Todd Williams, President & CEO, Scale Bank

In an interview with Invest:, Todd Williams, president and CEO of Scale Bank, discussed the key highlights for the bank in the past year and also some of the trends that are emerging in the Twin Cities. “It was an eventful year for us,” he said. “We were in full swing last year.”

What have been the main highlights for Scale Bank in the Twin Cities during the last year?

It was an eventful year for us. We were in our second year of Scale Bank and continuing to promote the brand as well as running a number of campaigns. We were in full swing last year. 

We did a small acquisition last year in the factoring space. The company was called Provident Commercial Finance. We onboarded that team midyear. That was a successful acquisition and onboarding. 

The other highlight was getting traction on our SBA efforts and became a preferred lender, which was rewarding as well. We also did a lot of refreshing and really working on execution last year, especially around payments and treasury management. A lot of our clients were actively looking for opportunities to improve their cash management and treasury. 

What trends are emerging in the banking and finance industry in the Twin Cities? 

Just looking at the Twin Cities and our market, there has been some additional consolidation. Larger institutions may be migrating up a little bit in their target market. That has created an opportunity for Scale Bank to serve some of those clients that may not be in the target area of those larger institutions and also may be seeing some disruption around their delivery or their talent. There’s an opportunity for us to be laser-focused on some of these business owners that we resonate with. There’s also an opportunity for us to pick up some additional talent. 

What have been the drivers of growth for Scale Bank?

It’s a mixed bag. Certain industries are growing and other industries are contracting, at least in this region. We saw an uptick in our mortgage warehouse business last year, where we picked up some additional clients. 

With interest rates coming down, that helped spark some refinancing opportunities last year, which helped us support our clients in the mortgage banking industry. 

We also had some clients who saw some reshoring of manufacturing, especially in technology and aerospace. We saw those clients look for equipment financing. But there was a little softness in the agricultural and commodities business last year, and manufacturing in general. 

Certain parts of the bank were up, and certain parts were a little soft. We’re also trying to pick up clients who are dissatisfied with some of the consolidation in the market and with the delivery of customer service through some of the bigger national and regional banks.

What are the main challenges for the banking and finance industry?

Outside of fraud, one challenge for the industry is getting people interested in careers within banking and finance. When we are out there looking for the next generation of leaders and decision-makers, as an industry, it’s important to get people involved earlier in their careers. We want them to know that this is an industry in which they can thrive and have an impact on their clients and their community. It hasn’t been easy, especially with some of the publicity over the years. When you look at people choosing careers, banking just doesn’t come up as a primary focus for people. Getting talent or retaining talent is gigantic. 

The other challenge is the number of nonbank or finance players moving into the industry, like financial technology companies, which can move quickly. Their products are easy to work with. It’s a challenge for banks to both keep up with that technology and also be flexible and nimble. Consumer and business owners want that experience that financial technology companies are providing. It’s putting a lot of pressure on banks to come up with a consumer feel for their business product.

How do you see technology impacting the banking sector?

The new technologies are great, but it always comes down to data and knowing how to use data to make data-driven decisions. People today expect you to know something about them when you offer a product or identify a need, so that it feels more personalized. Technology can help create that personalized experience.

If we use technology appropriately, it actually makes us more human because it eliminates all these things that make us less human. We can use the tools that we have as humans to be more empathetic and to create relationships versus doing things that are more administrative. 

We’re trying to use all kinds of tools to make better, more relevant decisions. We’re using AI and other technology to automate and, again, create more space for us to be more human.

What is Scale Bank’s strategy for growth?

We’re in high-engagement banking. When I say high engagement banking, that means our client relies on our services daily to help them execute their businesses. We want to do anything we can do to help our clients deliver on their daily execution, which is related to treasury payments, cash applications, and anything that helps them succeed in their businesses. 

Our goal is to double our size in our specialty niche businesses, where it’s required that we have specialized technology as well as specialized experts who can solve issues and support those clients. 

We also want to diversify strategically across the Twin Cities and open other locations.