What’s new in finance and banking?

Thanks to technological advances and evolving customer needs, the financial landscape is rapidly changing. We turned to a panel of experts to learn how New Hampshire residents can benefit from these changes — whether it’s for a personal loan or exploring potential international business markets.

Our experts:

• Polly Saltmarsh, Vice President, Financial Education & Business Development, New Hampshire Federal Credit Union. www.nhfcu.org/
• Chuck Withee, President and Chief Lending Officer, The Provident Bank. www.theprovidentbank.com
• Paul Falvey, President and CEO, Bank of New Hampshire. www.banknh.com
• Scott MacKnight, CEO and President, Triangle Credit Union. www.trianglecu.org
• David Araujo, CEO and President, Service Credit Union. www.servicecu.org

Polly Saltmarsh, Vice President, Financial Education & Business Development, New Hampshire Federal Credit Union

How is a credit union different from a bank?

Saltmarsh: “Credit unions are not-for-profit financial cooperatives that are owned and operated by their members.”

What are some of the benefits of joining a credit union?

Saltmarsh: “The credit union philosophy is ‘people helping people.’ The money you deposit in New Hampshire Federal Credit Union (NHFCU) is the money we use to lend to other members — most often your family members and co-workers. The interest repaid on loans funds the dividends for your savings and pays our operating expenses. You even have a say in how our organization is run by electing our volunteer board of directors. NHFCU is owned by the people we serve — the employees and immediate family members of more than 150 employers and associations throughout New Hampshire. NHFCU also works to assist people with damaged credit, or those who are simply carrying too much debt, with innovative programs designed to boost credit scores and assist with budgeting challenges. At NHFCU, we help people get on track financially and make ends meet.”

What types of financial classes/educational opportunities exist through NHFCU?

Saltmarsh: “NHFCU Centers for Finance & Education in Concord and Lee offer classes that are open to the public. Class topics vary and include:

• Understanding and improving your credit score
• Learning how to get out of ‘paycheck-to-paycheck living’
• Investing — the basics of understanding investments
• Home and car buying
• Planning for retirement

“NHFCU does not sell investment products or services; therefore, there is no sales pitch. Classes are for educational purposes only, that way you have the information to find your way to financial wellness. We even bring complimentary classes to you and your employees at your place of business. Contact us at (603) 224-7731, ext. 330 for more information.  Or, visit our website at nhfcu.org to find out more about upcoming classes.”

Tell us about something new that’s happening at NHFCU.

Saltmarsh: “Our Center for Finance & Education is the heart of what we do. We host financial education classes and offer free one-on-one financial coaching. Classes are open to the public in Concord and Lee, and, as mentioned above, we can even bring classes to you and your employees. ‘We exist to make a positive difference in the lives of those we serve through financial education and services.’”

Chuck Withee, President and Chief Lending Officer, The Provident Bank

How has The Provident Bank expanded its commitment to New Hampshire?

Withee: “We just recently completed the brand new executive offices in New Hampshire at 25 Maplewood Ave. in Portsmouth. The entire executive team is here along with many other key senior leadership positions and we occupy the entire second floor, with approximately 10,000 square feet, along with an efficient branch on the first floor; I think this demonstrates our commitment to New Hampshire. Recently, the American Bankers Magazine published rankings for banks under $1 billion in assets, relative to Commercial & Industrial (C&I) loan portfolio size, based upon objective Call Report Data. The Provident Bank was No. 2 in the country, out of over 5,000 banks, which we are very proud of.

“Why is that important for New Hampshire? A vast majority of these C&I loans provide needed capital and expertise to New Hampshire’s small- and medium-sized businesses. That is important because not every bank, even those that say they offer commercial lending, has the experience of a commercial and industrial bank. The business owner needs detailed and specific commercial loan structures to help them grow and succeed. That’s an important distinction. On another note, we crossed over the $1 billion asset threshold this year. New Hampshire has been a significant region for this growth and that has been predominantly through providing lending capital to small and medium businesses.”

