank, you had so many different career paths. If you want to be an HR professional, technology, social media, you can do that. If like more traditional banking, lending, wealth management, insurance services, you can do that. I joke that I’ve only worked for two organizations in my career, but I’ve had lots of jobs.
It seemed like every three or four years, I had a chance to do something different and learn something new. And that’s just because of the breadth of what the banking business is. It’s not a narrow career path. That’s pretty cool. And very rewarding.
ROI: How so?
JW: There’s something special about banking in that you can see the fruits of your labor. The amount of pride bankers have had during the pandemic is through the roof, and well-deserved, because they worked 24/7 and they saw firsthand how they saved businesses and saved economic lives.
It’s really cool thing when you can impact people’s lives that way — and that doesn’t even include all of the philanthropy and community-building that comes with banking. I know a lot of younger people value that more than their paychecks. They want to work for socially responsible companies. I just think banking can check all those boxes.
It’s not for the faint of heart, but it’s always going to be fast-paced and exciting.