President's Message
Nathaniel Tagtow, Vice President City State Bank, and President of the Iowa Trust Association
If you are anything like me, you are always glad to have tax season in the rearview mirror. I know it certainly adds some additional stress around our bank for both staff and customers alike. During the early part of April I always find myself thinking something along the lines of “once we get to May, I’ll have more time to….” However, once tax season is over and the calendar turns to May, the to-do list never seems to get much smaller. There are always new tasks to prioritize, new clients to please, and new fires to put out. Perhaps you have an upcoming regulatory exam at your bank, a new employee you are trying to train, or a particularly difficult file you are working on. Whatever, the case may be, there always appears to be some difficult task(s) on the horizon.
Believe it or not, I do not offer up these introductory comments to complain about our profession. To the contrary, I find the daily challenges of the bank Trust world to be one of the most rewarding parts of the career. To quote one of my favorite movie quotes “It’s supposed to be hard. If it wasn’t hard, everyone would do it. The hard is what makes it great.”
Not only is our work challenging and fulfilling, but it is also filled with many great peers and colleagues. That is one of the reasons that I find the ITA to be such a great organization. The ITA allows for an excellent forum for Trust professionals to share thoughts and ideas that enrich the entire industry. I would certainly encourage anyone who has not participated in our ITA peer groups to consider doing so. At our most recent meeting we covered a wide array of interesting topics including staffing challenges, insight from past regulatory exams, and cryptocurrency, just to name a few. I feel the larger the peer group, the more insightful the discussion tends to be. Please participate if you can and continue to submit topics for discussion that would benefit the ITA. I know those meetings always leave me feeling refreshed and inspired. They also help me to focus on what’s next on my to-do list and to embrace the difficult challenges we face.
I hope to see everyone soon and perhaps some of you at the upcoming MOKAN conference in Kansas City.
2022 Trust Training Scheduled
ITA Fall Conference and Operations Seminar
ITA Fall Conference
September 28-30, West Des Moines
The annual event is a great opportunity for trust professionals to learn about emerging trust issues, network with peers from across the state, and visit with vendors. This seminar is designed for any trust operations staff working in personal trust and estate accounts and wealth management. It is developed at the beginning to intermediate level, but any trust operations staff will gain benefit from the information. For more information see the ITA website.

ITA Trust Operations Seminar
November 2-3, Johnston
This two-day seminar focuses on why trust departments do what they do. As an trust operations professional this seminar will expose you to principles and rules that govern the industry, including regulatory and legal framework within which trust departments and trust companies operate today. This seminar is designed for any trust operations staff working in personal trust and estate accounts and wealth management. It is developed at the beginning to intermediate level, but any trust operations staff will gain benefit from the information. For more information see the ITA website.
Can the Trust Industry Avoid Becoming the Next Blockbuster?
Jeremy Peterson, Accutech Systems Corporation
Do you remember Blockbuster when Netflix disrupted the video rental industry? Over a 3-to-5-year period, customers and the market changed right in front of their brick-and-mortar stores. Blockbuster stood their ground stating they knew their customers did not want to get videos in a box or mail. Customers resoundingly chose the digital approach to renting movies because it was more convenient and easier for them. Blockbuster soon disappeared. Even Redbox, and you’ve likely seen these everywhere, would have won the video rental race!

Identify how the market's demands are changing
Trust and wealth management has historically been a relationship business. Nothing beats face-to-face conversations and the handshake when talking wealth distribution and estate planning. The COVID-19 pandemic and 2020 showed us this is changing. In the MX Study, The State of Banking in 2021, 78% of banking customers prefer mobile as their primary banking preference in 2021. Your customers are interested in and want the convenience of digital tools when managing their wealth, and their interest is only going to grow!
Millennials are posing a big attrition threat to banks. There are no signs of slowing down, and what’s more concerning is there are signs this will only speed up. Of those planning to switch banks in the next two years, 4 out of 5 say they’re currently satisfied with their current bank or credit union. Signs point to they’re leaving for convenience.
The video rental industry already experienced this, and signs are suggesting the trust and wealth industry are poised for a similar shift in priorities.

Embrace modern fintech
Challenger apps and banks like Robinhood and Chime are advancing the industry through digital transformation and focusing on customer experience. And it’s working! Chime Bank grew over 1,000% percent in 2021. Robinhood’s free-trading ethos turned the online brokerage industry on its head. Assets under custody ballooned from $19.2B in March 2020 to over $80B in June 2021!

Retail banking has been providing digital and mobile services for more than a decade, and you can see residential lending catching up. When talking recently to a trust and wealth consultant, he joked “1982 was a great year in the trust/wealth business, and many are still here!” Joking aside, “if it ain’t broke don’t fix it” isn’t going to get us very far in the digital age. While it may work in the office and behind the scenes, if your customers can’t access it or take control where they want, they’ll find someone who will let them. This is one of the many reasons Netflix beat Blockbuster so quickly. Customers didn’t have to worry about going to a video store only to find the movie they really want is gone. They went online and, in a few clicks, knew their movie was there and had it shipped!

Find a modern FinTech provider to help you look ahead at how you can create a complete digital wealth experience for your customers and prepare for the next generation of customers who expect things to be easier and just “work.” Customers can apply for loans, credit cards, open bank and investment accounts, and any number of complex financial tasks online. Can they digitally open trust accounts with your business? Are you looking at a solution provider that has their eyes on 20-30 years in the future?

Get out in front of the great wealth transfer
The Great Wealth Transfer is on the mind of nearly every executive we talk to! Money will be moving to younger, more tech savvy heirs in the next couple decades—with a significant chunk moving in the next 10 years. And they’re not going to wait on trust and wealth managers to make it easy for them.

Knowing this money will be moving to Gen Xers and Millennials, and how they lean towards financial providers with strong digital platforms with frictionless customer experiences, it is very likely most of the money that moves to heirs will also move firms. I recently spoke to a president of an $8 billion trust firm, and he shared a great analogy. He said, “We spent years building a big, beautiful iceberg to the tune of $8B AUM. Now it is melting at an alarming rate, and we must adapt by developing a lake to capture as much of the runoff as possible—or look for a new industry.”

He tasked his leadership team with finding technology that will enable them to continue to serve their existing clients, position themselves to retain the transfer of wealth to heirs and bring in new customers earlier in the wealth journey. The customer’s experience takes priority to keep and win new business, and the efficiencies gained through improve software and integrations will help them in the digital age.

Set the right tone
How do your clients engage with your organization? Is it a brick-and-mortar experience? Are your clients telling you they desire digital tools to manage wealth either verbally or with their actions? Online-only challenger banks are disrupting the market and showing there are easy, convenient ways to manage different stages of wealth.
You only get one chance to make a first impression. Your customer’s digital experience is part of providing excellent customer service so your customers can do online what was once thought as impossible. Kind of like what Netflix did to Blockbuster.
Contribute to the Iowa Trust Association
As a reminder, the Iowa Trust Association welcomes contributors to its quarterly newsletter. If you would like to comment on recent activities in the industry or let us know about an upcoming event that would be of interest to our readers, please feel free to contact Darcy Burnett, at 800-987-7365. Thank you for your interest in our publication and we look forward to hearing from you.

If this message was forwarded to you and you would like to receive the ITA Newsletter, please email Darcy Burnett to subscribe.
Published by Iowa Trust Association.