How KeyBank Competes in the Age of Giants and Disruptors

Jim Marous (00:11):

Thank you. I don't have to introduce myself. It's been done 20 times. Really happy you made it here today. Our next guest in the live podcast recording is Victor Alexander from KeyBank. He's the head of consumer banking.

Jim Marous (00:27):

Little dynamic about KeyBank, it's from my hometown of Cleveland, Ohio, and they're a mid-size organization. We're going to talk a little bit about how does a smaller organization generate new business? How do they stand out? How do they differentiate in a marketplace that truly is being dominated by the big players? How do you strategize? How do you get employees behind it? How do you get people excited?

Jim Marous (00:57):

I want to say thank before we get too long into this, Naehas for sponsoring this podcast series. Each one of these are being recorded. They will be put on our podcast channel, both the video at YouTube and the audio on all podcast channels.

Jim Marous (01:11):

If you haven't listened to Banking Transformed Podcast, I'll do a shameless plug and say, please listen to a couple of mine. We've had some really, really special guests. I'm very proud, and as some people know, this is my education. This is how I keep on top of what's going on as I ask people to speak to me about what they're doing so I can learn about what's going on in the industry.

Jim Marous (01:32):

So, thank you for being here. I now want to introduce my guest, Victor. So, Victor, it's always good to start at the beginning. So, you've been at KeyBank for a long time, since you were like 12, right?

Victor Alexander (01:46):

Pretty much. 20.

Jim Marous (01:48):

Yeah. There we go. But interestingly, you didn't go what I would consider a normal path to be now the head of consumer banking in KeyBank. Can you give me a little background on what your path was?

Victor Alexander (02:02):

Sure. Yeah. And I don't recommend it, though it's been a crazy fun ride, but you probably wouldn't have planned it in advance. So, Key's been just wonderful for me. As I mentioned, I started as a 20-year-old summer intern, not knowing investment banking business, and I remember at the time I had to go to the library. This was before podcasts and YouTube and such. And even kind of look up what investment banking was, once I got the job, I had to really sort of get-

Jim Marous (02:25):

Was that right out of university?

Victor Alexander (02:26):

A prep for myself. It was, actually during college and then after school. So, I kind of figured it out. But worked in our investment banking business for a while. Had a bunch of jobs in finance, which were really fun. I was running mergers and acquisitions for the company when we acquired First Niagara, which was the largest bank transaction that we've ever done in our 200-year history.

Victor Alexander (02:46):

We just celebrated that over the weekend, which was also a lot of fun. Got to work on the integration of that afterwards, which is a really nice operational experience, cultural experience, just learning how to bring two businesses together for the benefit of our clients and our teammates and our communities, which was wonderful.

Victor Alexander (03:03):

Was treasurer following that run, ran the mortgage business. Then I've had the privilege of working in our consumer business and leading that business. I'm in my sixth year now, but yeah, I've never worked at a branch a day in my life, but I've been around the bank and certainly having a lot of fun today.

Jim Marous (03:18):

So, put it in perspective, when you started at Key, do you remember how many branches KeyBank had, roughly?

Victor Alexander (03:27):

I think we would've had 1200-ish, something like that. We have 950 today. So, when we acquired First Niagara, they had 400. So, there would've been a time when the combined institution would've had probably 1500. We would've taken some of those out kind of concurrent with closing, but we're down to 950 today and we're selling more than we ever have before. We're taking better care of our clients they ever before. So, it's just an interesting way the world's evolved.

Jim Marous (03:55):

It's interesting, again, banking's changed so much with all kinds of mergers and acquisitions, and when I started in banking in Cleveland as a competitor of then it was Society for Savings, before it became Key Bank, they were not the biggest bank in town. There were two others that were bigger, both Cleveland Trust, which became Ameritrust, which became did you say I got a key bank? Yeah, KeyBank.

Victor Alexander (04:17):

All roads lead to key, Jim.

Jim Marous (04:18):

These are all 50, 60 branch entities. I mentioned that because the evolution over decades has changed so much. But I talk about the fact that the focus has not changed. When I started banking 47 years ago, we still said we want to look after the customer.

Jim Marous (04:40):

We didn't have digital; we didn't have ATMs. They introduced ATMs when I was at my second organization I worked at, and each one of those steps was, this will save money. And it's interesting how that dynamic hasn't changed in banking. This will save money. It'll allow us to get rid of some of the customer contact things.

Jim Marous (04:58):

All it did was gave consumers more options for doing their transactions and actually move people to a very transactional focus. The only transaction that we were guaranteed every month was people had to come in to get their passbooks updated and to find out how much money they earned in their interest. There was no direct deposit at the time. That was a major transformation.

