Letters From Leton: Y2K (Plus 20)

My how time flies.

20 years ago at this time of year, bankers (including me) were very worried about what would happen when the clock struck midnight on December 31, 1999.

We, like many banks, had literally millions of dollars in cash in our vaults. Some customers had taken their funds out of the bank in cash knowing that the world was coming to an end!

Our IT staff (and others) were at the OPS center. Waiting. Counting down the clock.

At midnight I called the head of IT. All seemed fine. I called our phone service that would tell you your balance. It worked. Finally around 2:00 AM on January 1, 2000, I went to bed. The great Y2K threat passed quietly into history.

In hindsight, the fear of what could happen did not occur. But the changes that came upon our industry in the next 20 years have in some ways been much more disruptive to our industry than our fears of Y2K.

Online and mobile banking. Remote Deposit. Fintech companies without physical branches capturing deposits, loans, and market share.

Customers now shopping online have completely changed the retail landscape. Goodbye Toys R Us. Goodbye so many other stores.

As I reflected on the Y2K effect, I have pondered about what will happen to our industry in the next 20 years.

Will we need physical offices or will we work out of smaller spaces – maybe even our homes – in the banking business?

Will the pace of moving money (our customers now have their payroll and social security direct deposited, as evidenced by diminished office traffic) move to instant transfers? Convenience will grow more and more important to our customers, and they will continue to expect instant gratification of their financial needs.

The banks that survive and thrive will have to be proactive in embracing these changes or suffer the consequences (going out of business).

The key to PVB’s future is our team. Your commitment to learning, adapting, and competing in the coming new (and ever changing) world of banking will decide our fate.

I have great confidence that you can and will make our next 20 years successful for your Bank!

Happy New Year.

– Leton

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“Letters From Leton” is a blog series comprised of the weekly updates that Leton Harding – President, Chairman, and CEO of Powell Valley National Bank, shares with the Bank’s team members. These newsletters are full of uplifting anecdotes and intriguing insights that are applicable beyond the Bank, so we want to share them with you.