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Selling and banking can’t be strangers

One scandal does not a game changer make

"There’s really not much that indicates we’ve learned anything new over the last several cycles,” says veteran lender and CEO Ed O’Leary. Each week in his blog he strives to fix that. "There’s really not much that indicates we’ve learned anything new over the last several cycles,” says veteran lender and CEO Ed O’Leary. Each week in his blog he strives to fix that.

Wells Fargo’s recent issues bring the question of whether bankers are salespeople into sharp focus. Should lenders, new accounts people, and product specialists be appropriately considered “salespeople?”

To me, the question is rhetorical. Of course we’re salesmen, whatever else our public and functional titles seem to say.

Banking is a very competitive business. Right now our industry faces excess physical and professional capacity, as well as equity and liquidity to support a considerable expansion of loans and deposits. We must attract as well as retain business.

And that means selling.

Healthy to revisit and reassess

Perhaps the turmoil at Wells Fargo’s retail bank is calling our attention to things that the entire industry should reevaluate. Questions such as:

• Is our training always hitting the “sweet spot?”

• Are our incentive programs properly calibrated?

• Are we incenting the rights sorts of results—as well as the right sorts of behaviors—in both the product sense and in terms of customer satisfaction?

Another area to reassess is culture. Corporate cultures form the environment within which most individuals react in a predisposed way according to the internal behavioral norms of the company. Do your company’s statements on mission, vision, and values honestly describe the culture as it currently exists? [See my previous blog, “How to make ideals engage reality”] 

I suspect that it’s time for very broad introspection among all bankers. In less than a generation, the number of insured depositories has shrunk by nearly half. The average assets size has mushroomed as a result of the organic growth of our economy and the consolidation of institutions.

Could it be that some outdated ideas are haunting our workplaces and inhibiting both personal and institutional performance? Or have we simply failed to recognize that longstanding practices have evolved?

My own “sales journey”

As a young commercial lending officer at The Bank of New York, I was expected to sell and selling was systemic to my job, my salary, and my advancement.

Here’s what I mean by selling:

I had to sell prospects on doing business with my bank. I was expected to develop new loan and deposit business. The idea in those days was that the way to expand deposits was to make loans. (We got away from that idea as an industry in the 1980s and 1990s but it’s making a comeback as an operative principle.)

Once my prospect was my customer, there were lots of products that my bank offered that could be used to enhance the relationships in mutual ways.

We recognize these values today as “relationship banking.”

Bankers have a two-faceted advocacy role, here. In the relationship sense, every lender represents the customer’s interests within the bank in the context of the bank’s credit committee. Banks don’t make every loan presented for consideration. Bank credit is rationed and only the “best” deals in the sense of safety and soundness, profitability, and cross-selling potential make it through the process.

So, I “got” sales pretty early. My first sense that perhaps there was another view of whether or not we were salesmen came as I observed the impacts of bank acquisitions.

My banking company in Florida was engaged in building a powerful retail presence across the state and was aggressive in acquiring community banks. These acquisitions built market share and allowed us to compete with the large money center banks who were poaching our larger customers.

The acquisitions were beneficial and attractive for the owners of these banks. The deals gave their closely held stock liquidity, in the form of shares listed on the NY Stock Exchange.

Yet for the people who joined us from the rank and file of those banks, the expectation of “selling” was often an unfamiliar concept. It became important to acknowledge how different their attitudes were and how they occasionally struggled to understand their new environment.

Our local competitors and we worked hard to provide formal sales training and developed incentive programs that stimulated the sorts of activities that we wanted.

As a regional credit administrator, one of my duties was to establish formal commercial in-house training for the newly acquired affiliate bank lenders. I ran several weeklong programs a year and it was one of the most fun jobs I can remember as a staff credit person.

Without sales, where will business come from?

Banks are not static businesses. There is activity virtually daily in every segment of our balance sheets.

Loans are amortizing and maturing. Deposits are flowing in and out. Our customers move or die. And their respective needs ebb and flow with the condition of the local economy. Nothing stands still.

So it seems evident to me that we are expected to sell. Yet the resistance to being considered a “salesman” seems to arise from a basic misunderstanding of what we’re supposed to do.

We’re dealing with human beings and if a bank employee doesn’t like a sales or customer contact environment, there are plenty of different non-customer contact job descriptions needed to make the institution run.

I know first hand that some managers of very large, multi-state institutions consider such resistance to sales as a sign of laziness. That’s unfortunate, because to the extent it may be true, then there are genuine opportunities being missed.

Let me emphasize that I’m not talking about the retail push to sell checking accounts, safety deposit boxes, credit cards, and home equity lines. Rather, it’s the nurturing of the entire relationship along with the occasionally gritty work of problem solving on day-to-day snafus; making personal calls on customers in their places of business; and monitoring the vital signs of the borrower to assure a constant level of credit soundness.

This is creative work. It requires interpersonal skills and deep product knowledge.

We are fortunate that this is not a zero sum game. The better we do our jobs, the more benefit we help bring to our communities, stockholders, and employees.

Ed O’Leary

Banking Exchange Contributing Editor Ed O'Leary, a veteran lender and workout expert, spent nearly 50 years in bank commercial credit and related functions, working with both major banks as well as community banking institutions. His last job before retiring was as the CEO of a regional bank headquartered in Alburquerque, N.M. He earned his workout spurs in the dark days of the 1980s and early 1990s in both oil patch and commercial real estate lending. O'Leary began his banking career at The Bank of New York in 1964, and worked at banks in Florida, Texas, Oklahoma, and New Mexico. He served as a faculty member and thesis advisor at ABA's Stonier Graduate School of Banking for more than two decades, and served as long as a faculty member for ABA's undergraduate and graduate commercial lending schools. Today he works as a consultant and expert witness, and serves as instructor for ABA e-learning courses. You can e-mail him at [email protected]. O'Leary's website can be found at

In mid-2016 O'Leary's "Talking Credit" blog received a bronze excellence award for the Northeastern Region from the American Society of Business Publication Editors.

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