Jim Marous (05:20):

But as all this evolution has taken place, our focus on reaching the consumer where they want to be is a major initiative. KeyBank pretty quietly, in many cases, really took it upon themselves to leverage data multiple decades ago and build a data warehouse that will allow them to address consumer needs. What advantage does KeyBank have in the marketplace internally to be able to build specialized solutions?

Victor Alexander (05:56):

Yeah, sure. A lot there. I think first off, Jim, and you said it at the beginning, I think, one of our mantras as a bank is, and this is directly from our CEO, is focus propels growth. And so, it really is this notion of, hey, not trying to be all things to all people, picking your spots, doing fewer things better has really helped us execute today. And kind of certainly over time.

Victor Alexander (06:20):

And then as you say, okay, so we got to be focused. What are the few things that we want to be really good at? Client experience is one of them, and how can we be, to your point, not just there for client's transactions, and make that as easy as possible so the client can do whatever they want on their terms. But increasingly, how can we go above and beyond, how can we, in the case, we have a banker in front of a client, how can we do it with a smile?

Victor Alexander (06:42):

So, the person leaves feeling like, "Okay, I got done whatever I got done, but I feel really good about the level of service I received." Ideally, maybe really even in that same interaction, giving a bit of advice, that can be led or fed with data analytics and insights. Like, how do we know what the next best thing to talk to our client is? Or how can we be proactive in helping meet the needs of the client?

Victor Alexander (07:02):

So, we've really tried to say, okay, want to pick our spots, client experience is one of those. And then it's, yes. How can we use data and analytics and insights and what we know? And one of the real luxuries of being a 200-year-old financial institution is we have a few million clients, that have banked with us for a long time.

Victor Alexander (07:20):

And in many cases, we're the client's primary bank. And when we are, when we're privileged enough to serve in that capacity, we know a lot about our clients. Today's tax day. So, we know exactly who paid their taxes today, who's gotten a big refund over the last couple months.

Victor Alexander (07:36):

We're talking right now. I was talking to our head of small business earlier this week, and we're really looking at which of our business banking clients maybe have been making payments overseas, with all of the tariff stuff going on. They're probably importing.

Victor Alexander (07:49):

Well then, that's a great client to everyone — I want our bankers talking to every one of those clients right now. Because they're thinking through, oh, gah-lee, given what happened in the world in the last two weeks, how are they thinking about their business and how can we help them, and help that business' cash flow and help that business owner.

Victor Alexander (08:06):

And all of that, the tax return, the imports, data's everywhere in our business. And really trying to pick those spots where we want to take signal from the noise and then deliver it to bankers or clients or directly to clients through a digital touch. That's really what we've been trying to do.

Victor Alexander (08:24):

And I would say each year we get better and better at it. But we can always be better. There's always more we can do. And we find that really motivational.

Jim Marous (08:34):

So, you came in the consumer banking space six years ago, you mentioned, pre-COVID.

Victor Alexander (08:39):

Yep, right at the start of it, that was like, welcome to consumer, here's this bio virus no one's ever heard about before.

Jim Marous (08:46):

So, you had to shut down. You worked from a non-branch environment, and-

Victor Alexander (08:53):

But only for a little bit. And this is a good example of that. I'm sorry to cut you off, but like-

Jim Marous (08:57):

Yeah, no, good.

Victor Alexander (08:57):

We were one of the very first banks to reopen our branches. And that was really important to me because I said big mantra for me is crazy good service. And I say, it's pretty hard to give crazy good service from a closed branch. I didn't even know how to think about that.

Victor Alexander (09:11):

And so, we did what we had to do when it was, whatever, a couple weeks to stop the spread or whatever all that was. But as soon as we could bring people back, we brought people back. Because again, I just felt like that was a really important signal.

Victor Alexander (09:24):

And I'm so grateful for my teammates who were out facing the virus every day in a really uncertain time. But we did it because we said this notion of crazy good service and the client experience is one of our focused areas, and we can't do that ... being open is sort of a foundational thing, got to be there to be there.

Jim Marous (09:43):

At the same time, fintech players became, during these six years, they went from being enemies to being frenemies, to being in some cases, partners or collaborators. And there's still some competitors in that dynamic.

Victor Alexander (09:59):

All of the above. Yeah. Then, and now.

Jim Marous (10:01):

How have you addressed that at Key Bank to stand out? Because at the end of the day, you're not the biggest bank in town, literally and figuratively. You have to punch above your weight, as I mentioned in our preview writeup. You have to actually compete against the fintechs that are in some cases becoming more prominent, but at the same time, the biggest banks in the country. How do you cut out your part of that business and make it so you can win?

