Jose Cueto, CEO, Grove Bank & Trust
Invest: spoke with Jose Cueto, CEO of Grove Bank & Trust, to discuss the opportunities and challenges of the banking sector in Florida, how the market is shifting, and how the bank is staying agile and adapting to market changes.
What differentiates Grove Bank & Trust from other banks in Florida?
It’s the relationship with our clients and the level of service and expertise that our clients receive. We’re uniquely positioned in terms of a full-service commercial bank and a thriving wealth business. This business is unique, almost identical at $1.2 billion in bank size and $1.2 million in assets under management. That uniquely positions us versus our competition.
How does Grove Bank & Trust leverage technology and innovation in its operations?
Delivery channels and bank interactions have been areas where we’ve leveraged technology as banking and how customers transact with banks have become significantly more digital. There’s a lot of investment in online banking, mobile banking, remote deposit capture, and tools. Allowing clients to transact as though they were going to a bank but doing it from the comfort of their phone or office is a big change. From a digital marketing perspective, you are leveraging technology significantly more as banks look to become more efficient and lean in. There’s also the advent of AI, and some possibilities can come from that down the road, particularly from an operational and risk management perspective. We evaluate it almost every day at the banking level, and as a CEO, I certainly look for the most efficient way to deliver our services.
How do you think artificial intelligence will impact the banking sector workforce?
Each bank is a little bit different. The adoption rate of banks will be somewhat all over the place in terms of comfort and understanding AI. I think there’s a learning curve to get your arms around. However, there are certain areas where AI can eventually replace employees. I don’t know exactly when that point is or if it is a direct replacement. Maybe it’s more about freeing up bandwidth to be repurposed to other parts of the company versus an employee or position eliminated. The velocity at which AI can help a bank and some of the logic behind AI seem to make sense. Banks are already using AI in certain regards on the BSA/AML (Bank Secrecy Act/Anti-Money Laundering) side in terms of customer activity. It looks at what’s normal, what’s not, the next steps, and decision-making. But like most things, what you don’t understand can sometimes be scary. So, it first starts with a fundamentally sound understanding of AI. How does AI work? Do you know what it is doing, how it is doing it, and the logic behind it? There’s still some stuff to get our arms around.
How have you seen client expectations shift, especially considering the wide array of differentiated banking experiences available?
I think clients still see value in not being a number. Boutique, client-oriented banking is our bread and butter. Products and services, to a certain extent, have become commoditized. What has never and will never become commoditized are people. Do you know the value of a banker who calls you back? Someone who is an adviser in your banking, transactionality, or what you need regarding your financial needs and goals. It’s hard to replace that human element there. We focus on where we can add value to the client relationship. How can we improve the banking experience for every customer? Those are critical elements. By and large, clients want their banking to be with a person.
How does population and business growth across the state impact the banking sector?
More people are coming to South Florida, which provides new opportunities, be it on the employment side, in their bank of choice, or in a wealth management trust. More opportunities come as a byproduct. Folks want to come to Florida to live here. It’s business-friendly, and it’s got great weather. That’s the upside. There’s also infrastructure, traffic, congestion, and some of the other effects of population growth, but that growth also provides more opportunities to banks. Floridians who were not Floridians a year ago or a week ago – that provides opportunities.
What is the bank’s appetite for lending, and what is your outlook in this regard?
We have a new management team in place, myself included. Our outlook is positive. We just finished the first quarter in the Southeast region as the No. 1 bank in year-over-year loan growth and the No. 1 bank in year-over-year deposit growth. I understand that it’s not how you start but how you finish, but getting out of the gates quickly is also a very positive momentum-builder. So, our outlook is guardedly bullish, but optimistic in terms of our ability to execute our strategic initiatives, and that includes how we are certainly in growth mode with loan growth and deposit growth.
What trends have you observed in the banking and finance sector?
One trend is credit unions buying banks. That’s an interesting trend. Another interesting trend is the overall M&A activity and the number of outside market participants who want a presence in Florida. That’s always been around. I think now more than ever, you’re seeing entities either from out-of-state or from other parts of Florida continuing to expand in Florida. What you’re seeing is fewer banks from an M&A standpoint. It’s created an interesting labor market in banking.
On the bigger, broader level, interest rates are an issue. They’ve been climbing as we try to control inflation and employment. We’re not at what I would deem historically high interest rates, but they’re much higher than 0, which is where we were. Another issue in the insurance industry ties directly into banking as insurance costs have skyrocketed in the state. That’s a trend for the state that’s not that positive. In addition to the high cost of borrowing, you’re dealing with these ongoing insurance issues that hurt every consumer.
What is the outlook for the near term, and what are the top priorities for Growth Bank & Trust for the next two to three years?
The outlook is very positive. We have a new management team in place. With that comes a change in what the future looks like. I expect that the next two to three years will be among the best in the history of this bank. I think it’ll be characterized by strong growth, but prudently across all of our business lines. We’ve also focused a great deal on talent acquisition, development of our talent, engagement, and retention. We’re as good as the people we surround ourselves with. It’s the people who make a huge difference. Because of the great people we’ve attracted to this bank, success will surely follow, and we already see many early positive indicators of that success.
