Selling to regional banks

Regional banks buy services to stay out of trouble with the regulator and to keep up with bigger banks on digital. Everything else is secondary. Pitch to one of those two pressures and you'll get heard. Pitch around them and you won't.

These banks are a great market for services firms. They have real budgets, real problems and lean in-house teams. But they're slow, cautious and full of people who've been burned by vendors.

Who buys

The economic buyer is usually a member of the executive team. The CIO or CTO for technology programs. The chief risk officer or chief compliance officer for regulatory work. The head of retail or commercial banking for customer-facing projects. The CFO for anything touching finance, reporting or cost.

Your champion is often a senior vice president or director who lives with the problem. The person running the loan operations team. The head of digital banking. The data lead who keeps getting asked for reports the systems can't produce.

The technical lead might be in IT, or it might be the core banking vendor's relationship manager. Many regional banks run on a small number of core providers, and the core vendor has a lot of influence over what gets bought around it.

The pressures they face

Regulation sits over everything. Regional banks answer to examiners who look at risk management, data quality, cybersecurity and compliance. An exam finding is a forcing function. It comes with a deadline, and the bank has to show progress.

Margin pressure is constant. Banks make money on the spread between what they pay depositors and what they earn on loans. When that spread tightens, the efficiency ratio gets attention, and so does every cost.

Digital competition is the third pressure. Customers expect the same app experience they get from the largest banks and fintechs. A regional bank with an old mobile app loses younger customers and small businesses.

And there's the core. Many regional banks run on older core systems that are expensive and hard to change. Every digital project bumps into it.

Signals that matter here

A new leader in the buying seat is strong. A new CIO, CRO or head of digital banking arrives with a mandate and a window. Bank executive changes are often disclosed in filings for public banks.

Business pressure shows up clearly. Public regional banks file 10-Ks and 10-Qs, and their earnings releases talk openly about margin, efficiency ratio and expense programs. Look for language about technology investment, core modernization or operational efficiency.

Deals are a big signal in banking. When two regional banks merge, they have to convert one core to the other, combine operations and integrate data. That's a large amount of work on a fixed timeline.

Hiring for the problem is useful too. Postings for BSA or AML analytics, data governance or digital product roles tell you where the bank is investing. The buying signals guide covers the full list.

An example opener

Say a regional bank announces a merger with a smaller bank in a neighboring state. A few weeks later, it posts for a conversion project manager and a data governance lead. Its last earnings release mentions the efficiency ratio as a priority.

Here's a note to the CIO.

Saw the merger announcement and the new conversion project manager role. Conversions usually land on the CIO with a fixed date and no extra headcount. My guess is the data mapping between the two cores is further behind than the timeline assumes, and the data governance hire is meant to close that gap. Is that accurate, or is the bigger issue something else?

That note names the deal, ties it to the CIO's seat and makes a specific guess the CIO can confirm or correct.

What to avoid

Don't pitch innovation without addressing risk. A bank executive's first question is what could go wrong. Answer it before they ask.

Don't ignore the core vendor. If your work touches the core, know which provider they use and how your work fits around it.

Don't assume the regional bank wants a big-bank playbook. They want something sized to them, with a team that understands their scale.

And don't go to one person. Banks decide by committee more than most industries. Reach the economic buyer, the champion and the technical lead, each with a note written for their seat.

Regional banks reward patience and precision. Name a real pressure, tie it to a real person and show you understand the risk. That's how you earn the second meeting in a building that doesn't hand them out easily. The method has the full shape of the opener.