Victor Alexander (10:33):

Yeah. I think, some of it goes back to pick your spots. So, and back to this notion of focus propels growth. Where are we trying to win? With whom are we trying to win? What's our opportunity? We can talk about maybe some client segmentation in a little bit.

Victor Alexander (10:47):

But back to the notion of fintechs, to start with is, I think, as Lindsay said yesterday, I agreed with her. I think it's, by and large, they've been really good for the industry and certainly for Key, because they've made all of us better, and in some ways, they've removed friction, they've highlighted longstanding pain points. They've kind of raised the bar for everyone from a client service perspective in what's possible. And I think that's really good and really healthy.

Victor Alexander (11:14):

They've also been accelerators to our business strategy. There's a number of them here that are probably in the audience. Certainly, they're downstairs in the big room that in certain of our businesses, we've taken a solution, something that they do better than us that yeah, we could build.

Victor Alexander (11:28):

But you know what, it would be one of a hundred things that we do, and it's their core mission in life, and they can probably, by virtue of that, do it better and faster. And it's easier for us just to plug in, leverage it across our few million clients and kind of move on.

Victor Alexander (11:43):

And we can pick our spots and focus where we see the best growth opportunity and where we think, hey, owning this part of the client experience is something that's really important to us, and we can partner in an area where that makes more sense. And fintechs have enabled us to do that, and I think we'll continue to do that going forward.

Jim Marous (12:01):

You've also invested in fintechs. You've actually not just partnered with them but acquired them. Can you explain some of those opportunities you've made and how they served your segmentation strategy?

Victor Alexander (12:13):

Sure. Yeah. All of the above. It started I think on our commercial payment side. So, one of the areas we probably … just for those of you that don't know Key real well, 950 branches, coast to coast, we say Portland, Maine to Portland, Oregon, plus up in the great state of Alaska. I get to visit every once in a while. And that's kind of on the retail side.

Victor Alexander (12:31):

And there's three business areas where among the regionals, we probably punched just a little bit above our weight. Our corporate investment banking business. We've got a really nice middle-market-focused investment bank that would have a broader set of capabilities than many banks our size. We've got a scaled wealth management business. So, we manage $60 billion, at least we did a few weeks ago on behalf of our clients.

Victor Alexander (12:54):

And we've got a scaled commercial payments business. So, really helping in many cases, the middle market and the larger clients move money around and run their businesses a little bit better every day. Those areas where we punch above our weight.

Victor Alexander (13:09):

And I think our first foray into fintech was really on the back of that commercial payments franchise. We just had some opportunities to, initially we saw capabilities that would make our clients better. Just like I was speaking on the consumer side earlier, hey, this firm's doing something attacking a need that, yeah we could probably do it. It would take us time and money and effort and distract from something else. And these guys are already way ahead of us. What they have is a really good capability. We think we could really scale it across our client base.

Victor Alexander (13:37):

So, you start with that, and the conversation just evolves, "Hey, do you want to partner?" Sometimes there's opportunities to, yeah, no, let's — they were looking for an investment partner. Let's make an investment. It's a way to kind of increase our exposure, increase our connectivity to the business.

Victor Alexander (13:51):

In some cases, we got a formal board seat or board observer. So, it's a nice way for us to help that business grow also for us to kind of observe how it is they go about their business. And those by and large opportunities have worked well for us. And so, it's about the client need and the opportunity. And then the transactions can take different structures depending on what both parties are looking for.

Jim Marous (14:14):

You also have a very active business in the medical community.

Victor Alexander (14:17):

We do.

Jim Marous (14:18):

And I don't know if that falls under the commercial small business and probably consumer. And how did you do that, and what moved you toward that direction? Because that's been in place for a while. This is not a new initiative.

Victor Alexander (14:32):

Correct. Yeah. We bought a business called Laurel Road in 2019. At the time it was largely a student loan refinance platform for largely doctors and dentists. So, mostly it was a physician, kind of medical focused student lending business. Again, that was five or six years ago.

Victor Alexander (14:50):

And we've over time invested in that business to kind of broaden the product set where it's today, a national digital bank, again, large healthcare focus, still student loan refinance is an important product, but it's got a full suite of deposit products, savings products who can help really anyone as the forgiveness programs have been sort of created by the government over the last few years. We can help advise people that have student debt on those circumstances as well.

Jim Marous (15:22):

How are you segmenting and looking at the overall consumer business outside of Laurel Road? And how are you looking at, you mentioned earlier trying to put the focus towards the different segments where you can win the battles.