What expertise does The Provident Bank provide local businesses that are looking to achieve a global reach?

Withee: “The world is smaller now. Access to the vast marketplace is very, very important to these small and medium businesses and they can access it. And we’ve developed relationships with the U.S. Department of Commerce and Ex-Im Bank and SBA regarding financing — developing an ecosystem. When these small businesses look to expand internationally, it may seem daunting and the expertise we can bring is not just the financing, which we do bring, but also the introduction to the local folks at the U.S. Department of Commerce, as well as the Small Business Development Center, who have expertise around international business planning; which differs from domestic planning in many ways.

“Also, the U.S. Department of Commerce has the Gold Key Service, where they can help identify potential clients overseas. Once foreign customers are identified and planned around, The Provident Bank can step in and provide unique international financing structures to help sustain growth with needed working capital. The Provident also provides Medium Term loans to international buyers of U.S. capital equipment and related services, which can help New Hampshire businesses that sell that kind of equipment since the financing is very attractive to the foreign buyer.”

What options are available to small companies looking to grow their business?

Withee: “In my view, if a small business really wants to grow, they have three choices: They can continue to grow organically — go find new businesses domestically that need their product and go to trenches and fight it out. The second thing they can do is think differently and go to foreign markets, with the strategies described earlier. Even if they venture to Canada and Mexico, seemingly they’re close to us, but they have the same challenges with traditional financing of international account receivables — they’re still going to have to develop an international working capital line of credit so they don’t outstrip their cash. The third way a company can grow is through acquiring other firms like theirs.

“This is very critical to New Hampshire because there are a couple of things that can happen to a small business when the owner is getting to retirement age but doesn’t have a successor. As we know, this state’s economy, employment is really deeply entrenched in small and medium businesses, so if a large strategic buyer comes in to buy a small business, some things can happen that aren’t positive for us. Oftentimes, large companies just want the customers, so they cut all the staff and move out of the state. If a smaller firm or smart MBA (called searchers) buy the local small business, statistics show that they not only sustain employment and facilities, but they actually grow in both regards; this is materially better for New Hampshire communities. The Provident Bank has unique financing structures to help these acquisitions of smaller firms, by other smaller firms, private equity or searchers.”

What are the most important trends to look for in commercial banking in 2020?

Withee: “In the year ahead, what we’re going to be looking at is continuous improvement, with how our bank operates, to enhance the customer experience. The LEAN culture, developed by Toyota, is typically used by manufacturers, but can be applied to service industries, like banking; and we have embarked on it at The Provident Bank. In short, we ask: How can we take the products and services that we just discussed and make them better for the client to enhance the client experience? An example may be what different things internally can we provide. What back-office things can we do to speed it along?

“But the trends in commercial banking really rely on one thing: what the changing needs of the customer are and what their demands are. Similar to the process that a technology company goes through, which is outside-in innovation. Find out what is desired in the market and then try to address it very specifically with your products and services. This is in contrast with what was done often in the past, which is develop what we think people want and then go to market. We have client 360 meetings and we talk to our clients about what we do well and what are the things they think we should be doing differently or better. From these conversations, we may hear the same thing on a consistent basis; if that happens, it is likely something that we need to innovate around.”

With the current trade climate and imposed tariffs, is now still a good time for a company to expand internationally?

Withee: “Absolutely. Certainly there are increased tariffs, particularly on Chinese goods and services, but that is a grouping of goods and services, not the entirety of it. At the very least, it’s a good time to explore it, because if there are things being tariffed on one side, you might find a way to expand internationally in non-tariff areas to make up for that. It’s absolutely a good strategy and good time to look internationally, probably a better time than most people think. And with tariff awareness, believe it or not, you’re better prepared. Until recently, many business owners did not have tariffs in their equation. However, now that it’s in the forefront, it’s being asked and that’s a good thing; you’ll understand early if there are tariffs and if they will affect your decision to do business in that particular region.”

Paul Falvey, President and CEO, Bank of New Hampshire

How has Bank of New Hampshire evolved the customer experience at its branches?

