Writer: Max Crampton-Thomas
2 min read September 2021 — As Minnesota becomes the new tech hub in the nation, Vice Chair Tim Welsh of U.S. Bank spoke with Invest: about how technology has impacted the company and others in the banking and financial sector. He expanded on how banks are a part of the solution to the pandemic and how U.S. Bank is working with the community to address social justice issues.
How has U.S. Bank grown in the last year and how do you plan to carry that momentum forward?
Over 80% of transactions occurring at the bank are digital. The human connection is important in discussing the broader financial issues and providing help with technology. Consumers value consultation services where we provide advice on perplexing financial issues that they’re unable to discuss with others in their lives. We can do this face-to-face as well as with virtual experiences like “cobrowse” to service all of our customers comfortably. It’s a powerful combination that will continue to accelerate.
Two and a half years ago, we fundamentally rebuilt our app and launched it in March 2019. It was recently rated by Keynova Group, a leading industry benchmarking service, as the No. 1 app for mobile banking. Since then, we’ve worked hard to get the human side of banking right as well, including building strong relationships with customers. This year, we’ll have scheduled more than 2 million appointments with our clients, which are helpful and engaging opportunities to discuss financial goals. Our approach is about the combination of human plus digital to create a strong experience for our customers as we help them live the lives they want.
Our business model provides a diverse revenue stream and mix between net interest income and fee income – we have a significant mortgage and credit card business as well as fee-based businesses like Corporate Trust. That balance helps reduce revenue and earnings volatility over time.
What is the state of the banking and financial services sector and which areas are experiencing the most activity?
US banks and banks overall are part of the solution to the pandemic. Banks are in a strong position. For us, it’s partly because our credit quality is so high. We’ve provided $10 billion in PPP loans and our banks have supported small businesses through the toughest of times. Our purpose is to be there for our clients and to help them succeed.
How is the Minnesota economy faring during the pandemic?
Our economy is remarkably diversified across industries, such as banking and finance, healthcare, retail and agribusiness, and other industrial companies. In all that, consumer businesses have expanded extraordinarily. At the same time, companies that are on the leading edge in the healthcare sector are thriving. Medtronic was one of the few ventilator manufacturers in the world and at the start of the pandemic decided to open-source manufacturing of their ventilators.
In what ways is U.S. Bank collaborating with the community to address social justice issues?
We’ve made commitments of over $100 million in grants, donations and philanthropic contributions. We’ve also launched a series of programs called Project Access. One program focuses on homeownership for Black Americans and how to increase their levels of homeownership. We’re also deeply engaging with the community. U.S. Bank and several others brought First Independence Bank, a Black-owned business, to the community.
It takes everyone in the private and public sectors working together to create a philanthropic community where we build everyone’s potential. 20 years ago, a group of business leaders in Minneapolis/St. Paul got together to strategize ways to develop the region’s economy, creating the present-day Itasca Project. It was created to bring people together on a regular basis, identify key issues and create the community we want. We helped to spearhead the passage of the largest transportation bill in the history of the state. We also created Greater MSP, a group that can coordinate resources among different businesses. As a result, we’ve generated an incremental $3 billion in investment in our region and 75,000 incremental jobs.
When we face the most challenging times together, it’s amazing what we can accomplish. We’re able to accomplish more, and faster than we’ve ever imagined. It’s nice to say in theory but it’s great to provide examples of how we’ve done that.
What regulations or legislation is U.S. Bank following?
We’re considering the role of fintechs and how they work in the environment. Similarly, Itasca and Greater MSP are monitoring issues relevant to the region, one being the first 1,000 days in a child’s life. Itasca began this effort two years ago, with the First 1,000 Days campaign, because the first 1,000 days in a child’s life are the most crucial. This period sets the foundation for the rest of their lives. There’s now more discussion in the state legislature regarding how to help families in those first 1,000 days.
What are the differences between the pre- and post-pandemic economies and your outlook for 2022?
We’re seeing many signs that the economy will be robust, although we’re concerned that issues regarding labor and the supply chain will hamper the development of a robust economy. Jobs are available and yet every business is having trouble hiring people. It’s also astounding to witness how difficult it is to obtain items. While I’m optimistic about the long-term economic growth, the near term will be bumpier as we work through these issues.
We want to continue utilizing and optimizing the model where technology and people meet, making our business more systematic and consistent. It’s a significant change in how people work with banks. We hope it’s a positive and lasting effect that gives us the potential to help families live their dream lives and help businesses prosper.
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