Victor Alexander (15:37):

Yeah. And we do have to be focused, and we have to be able to move the ball forward. Again, I got 950 branches in 15 states, and I need them all to kind of take steps forward every day. For our clients, that's our charge. One example that we've invested in recently, and again, it's a compliment to the healthcare strategies we've invested in the mass affluent business.

Victor Alexander (16:01):

And that was something where again, I ran the mortgage business in 2019. I knew we had a lot of clients that had a need for a jumbo mortgage. And by mass affluent, we would define that as a family that would have somewhere between typically 250,000 and $2 million of investible assets. So, I don't know if that's right, wrong or indifferent, but that would be kind of our definition.

Victor Alexander (16:22):

And as I mentioned, we've been around 200 years. We've had mass affluent clients in and out of every one of those 950 branches for probably much of that timeframe. But we never really had anything either in our retail franchise or in our wealth franchise, never had anything special for them.

Victor Alexander (16:40):

They just had kind of the sort of whatever the stock offering was, and we said, "Hey, I think there's an opportunity to be better." And so, with great partnership from the wealth and our retail business, we built something that was new, we branded it, new banking suite, new wealth management offering, really piped down a lot of the capabilities of our scaled private banking business, which was really sophisticated and have a lot of people that have a view on the market and are putting out great intellectual content every day, really helping our clients with plans.

Victor Alexander (17:11):

Previously, we just didn't connect any of that to our mass affluent customer base. We've done that and more over the last couple years. Some hiring, some focus, just kind of everything you would do. You had a focus strategy on a client segment, and we launched it roughly two years ago. And it's been a really nice growth opportunity for us.

Victor Alexander (17:27):

So, continuing to add a thousand or more clients a month signing up for this program. And what's even better is they're not just signing up for it, but they're increasing their relationship with Key by reasonably significant amounts in either a expanded depository relationship or an expanded investment relationship. And we think we're still in the early innings of that.

Jim Marous (17:48):

So, if I was to ask anybody in the room here today, what is one of their core things they have to work on? They're going to talk about generating new customers, trying to build the customer base.

Jim Marous (17:59):

How is KeyBank doing things differently to grow your customer base at a time when we still have the same number of people out there, and we also see a lot of silent attrition. We get caught in this hole. We don't see much attrition because people don't close the accounts the way they used to.

Jim Marous (18:17):

We see a lot of people though, and I do the raise your hands if you've closed a major primary financial relationship in the last five years, nobody raised their hands. How many of you opened a new relationship at a non-traditional or another financial institution? Everybody raised their hands the last two years.

Jim Marous (18:32):

How do you get more than your share in the new account openings, but also in the onboarding and the growth relationship, organic growth?

Victor Alexander (18:39):

Yeah. We spend a lot of time thinking about that. And I think, combination of a lot of what I talked about, I think, so picking your spots and having something that's good like our massive affluent offering, most of our growth is with existing clients, but it's been a nice source of new to bank households and new to bank investment households in particular.

Victor Alexander (19:01):

And when we get someone to invest with us for the first time, we've been really pleased with the results of the focus as a deepening effort. It's three times as good when they're a first-time investor, when they're that new to bank investment household.

Victor Alexander (19:14):

So, in some cases it's, hey, taking what we have and turning it onto prospects. We've tried to get our branch managers to be more external, so especially in small business, to kind of get out and take the story of Key and take the story of our capabilities and our solutions like on the street.

Victor Alexander (19:35):

The nice thing, and I think this applies in small business, I think it applies in investments. I think it applies everywhere. People, in some cases, they have a bank, but they don't always have a banker. And the person hasn't always checked in on them. They might not have a current financial plan.

Victor Alexander (19:47):

And so, what we find is just being out there, giving good service, leading with ideas and advice, and just the act of kind of getting in the game, trying to get in the game more, has created opportunities that otherwise don't happen if you kind of stay in the four walls and let the game come to you.

Victor Alexander (20:02):

We're better than we've ever been. I'm looking at some of our product and marketing folks here in the second row. We're better than we've ever been at our marketing efficacy where we can actually get more done with less dollars from an acquisition perspective.

Victor Alexander (20:14):

And then the last thing that we really focus on is, and back to this notion of like being really good and crazy good service is when we get an opportunity, we try to make the most of it. And so, when we get those new clients, one thing we're finding today is that we're doing a much better job year after year after year of deepening with them and of retaining them.

Victor Alexander (20:34):

So, our new clients today, meaningfully more likely to have a second product, have an active checking account, maybe have a third product meaningful, more likely to be here six months, 12 months, 24 months from now than they would've been just a few years ago.