Falvey: “Over the past few years, Bank of New Hampshire has implemented new technology to include ID scanners, electronic signature pads and cash recyclers.

Customers opening accounts will soon have their IDs scanned and available for picture and signature verification for additional security.

Customers will be able to leave the new account desk complete with a customizable debit card and an active online banking application.

Electronic signature pads offer a paperless solution at account opening.

Cash recyclers eliminate the hand counting of cash as well as increase security for detecting counterfeit currency.

“In order to offer customer service outside the traditional banking hours, we offer 24/7 customer support with our Customer Service Center. Customers are able to report lost or stolen checks and debit cards 24/7. In addition to traditional calls, we also offer 24/7 live chat via our website — BankNH.com. We are creating a more comfortable, open environment for our customers as we update branches by replacing traditional teller lines with workspaces that provide better customer interaction. Employees have been empowered to make decisions when assisting customers, eliminating the need to ask a supervisor in many cases.”

How does Bank of New Hampshire help customers protect themselves from debit card fraud when traveling?

Falvey: “Bank of New Hampshire issues Contactless EMV cards to all of its customers. The EMV chip has made the most significant impact on debit card fraud for the bank. Last year, BNH debit card fraud losses were reduced by 38%, and for 2019, fraud losses have been reduced by 79%.”

What’s unique about/what are the benefits of Prestige Plus membership?

Falvey: “Bank of New Hampshire manages a professional travel club as one of the many benefits for its valued Prestige Plus customers. Access to seminars, day trips and overnight trips are a part of these benefits. Recent trips include: Norway, Italy, South Africa, Croatia, the Albuquerque Balloon Fiesta, Boston Theatre, Conway Scenic Railroad and Bar Harbor, Maine. Trips planned for 2020 include Spain and Portugal, Switzerland and Northern Italy, as well as Christmas in London.

Bank of New Hampshire is one of only a few banks in New England offering a professionally managed travel club.

Bank of New Hampshire’s president and CEO frequently escorts trips. Our customers appreciate being able to travel and get to know our president.

Prestige Plus celebrates 30 years in 2020.

Bank of New Hampshire has a deep commitment to the communities it serves, and we have extended this commitment to the communities we travel to. On a recent trip to the Albuquerque Balloon Fiesta, the Prestige Plus travelers and Bank President were proud to give back through a volunteer effort at a large food depot in New Mexico.”

What are the most important trends to look for in commercial banking, in 2020?

Falvey: “Much is written about disruption in banking due to the profusion of technology and the rise of financial technology companies. While some of the mechanics of banking transactions and service delivery channels certainly have changed and will continue to do so, technology has, in many ways, reinforced the core principle of successful banks, and the key strength of community banks, which is relationship banking. Business owners still value knowledgeable and responsive lenders.

“Inexpensive, readily available technology and the ease of leveraging third party resources has lessened the competitive advantage of large financial institutions in the areas of product offerings, services and digital experience. Clients no longer need to choose between great local service and decision-making and the benefits of easy, efficient access to banking services through leading-edge digital offerings. The latter is a baseline expectation, while the former, especially for commercial and small business clients, is a differentiator.

“In 2020 and beyond, smaller, community-based banks will continue to thrive and expand their commercial presence by pressing their advantages in personal service, relationship banking and connections to the communities they serve.”

Scott MacKnight, CEO, President, Triangle Credit Union

How has Triangle Credit Union changed how it communicates with members?

MacKnight: “Over a year ago, we launched our Making Money Personal Podcast, which has grown tremendously. Our vision for Making Money Personal is to provide financial literacy at the fingertips of the listener, tying into our core value of community. We were the first credit union in the area to implement a podcast that includes information from child identity theft to planning for college costs, and even investment and retirement planning. Most of our episodes feature local industry experts and even some guests from across the country — we’ve really enjoyed each interview and the information is invaluable. Podcasting is a great way to provide on-demand resources from the people who know these topics inside and out. Making Money Personal is available to stream for free from our website, trianglecu.org, or through popular podcast apps including podcasts for Apple devices, Google’s Play Music, Spotify and Podbean.”

