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Financial Services: Balancing high-tech with high-touch

Region’s banks are evolving their service platforms to meet the changing needs of customers

By Mark Green

Contactless and cashless payment mobile transaction

Lexington’s strong banking market is in growth mode, with new institutions and surging deposits ready to meet demand for loans and provide the technology customers expect.

Deposits increased 77% from 2015 to 2022, according to FDIC reports. As of June 2022, there were 39 FDIC-insured institutions in the region, reporting $16.2 billion in deposits.

“We think the next big thing is going to be finding a balance between high-touch banking and high-tech banking. We continue to invest in our technology and even recently introduced several new mobile banking features,” said Luther Deaton, president/CEO and chairman of Central Bank. “We know digital banking is a preferred method by many, but we won’t forget that even the most tech-savvy customer appreciates being able to reach a live person when they have questions or need help.”

With 20 banking centers, Central Bank is the region’s largest institution and is using its “tremendous growth” in deposits to focus on how best to provide local businesses with lending and support operations such as merchant services and digital banking.

Bank of America entered the Kentucky market by opening three Lexington offices as well as several unstaffed “kiosk” sites where customers can interact by video with bankers.

Louisville-headquartered Stock Yards Bank entered the desirable Central Kentucky market by acquiring Paris-based Kentucky Bank, a move that made it the state’s largest homegrown bank. More than 10 banks have entered the local market since 2015, while more than a half dozen departed and a few merged or were acquired.

Republic Bank, the state’s second largest overall, operates six Central Kentucky centers. Republic is using technology to be more available to clients where and when they want, said Todd Ziegler, market president in Lexington. That includes interactive teller machines with access to live tellers from 7:30 a.m. to 6 p.m. weekdays and 8:30 a.m. to noon Saturdays, which augments online and mobile banking.

Ziegler said innovative fraud prevention services are a growing area of focus. Republic was recently recognized by American Banker for its efforts to educate clients about identity theft and credit card fraud through the #BanksNeverAskThat and #RBEasyTips programs.

Republic was Kentucky’s largest Small Business Administration lender in 2021 and has a lending program that focuses on health care and veterinary professional practices.

Kentucky is an important strategic market for Cincinnati-based Fifth Third Bank, said Tim Spence, CEO of the national heavyweight, which counts $165 billion in deposits across all its markets.

The commonwealth is significant for the access it provides Fifth Third to pursue its focus on manufacturing and investment in building new U.S. supply chains, Spence said. Not only is industry reshoring production previously located overseas, but major new sectors are forming as vehicle manufacturers shift to electric vehicles and the nation builds renewable energy resources.

Fifth Third is investing in technology to better serve its customers, who already conduct 75% of their transactions electronically. The bank’s strategy is to allow customers to do simple tasks and transactions on their own at their convenience while having bankers available to help make decisions such as managing their liquidity, saving for goals, being prepared for the unexpected or “getting paid.” Kimberly Halbauer, Kentucky market president for Fifth Third, said the bank has an outlook that it “can be all things to most people.” Service specialties range from individuals and small start-up businesses to specialists who work with clients handling more than $1 billion in business annually.

Fifth Third is among the large banks incorporating artificial intelligence into its customer services, driven by a tight labor market that is expected to become even tighter over the next decade.

“More people will retire yearly than graduate from college,” Spence said. “Everybody is going to need to find way to invest in tech to improve productivity.”

Mount Sterling-based Traditional Bank, which just marked its 120th anniversary as an independent community bank, has 15 offices in the Lexington-Central Kentucky market. Based on feedback from customers and employees, Traditional expanded its team of mortgage loan originators and loan operations staff in early 2022, establishing new in-house processing capabilities and secondary market partnerships, said CEO Andy Baker. The bank now offers more competitive rates and faster closings.

Baker said loan demand increased in the summer, especially in the commercial real estate sector, and noted that residential development and construction and multifamily construction continue to be a primary focus.

Baker sees the next big thing in banking as a reimagining of the customer relationship, with community banks learning how to merge evolving customer expectations and technology with high-level service.

“I think our bank is uniquely positioned to be a leader in that area,” Baker said, “being in an exceptionally strong financial position, having invested in developing our people in equal measure to expanding our technology, and being a privately held organization with the ability to make quick decisions and pivot as needed.”

PNC Bank has 20 banking centers in the Lexington market and the largest deposit share in Kentucky. Based in Pittsburgh, it has a presence in the nation’s 30 largest markets after acquiring BBVA USA a year ago.

Despite post-pandemic growth being subpar, PNC is realizing success in Central Kentucky—particularly in commercial banking and wealth management, said John Gohmann, PNC’s market leader for the Greater Lexington region. He credits the job PNC team members did staying connected to clients, building on existing relationships to navigate pandemic challenges and helping with strategies for business resilience and continuity.

PNC also is running in today’s technology marathon, with security a primary focus.

“As customers increasingly embrace technology … and as the pace of technology advancements accelerates, it is essential that financial institutions continue innovating and investing in cybersecurity measures to protect customers’ accounts and personal information,” Gohmann said. “The reason people deposit money in a bank is to keep that money safe. While that hasn’t changed over the years, the evolving digital landscape and the security implications that come with that are incredibly dynamic. Protecting customer data is a capital-intensive proposition, and because PNC has the resources of one of the nation’s largest banks, we can make the investments necessary to deliver that security.”

Here is a list of banks and credit unions in the Lexington and Central Kentucky market:

Bank of Lexington
Bank of the Bluegrass & Trust Co.
Bankers’ Bank of Kentucky
Central Bank & Trust Co.
Century Bank of Kentucky Inc.
Citizens Guaranty Bank
Citizens Commerce National Bank
City National Bank
Community Trust Bank Inc.
Cumberland Valley
National Bank & Trust Co.
Farmers National Bank
Field & Main Bank
Fifth Third Bank
First Southern National Bank
Forcht Bank
German American Bank
Guardian Savings Bank
Limestone Bank

Old National Bank
Peoples Exchange Bank
Republic Bank & Trust Co.
South Central Bank
Stock Yards Bank
(formerly Kentucky Bank)
Town & Country Bank and Trust Co.
Traditional Bank
Truist (formerly BB&T)
US Bank
Whitaker Bank

Commonwealth Credit Union
Greater Kentucky Credit Union
Kentucky Employees Credit Union
KUE Federal Credit Union
Lexington Postal Credit Union
Members Heritage Federal Credit Union
Metro Employees Credit Union
Park Community Federal Credit Union

The Health and Education
Federal Credit Union
University of Kentucky
Federal Credit Union
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