Victor Alexander (20:51):

So, it's kind of trying to drive more into the top. And then at the moment of client capture, really trying to do a better job of deepening the relationship at the outset and over time.

Jim Marous (21:04):

What's your biggest challenge today at KeyBank from the standpoint of consumer banking?

Victor Alexander (21:11):

I got a lot of gray hairs, Jim, more than I had a few years ago. Look, I think it's that notion of like picking our spots. We're a big enough bank, we're $185 billion bank, we can invest in anything we want. There isn't a client segment we couldn't say, "Hey, you know what, if that's our best idea, we could run hard at that and we could do a really good job."

Victor Alexander (21:31):

But our challenge is we can't aim at everything.

Jim Marous (21:35):

Pick your battles.

Victor Alexander (21:35):

Right, we got to pick our spots. And that means we have to say no to some good ideas too. And so, even with some of my teammates this morning talking about some stuff, and sometimes we have to say, "Hey, that's a great idea, but that's not today's idea."

Victor Alexander (21:48):

You know what I mean? Put that on the plate. We're going to do that in a year. We're going to do that in two years. We're going to do this other thing right now because this is the right idea for now. And we'll kind of leg our way into that.

Victor Alexander (21:57):

So, I just think, in my world and having the businesses we have, the client base we have, there's no shortage of things we can do, we think kind of low hanging fruit to make our business better. But we can't do it all at once. We just have to be reasonable and pick our spots and execute well. And would always said rather do kind of fewer things better than trying to reach for that one more thing. And you make a mess of what you're trying to do.

Jim Marous (22:23):

You're the first person who's been on the stage this week who's used the word branch as much as you have since you've been out here. You obviously believe in the branches, you have a good distribution network, but it's not a branch for nothing.

Jim Marous (22:35):

How are you balancing the physical versus the digital? And how do you position KeyBank overall in the consumer marketplace for what that provides? Because obviously we're being challenged every day on the cost structure of branches versus the digital competitors, but on the other hand, that's a competitive advantage. How are you looking at it as you go forward? The role of branches versus digital? Is it going to be changing going forward, do you think?

Victor Alexander (23:01):

I mean, it's a balance. And I want both. Our best clients, I'm one of them, the folks in the second row there, all of them. We use all of our channels. I want our clients to be digitally active. If they open the account in their living room, that's great.

Victor Alexander (23:13):

But you know what, if they do that on a Saturday, I want them to get a call from a banker on Monday morning saying, "Hey, I'm the branch manager down the street. Welcome to Key. Do you have any questions?" I want them to get a call three weeks later from the branch, and I want them to go use the branch at some point in time.

Victor Alexander (23:28):

Because the reality is we want to be able to meet our clients where they are, but when we can engage clients across channels, and especially when we can get a really good banker with some good advice and service, I think that just increases our opportunity exponentially we see that.

Victor Alexander (23:46):

So, we like kind of all of the above. And a lot of our client acquisition today and some of the marketing I referenced, some of it drives clients into a branch. Some of it gets them to open the account digitally. In both cases it's great, but no matter how they open it, if you open it in the branch, I still want you to walk out of that branch with the mobile app downloaded. So, that you can engage with us digitally and get the benefit of all we can do there.

Victor Alexander (24:08):

And if you happen to open digitally, that's great. I'd love it if you walked into a branch sometimes so that you could meet the branch manager, meet the banker, and we can kind of establish the relationship that way. We want to try to do both.

Jim Marous (24:18):

How are you leveraging data and insights within KeyBank to make the banking consumer banking experience better?

Victor Alexander (24:28):

Yeah, I mean, it's all different ways. Like a couple of examples I walked through earlier with the small businesses and tariffs. There's so many things we can know about our clients, especially the more engaged they are with us, the more we can know about them, and the more ways we can provide value back.

Victor Alexander (24:46):

The more we can see in their transaction history. And we're continuing to invest increasingly digital in ways to give clients more digital nudges and touches based on their relationship, based on what we see. "Hey, Jim, did you know this, that, or the other thing?"

Victor Alexander (25:00):

And all of that is underlied by data analytics. And then can we turn that data into some actionable insight that we can deliver to a client, either through a banker or increasingly just through a digital touch in the app or otherwise?

Jim Marous (25:17):

How do you see AI playing out at the banking level? Because we talk about personalization, you're doing segmentation and moving towards more personalized experiences, but you have to balance that with the legal and the risk and all the issues of privacy. How are you balancing that? Or how do you see that working within KeyBank in a way that the consumer actually builds trust?

