2026 Banking Predictions: A discussion with PCBB’s President

Nancy Ozawa (00:06): Hello and welcome to Banking Out Loud, a podcast where we have candid conversations and deliver insights on banking topics that you care about most. I'm your host, Nancy Ozawa. Today, we're going to look into the future to see what 2026 will bring. You know, every year brings new challenges, but it sure seems like this past year has really been pivotal. We have been talking about efficiency. We've been talking about deposit strategies. Culture has been at the top of our list as well. Cybersecurity has been there, regulations, and many more topics and challenges. So that was 2025, what's in store for us for 2026? I think it's gonna be a big year for a lot of things. So what we wanted to do today is to look ahead at a number of important banking topics and see what '26 has in store for the banking industry. (00:56): So I'm thrilled to welcome Mike Dohren, our president here at PCBB. With over 25 years in banking, he's seen a lot of these changes in the banking industry, and he's helped our customers and our company navigate through them successfully. So with that, Mike, thank you so much for joining us. Are you ready for this? Mike Dohren (01:14): I hope so. I'll do my best, Nancy. Thanks. Uh, happy to be here. I'm looking forward to the conversations. Hopefully there'll be some good conversation and insights shared that banks can benefit from. Nancy Ozawa (01:25): Definitely. And that's what we all are about is trying to get some insights to share with our listeners so they are more informed and get them to have their own conversations internally. We thought we would dive into the biggest themes community financial institutions have on their radar for 2026. What are those big topics they should be thinking about? So there's a lot of them. Let me just kind of tee up a few that are in my head. There's profitability, there's financial performance, there's efficiency, uh, there's digital payments, stablecoin, compliance, fraud. I don't know how we're gonna hit all of these topics, Mike, but we're gonna try to touch on as many as we can. (02:01): So with that, let's jump right in and let me ask you, we talk about financial performance. That seems to be a big one, uh, for everyone in '25, and I would imagine that's gonna continue in '26. Can you speak a little bit more to where you think it's gonna be going as far as margin stabilization, credit risk? Is deposit strategy still gonna be very important as far as liquidity? Where do you think that whole area is going to be? What should be on our radar? Mike Dohren (02:30): Yeah, of course, profitability, financial performance is still the primary focal point for financial institutions. They're focused on delivering value to their, to their shareholders. So that's a primary focal point, that's why we set strategy. And it's an industry that's based on growth. And the reason they're focused on growth is because it enhances their financial performance and their ability to serve the customers in their markets. So it is the key measuring stick that, that we use. So what are some of the things that I see or that we see at PCBB as we look forward to '26? (03:04): And, you know, there were a lot of bumps in the road and challenges and we've had a lot of evolving concepts now that banks are gonna need to pay attention to. So I think those changes are gonna accelerate in '26. But as far as the baseline of what do we see in '26, we've got a, an interest rate forecast and an economic forecast that the Fed has recently given us that lays out their expectations for what's the environment gonna be on a macro level. And it should be one where we continue to see continuation of strong margins or slightly improving margins across the industry. That's a high level expectation now. (03:45): That's gonna be offset a little bit by an increase in credit costs, meaning provisioning. There's gonna be some challenges in certain sectors that we've seen, saw some of that in 25. There's an expectation that some businesses continue to struggle in '26. So we will see probably some increases in loan losses over a longer term, a reversion to kind of the mean loss rate is an expectation by '26. It's a modest increase is the current expectation. So there's still a good roadmap for banks. (04:19): I think there's also been somewhat of a separation between the top performing banks. We saw this in, in '25, it's gonna continue in '26, where the separation is those banks that have been investing more in innovation and technology in different ways to enhance their efficiency or their customer engagement. They're starting to see the benefits of those investments that they've made. So there is kind of a bit of a separation that I think is gonna be more pronounced in '26 from those that have been continually investing the last several years in that digital customer engagement versus those that have not been making those investments. I do think there will be a little bit of a more challenging environment f-for banks. There are gonna be very successful banks that haven't necessarily innovated. But at some point, I think the customer expectations is gonna demand that they do so. And it's hard to catch up once you get too far behind sometimes. Nancy Ozawa (05:17): It is. What you've kind of woven is there's an economic, uh, conditions out there, but yet you're saying one of their strategies is to be focusing on that customer engagement and that customer experience in order to weather a number of these challenges that are gonna be in the market for '26 