4 min read May 2022 — With Invest:, Jamie Tranfalia, commercial banking leader in Eastern PA and Southern NJ at KeyBank, discussed KeyBank’s priorities in an evolving financial landscape and economy. He shared KeyBank’s technology focal points, services growing in demand, ESG and DEI priorities, the future of work at KeyBank and his outlook for the economy in the near term.
What differentiates KeyBank?
What’s unique about KeyBank is our go-to-market strategy. For middle market companies, those from $25 million to $1 billion in sales, we bring to the table a team of financial experts from across the Key enterprise to deliver a full complement of customized financing solutions, investment services and capital markets offerings to meet our clients’ needs. We are able to leverage our investment banking arm to provide our clients with great access to the capital markets and M&A advisory services. Most large banks with these capabilities focus on larger public companies, but we’re able to bring those services to the middle market. This is what attracted me here. We also have one of the top private banks in the industry, bringing private banking and investment services to our clientele as well.
On the consumer side, we’re focused on the right blend of physical and digital banking capabilities, and we meet our clients where and how they want to bank. While the pandemic accelerated the use of digital banking products by customers across all demographics, it also showed us that customers still want to work with a person for significant financial milestones – like buying a house, paying for college and planning for retirement. Our retail banking model is designed to provide that mix of digital tools and personalized service.
What makes Philadelphia a great market for business growth?
Our healthcare and life sciences sectors are booming. We also have technology hubs here as well as core-based manufacturing and distribution companies that have been here a long time. It’s a good, solid industry focus and it has been successful for many years. The ports in New Jersey and Philadelphia have also seen some incredible growth, with our clients at the port doing very well. The market also benefits from its location along the I-95 corridor with its proximity to New York and Washington D.C.
What are the specific services that are most in demand for KeyBank?
We’ve been busy in the past year across most of our commercial activities. Financings are up and there’s a lot of M&A activity, with M&A advisory services being a strength of KeyBank. Across the board, companies are spending on CAPEX and demand for products and services is increasing. We have one of the largest equipment financing groups in the country, and we’re seeing a tremendous amount of demand within that group due to this CAPEX growth.
It is clear that our customers are feeling more optimistic about the economy. Companies and private equity firms that may have put things on hold at the onset of the COVID pandemic are making up for lost time and investing again for growth. Clearly, some uncertainties continue to impact everyone – rising inflation, for one, is a watch point. Also, our clients continue to cite some supply chain issues and labor shortages as challenges to their businesses. For Key, the uncertainty is really an opportunity for us to show the strength of our relationship model. We were there for our clients throughout the pandemic, and we are here for them now.
What are the main technology focal points that KeyBank is pursuing?
Investing in technology has been a priority of KeyBank’s for the last fifteen years. Digitizing the enterprise, from front office to back office, is a primary focus for us. We’re working to provide simple, easy and intuitive digital products to further enhance client experiences. We’re also adopting a more agile operating model across the organization, not just in our technology functions, and it is enabling us to move faster in how we digitize for the benefit of our clients and our teammates.
KeyBank implements our fintech strategy in three ways: by partnering with tech companies to bring needed services to our clients; by investing in those that we believe will have a meaningful impact on our business; and by acquiring those that have great synergies with our approach to banking.
For example, we’ve partnered with Google to move the entire bank onto Google Cloud. We will be one of the largest banks in the country that has its applications on the Cloud. This is an effort to streamline processes, become more efficient and drive cost savings. We also are placing a heavy focus on integrating artificial intelligence into our systems to better find and serve client needs.
A great example of a successful acquisition for us has been Laurel Road, an online platform for mortgages and student loans mainly for medical professionals, that we bought in 2019. Building on the platform, we launched Laurel Road for Doctors, a fully digital affinity bank tailored to physicians and dentists. I don’t think any other bank is doing something like that.
Still another recent example is our acquisition of XUP Payments, a payment platform that helps with our merchant capabilities. It would have cost a great deal more to create these platforms in-house, so partnering and purchasing these companies and integrating them into the bank has been a very successful strategy for us.
What does the future of work look like for KeyBank?
The best way to describe our workforce strategy is “hybrid.” While we have offered some flexibility in our workplaces for years, the pandemic certainly showed us that many more of our job functions could be done successfully outside of the traditional office environment. Key’s workforce plan has a mix of people working from home, working from assigned offices, and working in a mobile capacity from a variety of bank and non-bank locations. We’re taking into consideration the flexibility our employees want and what the specific job functions require. If we’re going to retain and attract the best talent, we need to provide that flexibility. That being said, like all other companies, retaining our collaborative culture is important and the best way to do that is having people together in the office, at least part of the time.
How is KeyBank advancing the areas of ESG and DEI?
ESG and DEI are big focuses of ours. KeyBank’s 2021 Environmental, Social and Governance Report, issued earlier this year, highlights the bank’s climate stewardship and Diversity, Equity and Inclusion commitments. We also announced that since 2017 we’ve achieved $26 billion in community investments toward our 10-year, $40 billion National Community Benefits Plan, consisting of economic equity and inclusion commitments to provide financing for affordable housing and small businesses within low-to-moderate income communities. That has included more than $500 million in investments in the Philadelphia and eastern Pennsylvania area in the last five years, something we are extremely proud of.
What’s your outlook for the upcoming five years?
Despite the challenges of the last two years, the economy has been stronger than most people would have originally forecasted. Certainly, there are some headwinds with inflation and interest rates currently on the rise to more historical levels, but I believe the economy will normalize over the long term. Philadelphia will play a significant role in increasing the region’s economic base through growth in life sciences, technology, port activity and manufacturing and distribution.
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