How has Triangle Credit Union grown or evolved recently?

MacKnight: “We are getting ready to open our new branch in Merrimack within the next month. It’s exciting to provide thousands of existing members with the convenience of a physical brick-and-mortar branch within their neighborhood. This branch is a pilot for Triangle; we are introducing a smaller footprint and brand-new technology to our existing member experience that will enhance nearly every interaction we have with guests. This promotes our core value of service. Long gone are the days of passbooks. At our new location, members will be able to complete transactions at our new Interactive Teller Machines (ITMs) without needing their debit or ATM card.

“From completing nearly any transaction without leaving their vehicle, to the new look of our branch, members will see advancements everywhere. We’ve evolved our traditional teller and financial service representative positions into a hybrid branch specialist role, so any employee can assist with every need. Our Merrimack branch will also utilize video conferencing, so business owners or homebuyers can speak to a live commercial services representative or mortgage originator at their convenience. It seems like every day we are uncovering more possibilities to engage with our members and reduce friction points to improve their banking experience with us; Merrimack is just the starting point.”

How has Triangle Credit Union evolved its customer experience recently?

MacKnight: “Our lives as consumers have grown increasingly busy and time is a hot commodity, but in addition, our expectations as consumers have changed. Triangle has adopted a new initiative, ‘TCU Go,’ as a catalyst to drive our member experience philosophy. We are using this philosophy to guide strategic decisions around ease of use, convenience and technology. We want Triangle members and guests to be able to complete their banking needs when they want, where they want.

“Our new Merrimack branch and the Making Money Personal Podcast are just a couple of ways we are creating value and expanding our service across the community through ‘TCU Go’ experiences. In addition to our technology adoption, we are always expanding the diversity among our employees to ensure we are best serving the people within our communities. This is not a new evolution of our service — it’s always played an important role in our business practices, but we recently identified that our employee base can currently speak 23 languages. Combining these new technologies with our employee talent, that’s what makes our member experience truly unique.”

David Araujo, CEO and President, Service Credit Union

Who can become a Service Credit Union member, and how is it different from a traditional bank?

Araujo: “Service Credit Union’s field of membership includes anyone who lives or works in New Hampshire, as well as their family, in addition to both present and past members of the military worldwide and their family. Being a member-owned, not-for-profit cooperative means members can combine their savings to create a pool of funds from which other members can borrow. The income earned on loans and other investments is returned to members in the form of higher savings rates, lower loan rates, low to no fees, and additional products and services.

“We recently launched a Primary Savings Account where our members earn 5% APY on the first $500 to help encourage healthy savings. We also have a new free Everyday checking account that rewards our members who have direct deposit with ATM reimbursements, and auto and personal loan discounts. A Service Credit Union member means being an owner of the credit union. We answer to our members, not shareholders, and put our members’ financial needs first.”

Who can take advantage of Service Credit Union’s Military Savings program, and what are the benefits?

Araujo: “Service Credit Union is proud to serve our armed forces, veterans and their families. Any member of one of these groups may qualify for exclusive savings benefits that cater to their specific financial needs. Annually, Service Credit Union participates in the Military Saves program, which focuses on ‘Get Financially Fit, Build Wealth, Not Debt.’ Military Saves is a DOD-wide financial readiness campaign to help, motivate and encourage families to save money every month. The campaign is made up of a growing network of organizations and individuals committed to helping military members address their immediate and long-term needs. As part of this campaign, Service Credit Union offers special giveaways and a Military Saves Account, which provides a special rate on balances up to $3,000 to encourage our military members to save even more.

“Other military benefits include getting paid up to two days early, and auto loan discounts for active and retired military. We also offer the ease of International Bill Pay to pay bills quickly and with confidence in many foreign currencies. Service Credit Union’s V PAY Card, is the European Debit Card, which replaces major credit and debit cards that may carry international fees. The card is preferred in Europe and allows you to transact purchases in Euros.”