Victor Alexander (25:43):

Yeah, yeah, I think the potential of AI and I've had the privilege of hearing from people that are far smarter than I am in technology. And what's struck me, one of the most striking things to me was there was a gentleman who's very, very credible in the tech space.

Victor Alexander (26:00):

And he said, the thing about AI is however good it is today, it's 10,000 times better than it was a year or two ago, and it's going to be 10,000 times better than that a year or two now. Just the pace of change in the acceleration and that kind of is hard for me to even think about, 10,000 times, 10,000, just the compounding rate that it's going to improve. So, I think the potential is tremendous, and I think we're just scratching the surface.

Victor Alexander (26:26):

I'd say what we've tried to do, at least initially in sort of our surface use cases, is trying to use it to make our folks better off. So, in the contact center, internal, external, how can I get the information I need faster so that I can play something back to a client faster?

Victor Alexander (26:42):

We have a chatbot in our mobile app that we've engaged and enabled, and clients are increasingly utilizing that instead of picking up the phone and calling the contact center. Again, it just enables our clients to get information faster and on their terms. And that's something we like.

Victor Alexander (26:59):

But as I look forward and back to this notion of data and insights and all that we can know about our clients, I think there will be a way for us to use AI and the scale and the power of AI, to look at all that's happening every day, and then help us drive an actionable insight to a client digitally, physically, something. That's where I think it's going. And I think it'll get there in the reasonably near future.

Jim Marous (27:24):

So, when you look at the whole world of AI and generative AI and whatever's going forward, we hear a lot about wanting to personalize the experience, but most organizations still are using AI to build efficiencies. Take traditional bank take costs out before you're building the experience better. As much as we talk about it.

Jim Marous (27:45):

How successful has that been at KeyBank on the consumer side to be able to not only take costs out, but actually work where the consumer feels like you're showing some empathy, you're working out for their wellness?

Victor Alexander (27:56):

Yeah, I mean, I would say for us, I wouldn't say AI has been a significant driver of cost reduction. We've done a bunch of stuff to manage cost in the business. I'm not sure I would say that's been AI driven yet. When I think about AI, I'm trying to think about it, let's imagine it 10,000 times better or 10,000 times 10,000 times better and not that long.

Victor Alexander (28:20):

For us to look out 18 months, three years, put a plan together, that's what we do. And so, think about where that perk's going. Think about what we're going to have and how can we really use it to transform the growth of our business.

Victor Alexander (28:32):

So, I'm much more interested in its potential as a growth driver than I am as a driver of cost reduction. We'll look at both. And some of the early use cases we have are kind of cost and efficiency side, but they're not hugely significant from that perspective. And so, like I said, I'm just more interested in sort of the offensive potential and potential to really take it to make our clients' lives better and easier.

Jim Marous (28:58):

How do you make your brand come alive at all levels, at every channel? Because the challenge we have now is we have so many channels and it's sometimes hard to resonate across all channels, the same feeling. And we're trying to keep it human while we're going digital. But how do you work and how do you work with your marketing team to make it so that that brand resonates at every touch point?

Victor Alexander (29:26):

Yeah. When you ask me that question, I'm thinking of our mascot that is the key, it walks around and dances and stuff. So, we do have an alive key.

Victor Alexander (29:36):

But look, I think what we really try to do is first off, we have to stand for something, and when I even first got this job, we were talking about marketing and back to this notion of focus propels growth, pick your spots. It's really important to me that service becomes one of those spots.

Victor Alexander (29:56):

That I want our clients to really say, "Hey, you know what? I like Key, I like the color red is fine. Their branches are reasonably convenient to my house. They look okay on the outside, their app is great, but you know what, they take really good care of me, and I really value the advice that they give. If I have a problem, they're really quick to resolve it. They're being proactive."

Victor Alexander (30:17):

That's really what I want them to say. And as we do that and as we drive consistency there, then we have something that our marketing partners can actually market. You know what I mean? So, first we have to pick spots back to the mass affluent, I think we stand for something there, and we have something that okay, can be marketed effectively.

Victor Alexander (30:37):

And that's what we're trying to do, kind of across the breadth of the business so that then we can make the key mean the same thing in 15 states from coast to coast.

Jim Marous (30:48):

Do you distribute the data and insights across your different touchpoints? I mean, the call center, the branch, do they have access to information that makes their job easier to serve the customer at Key?

Victor Alexander (31:02):

Yes. Yeah. And that's where AI helps a little bit. I mean, that's one way, especially in the call center where we can help the agents. Because our agents, that's a tough job. Lots of systems, as you might imagine built up over a couple hundred years. It can help our agents get the information faster, you know, so that they can serve the client faster.

