Recently added to our Tech-Forward Bank Index, Capital Bancorp, Inc. (Capital Bank, N.A.) has had a very successful venture into payments and credit cards, which has been well-regarded by the street as well as their peers. Travillian’s Head of Banking and Fintech, Brian Love, had a conversation with Ed Barry, its President, CEO, and Director, about his career history and what attracted him to join CBNK. He also explains a current recruitment success and his opinion on home growing talent in an age when speed-to-market is everything.
Ed Barry: I joined the bank about 10 years ago and it was kind of an interesting pitch for me. I’ve worked at bigger places like Capital One, Bank of America and Ernst & Young.
I met the person that I was replacing, who was looking to retire, and his question to me was “Look, do you really want to make an impact?”. When you’re at Capital One, the stock goes up or down and generally, you have nothing to do with it. I wanted to get into an environment and build a culture where I could bet on myself and be unconstrained from many things that made the large bank successful. You can take your ideas and your know-how to a small platform and work on this transformation to be something different than what a traditional bank is, typically.
It’s been a great opportunity. I’ve enjoyed it. Over the past several years, I’ve been hiring more people who think differently and have a different view of the world. We’ve crafted a different culture. Overall, it’s landed us in a spot where we feel really excited, our Board is really excited and I think Wall Street is pretty excited, so far. We see a lot of potential over the next several years.
Brian Love: You hired someone recently, also from Capital One, for a very specific role to win and analyze Fintech partnerships. Could you tell me a little more about that role and why you decided to recruit from a bigger bank?
Ed Barry: We realized there were a couple of different skillsets that we were trying to group under one umbrella and we said, “we think we need to break this into two roles.”
We determined that we would need someone that’s going to be more intermediate-term focused versus someone who’s going to get the products built and launched. So, I broke the role into two. We ended up hiring someone that we knew worked in the payment side from Capital One, who came in with a notion of developing our FinTech strategy and finding the partners that will augment the bank overall, in our different lines of business within FinTech.
We think that’s paid a lot of dividends for us to have someone who’s not tied to the day-to-day and can out go out there and talk to different people on a speculative basis. It’s amazing to see how many of his opportunities started one way, and months later we’re down the road with a partnership.
It was that level of agility that was needed. I think, to really go and do that you need a different skill set. Not a banker or a product person, but someone with a more strategic technology bent. Someone who’s functioned in these types of ecosystems to know who the players are and how they can potentially plug in.
Brian Love: Sounds like there’s some business development skills that that person has, as well.
Ed Barry: Without a doubt, right? It’s a lot about how to find partnerships and bring in the right frontline people. When you think you have something to help you craft what the final partnership is, and in many cases there isn’t a template or a blueprint, we’re in total white space. It’s not like the person has done these partnerships elsewhere and now they’re bringing them here. You can trust a commercial lender. You tend to hire someone, and ask, “Hey, have you done this before now?” and replicate them, maybe bring over some of your old clients. This is someone without any of those skills. So, you must have someone who’s really comfortable in the white space to help you to find what the strategy is, how to think through what you should be focused on, how to align everyone, and then how to start to go get it.
Brian Love: Have you been able to “homegrow” or repurpose talent to become subject matter experts in niche divisions like payments?
Ed Barry: Now that’s a great question. As we’ve gotten bigger and more successful, I’ve noticed that we need more and more specialists, versus when we were small, we needed a generalist. We needed people who could do lots of things, they could hit the ground running, figure out any problem and roll up their sleeves and get it done, and get it done the Capital Bank way. Which many times was being defined as a “startup” mentality. But now as we’ve gotten bigger, we need people with real domain expertise- kind of narrower but deeper- and in many cases, we’ve tried to reposition, but it’s not about training. It’s about intellectual curiosity. So, you need people who want to learn, who want to let go of the past to embrace the future, and it’s really difficult.
We’ve struggled when we’ve asked people to go deeper and become an expert in something, because we find we’re outpacing their skill and their will to build that level of expertise. Some people want to try it, but it’s going to take years and I need an answer in two months. Others are like, “I just don’t want to put in the work…. I just want to keep doing what I’ve always done.” And so, in those cases, we try to supplement by bringing in people with real expertise in the areas we need. It’s caused some ruffled feathers from time to time.
Brian Love: Your bank has been an amazing performer in 2021 and I think there’s even more to come, right?
Ed Barry: Thank you. We’ve been on a good run for many years. It’s nice to see the market start to pay more attention to what we’re doing, our story and our unique approach. I think one of the most valuable things out there is that there are so many different paths to take.
In many respects, that FinTech avenue and technology bent is the great leveler. Now you’re in position where you can compete against folks like the Banks of Americas or the Capital Ones, two places I’ve worked, I’m very fond of and have a lot of respect for. Technology has enabled us to keep pace, in many respects, to the areas that we want to compete in with such strong players like that. The hard part though, is how do you execute and how do you chart your own path? Knowing if you just sit in there and try to copy what everyone else is doing, it’s a real tough slog. Financial services is very competitive and cutthroat; I think this day and age it favors the bold and the original.
Brian Love: Yeah, well said… fortune favors the bold.