Credit unions need to loosen the purse strings to land compliance, risk and finance talent

What are the hottest positions for community financial institutions to fill in 2024?

Those within compliance, risk and finance certainly head the list, according to B.J. Berrettini, executive director for a search firm in Kingston, Pennsylvania.

As proof, Berrettini said the firm has filled multiple CFO, treasury, accounting, BSA/AML and risk positions this year at small to mid-sized, publicly-traded and mutual-savings banks.

In addition, they are actively working on a chief risk officer position for an entrepreneurial stock bank with multiple fintechs arms.

“And we are about to launch a heavily-weighted CFO search for a multi-bank mutual holding company in acquisition mode in New England,” he said.

Given the ongoing liquidity crunch, Berrettini said the hot positions include higher-level roles held by strategic-minded talent that can make or save the FI money and impact the bottom line as they think outside the box.

“Necessity is the mother of invention, and when net interest margin and fee revenue drops, banks need to get creative,” he said.

So how do banks and credit unions that are in need land the top talent available?

When attracting and retaining risk, finance or compliance talent, the challenge for small to mid-sized financial institutions is shifting their mindset around compensation and the perception of value from that of a cost center to revenue generation and savings, Berrettini said.

“A penny saved is a penny earned, and if the right CRO can help the bank stay aggressive while avoiding regulatory issues, an aggressive compensation package is often justified,” he said.

The same philosophy can be applied to a CFO that can position a bank for an acquisition, lower operating costs or come up with creative investment strategies all of which will save or make money.

The aggressive compensation packages offered to commercial bankers from 2020-2023 need to shift to finance, risk and compliance in 2024 or community FIs may not be able to hire the talent they need during this challenging cycle, Berrettini said.

Todd Engemoen, president and CEO of $1 billion-asset R Bank in Round Rock, Texas, told Tyfone there are not many finance professionals in banking, but there are a lot of accountants.

Engemoen, who was formerly the CFO at VeraBank, said finance professionals who have a strong grasp of the language of accounting, but view the business from a true finance perspective are rare in banking, mostly because there’s not a breeding ground for them within banker development programs like there are in lending and accounting.

“The bank’s balance sheet is full of assets and liabilities that are all some form of financial contract with customers,” Engemoen said. “How you manage that interplay is the largest driver of revenue for the business. Finding those finance leaders is pretty challenging even having used a really experienced search firm for a finance professional at my last job.”

But Bruce Kershner, president of Kershner & Co., an executive search firm focused on financial institutions, told Tyfone he is seeing more activity on the IT side than in finance—especially in terms of cybersecurity and data positions.

“I’ve also seen a bit of a spike with troubled institutions,” he said. “Hopefully that’s not a sign of things to come. Mostly, it’s a matter of community bankers getting older and retiring, and some institutions deciding to sell.”

The summer has been relatively quiet in terms of the search business, Kershner said, but just in the last couple of weeks he has been getting calls from a number of institutions that are looking for new—or replacement—chief digital officers and chief data officers.

Some banks are either just beginning to implement or have only partially implemented their digital road map, Kershner said.

Scott Wilson, president and CEO of $798 million-asset SeaComm Federal Credit Union in Massena, New York told Tyfone there are geographic pockets where qualified, front-line staff is hard to hire, such as in the credit union’s Vermont market.

“Our open positions have been halved since last year, which is a positive trend,” he said. “Our areas of compliance, risk and finance have been stable with not too much turnover.”

Berrettini said that while finance, risk and compliance roles are clearly the highest priority in 2024, additional trending talent requirements include IT and cybersecurity managers, fintech partnership managers, wealth management relationship managers and data & business analysts.

“However, in order to attract and retain talent in these additional lines, community banks and credit unions must have a clear and committed strategy for progressive growth,” Berrettini said.

Community bank and credit union CEOs regularly express interest in hiring talent in those spaces because they find the concept of the hires and the value they represent as an attractive want or need, but then they often put the concept on hold because the institution is not ready.

This is undoubtedly due at least partly to compressed net interest margin, but also because many community banks and credit unions are stuck in an old way of doing business, he said.

During the last decade, New England has lost more than 60 community banks to mergers and acquisitions and these consolidations have been profitable and beneficial to many.

“However, the benefits of institutional growth through consolidation will plateau at some point and community banks and credit unions need to get unstuck and start thinking outside the box with progressive strategies around digital transformation, fintechs partnership and data analysis now, not later,” Berrettini said.

Portland, Oregon-based Tyfone is a leading provider of consumer and commercial digital banking services for community financial institutions. What differentiates Tyfone is its unwavering commitment to exceptional collaboration and communication. When it comes to workplace culture, Tyfone’s goal is ambitious – making work fun! The company is always on the lookout for like-minded people who want to be a part of something bigger.