Victor Alexander (31:19):

And it's not as much okay, go screen to screen, when you sit with a contact center agent, you have a lot of empathy, that's a very, very challenging job. And so, we've tried to use AI and other technologies just to help them work easier and be a little more efficient for clients.

Jim Marous (31:35):

How do you sell that internally? Because obviously there's risks associated with that. There's privacy, there's all these other things. Not every organization has the leadership that will allow that information to be distributed at this time. We're still challenged at some organizations. How does your organization look towards that sharing of insights?

Victor Alexander (31:57):

I mean, I think one thing we're able to do well by virtue of our size is we're a big enough place to have lots of all the products and solutions and great businesses I talked about earlier and great data and insight and capabilities.

Victor Alexander (32:09):

But we're also small enough where as executives we meet every Tuesday as a senior management team, but even a level down, we can convene the people we need. Most of them still are working in Cleveland and we can come together and talk about it.

Victor Alexander (32:22):

"Hey, here's what we want to go do, here's why." Maybe we pilot it. Maybe we don't, but we can bring the right folks together pretty easily. And some of the folks that work for me that maybe came from a larger institution would say, "Boy, that's a real advantage of working at Key."

Victor Alexander (32:38):

Because now I can actually, if I want to push on something or challenge something or do something a little bit different, I can actually get the folks around the table who are needed to get that done. And maybe we get it done, maybe we don't for whatever reason, but at least we can have the discussion in ways that maybe don't happen or are much harder to happen at a larger institution.

Jim Marous (32:55):

Well, it's interesting because we've talked in all of our podcasts about leadership and culture. One thing that's very interesting, again, I have a closeup view of it, is your leadership at the top of Key over the last 20 years and even more, have not been too different from each other. They all have built a reputation as being fighters, in a good way. They realize your position in the marketplace is not top dog. And you have to find the fights you want to fight and the ways you want to do that.

Jim Marous (33:29):

But they also — you have an innovative spirit. How do you have that transcend across the organization so that employees across the organization can help move that innovation forward, that innovation ideas?

Victor Alexander (33:45):

Yeah, I think, so first off, I think you're right on our leaders, I've been privileged to work under three CEOs, and I think all of them have been really exceptional leaders and they've given me personally some tremendous opportunities.

Victor Alexander (33:56):

But more importantly, they've just created a cast, a great shadow out of the organization. And created a lot of followership and set the right strategies and enabled us to execute.

Victor Alexander (34:08):

What I try to do is I try and it gets back to this notion of big enough to be interesting and have a lot of scale and a lot of opportunities, but small enough to get around the table and share good ideas as we just try to foster a culture of like, "Hey, if you have a good idea, if you have an idea to make our business better, escalate that." Let's bring it up and talk about it.

Victor Alexander (34:28):

And we really do a lot with, whether it's new employees spending time with them at the senior leadership level, or I'm on the road a third of the time probably I'm out in branches, I'm out talking to our branch managers. I try to get in front of every branch manager once a year in some big form, little form, whatever.

Victor Alexander (34:45):

And if people have an idea to make the business better, we want to hear about it, and we share that success and we recognize it. And if there's something we can do to make, whether it's a client situation or something broader across the business, we try to get those ideas bubbled up. We try to make sure at the top that we're fostering an environment where those things do bubble up, and when they do, we don't miss them. You know what I mean?

Victor Alexander (35:05):

And we listen and we're quick to act and try to do that. And I think that's been a big enabler. I mean, I always feel like the answers, the right answers known to a lot of people who are in the business every day. We just have to listen to those good ideas, pick our spots, do them, and do them well.

Jim Marous (35:22):

And when we started the discussion, we talked about your career path, and you discussed the fact that it wasn't a traditional career path. You didn't start in the branch, you weren't a teller. You also moved from different areas of the organization into the consumer spot.

Jim Marous (35:36):

I worked for an organization that had the same dynamic where a person who was not involved in the consumer banking space, moved to consumer at almost the same time as somebody else who wasn't used to the retail side, moved into average at that time it was called advertising. Two dynamics that bring completely different view on the business, no matter how close you were to the consumer side.

Jim Marous (36:01):

What surprises have you had along the way that you go, "Geez, I didn't kind of see it this way," but good or bad surprises, it can happen both ways, but what's the surprise you about the role and the responsibility of consumer banking side of the business?

Victor Alexander (36:16):

I mean, I think the biggest, I don't know if it's a surprise, but I just think this business is a ton of fun. I really do. I think, and I have great respect for all the teams here, but really, especially our folks who are in the branches, I know talked about the branches, but we have 6,000 folks in the branches every day.

Victor Alexander (36:33):

They show up and their passion, their care for their community, for our clients, for doing the right thing for facing the virus, you know, in 2020, like when we wouldn't have to do it just to take great care of our clients kind of day in and day out is just, I don't know. Really seeing that up close has been a real privilege and pleasure.

Victor Alexander (36:58):

And I get huge motivation by, what can I do to help make that person's life easier? You know what I mean? To help, so that branch manager actually can go out and call on an extra small business prospect or two this week.

Victor Alexander (37:08):

Instead of dealing with the paperwork or bureaucracy or something else that comes down on him or her from Cleveland. How can we free them up to go do what they're great at? Which is being out there, being the face of Key, being the brand for Key and really engaging with clients and prospects on all the things we can do to help them, to help make them better.

Victor Alexander (37:28):

And that's been a ton of fun. I've enjoyed working with new teammates across the bank in different ways. And I think, I've had a bunch of jobs at the bank. This is by far and away the most fun I've ever had.

Jim Marous (37:40):

What keeps you up at night?

Victor Alexander (37:43):

I'm sleeping okay.

Jim Marous (37:44):

That's not a personal question, just within the bank.

Victor Alexander (37:47):

No, I get it. I get it.

Jim Marous (37:49):

I'm wearing my Oura ring. I can tell you what keeps me up at night.

Victor Alexander (37:53):

Yeah. Look, I think it's this notion of, I mean, it's kind of what I said earlier, which is, it is just like, are we pick in the right spots? Are we executing well? And really just trying to make sure, hey, this is the right kind of sequence. This is the right next thing we can do.

Victor Alexander (38:10):

We have incredible potential. And I got incredible people in our organization who can do a lot and just making sure we're all focused on the right spots, rowing in the same direction, have an impact. And I'm the one that sometimes gets to say, "Okay, now we're going to pivot," and just making sure we make the right pivots at the right time to continue to be great stewards of this 200-year-old franchise. We want to make it through the next 200.

Jim Marous (38:36):

So, this will be resonating maybe just with you and I and the people in the second row, but how much has been based in Cleveland, the fighting attitude that the Midwestern cities have, the Milwaukees, the Pittsburghs, and the Detroits, the Cleveland impact the personality of the Key brand from a stand ... I mean, again, punching above your weight, doing the unexpected. How much does that really transcend the organization? Or does it?

Victor Alexander (39:05):

Yeah, I think it does. I think it does. There's something about cold winters and bad football that I think creates like a — hey, I'm a fan as well, so I've not-

Jim Marous (39:16):

I just got rid of my season tickets, so this is hitting home real bad right now.

Victor Alexander (39:19):

Yeah. Focuses you on the game at hand, the business of our business. But no, I mean, it's been great. And Buffalo, I would throw that right in the mix. A big market for us. And that was where First Niagara was based.

[Music Playing]

Victor Alexander (39:32):

And I do think it creates kind of a can-do spirit and a culture of teamwork and camaraderie and coming together and really wanting to do the right thing. Another thing that we've got from the CEO stability over the years is we really do in our heart of hearts, we want to do the right thing, want to do the right thing for our clients, want to do the right things for our community. We really do believe in that.

Victor Alexander (40:00):

And I think and try to really take as good care of our clients and each other as we possibly can. And I've only lived in Northeast Ohio, so I don't know. But that is a lot like how my neighbors and the way I grew up.

Jim Marous (40:13):

Well, it's interesting is you talk about the fact you have branch from Portland to Portland, and the reality is we have a lot of small financial institutions. I look sometimes at the city as opposed to the organization to see what they're like.

Jim Marous (40:25):

And a lot of organizations are (I'm sorry for the term), in the middle of nowhere, but sometimes taking on the personality of where you are can set you apart. And we sometimes take that for granted because we've lived there in many cases for a lifetime. And I think it's important.

Jim Marous (40:39):

I know it in Key. I know how there are organizations that used to be based in Northeastern Ohio that have moved, and they've changed the personalities of who they are. And you can feel it if you're watching.

Victor Alexander (40:50):

Yeah.

Jim Marous (40:51):

But it also can bode well when you have that attitude as part of what your brand is. And I think-

Victor Alexander (40:58):

We're proud of our roots. I agree.

Jim Marous (40:59):

Exactly. Thank you so much for being on the show today. I appreciate it.

Victor Alexander (41:03):

Jim, thank you. Thank you.

Jim Marous (41:04):

Thank you.

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