or continue into '26. Mike Dohren (05:37): Yeah, I mean, it's a great way to characterize it. I, I think the way that we've always thought about it is the, one of the primary values that community financial institutions have is they know their community, the relationships they have in the community. They don't just know that their customer is a restaurant. They know where it is. They know which day it's busy. They know their markets. They know their communities. So they, they have those, that understanding of what's, which businesses have the opportunities for success. (06:07): So knowing the customer, knowing the customer needs, how do they leverage that? Part of that is that combination of this evolving hybrid model of personal engagement for the high touch, high advisory types of services with the more routine activities like making a payment, transferring funds between accounts. There has to be that digital ease of use on a mobile device combined with how do we continue to have the digitally enhanced tools so that their business development folks and the relationship teams can have that customized engagement. And the expectations from the customer continue to evolve as well. There's a lot there, so there's a lot of themes that were- Nancy Ozawa (06:54): Yeah. Mike Dohren (06:55): ... put out here in our first topic, so. Nancy Ozawa (06:58): Exactly. And let me just pick up on the customer engagement piece, because I know a lot of people are putting a lot of money into that. I remember a few CEOs said, you know, it's a little challenging when you add more and more and more branches to keep the culture. Do you see that, as we make those investments and that customer engagement, that it's challenged by when the, the institution itself grows or are those two independent ones for you? Mike Dohren (07:23): I think it is challenging. You hit on a couple of topics here. Nancy Ozawa (07:26): Yeah. Mike Dohren (07:27): Starting with the culture piece and the teams, I do think it's important that the teams are brought along on that continual upskilling and re- retooling, retraining- Nancy Ozawa (07:39): Okay. Mike Dohren (07:39): ... and empowering them with those tools so that they can have a better engagement when they get that opportunity to have an interaction with a customer, a face-to-face interaction, or via Zoom, or a digital interaction with a customer. Those times are precious because that customer's giving you their time and they're focused on what you have to say. As a banker, that's your best opportunity to enhance that relationship and that interaction and that loyalty of that customer. Nancy Ozawa (08:05): Right. Mike Dohren (08:06): And those, those interactions aren't as common as they used to be in this industry. So I think that's, how do you arm your business development folks with the tools to be most successful? Nancy Ozawa (08:16): Right. I'm thinking about a, a CEO that I was recently talking to, and her field that was talking to all the customers was constantly busy. And what they found is that they really were talking to every single customer rather than reallocating their time based on the most profitable customers and then the least profitable customers. What do you think as far as that profitability analysis with customers? How does that interact? Historically, we've always said we wanna be profit, but we haven't, um, maybe looked at it in terms of bringing all of those databases together to have that 360 view of the profit of that customer. Do you think they're gonna be more forward-looking these banks or where do you think the banks should be thinking in '26, especially given your comment about the importance of the touch and the importance of their earnings as well? Mike Dohren (09:08): You hit on a key consideration that a lot of banks are trying to figure out how to address this. It's, we know who our top 10 customers are in the institution, right? The, the executive team knows them by name, probably knows their kids' names or their pets' names, but once you get down farther into, call it the mid-range of the profitable customers, if they have a full-blown profitability analysis, they're getting, in all likelihood, a, a similar level of service as those top customers. And the key to success and enhancing your profitability is not just to figure out how to treat, your, quote, average customer, it's how to migrate your less profitable customers to be more profitable. Nancy Ozawa (09:48): Right. Mike Dohren (09:49): In many cases, they're getting a high touch personal service at, at the community institution when maybe that's where they should be investing in things that can be done digitally and more of a DIY. So I do think those are sometimes harder problems to solve and, and analyze. But the, the first key is understanding what data you have, not trying to come up with a perfect data solution, but start with what's the minimum that you can compile in order to deliver the output value to make some of these decisions and decide which of the use cases might make the most sense for your institution. Nancy Ozawa (10:28): 'Cause this could inform a lot of the future decisions that you make if you put it at the core of it, at least one CEO, that's what she was doing at her institution, all of her decisions of sponsorships and allocations of the time and all was based on that analysis. Mike Dohren (10:45): I also think part of this is, you know, we've been using these terms digital transformation for so long. Nancy Ozawa (10:52): Yeah. Mike Dohren (10:53): I do think there was probably a tendency for some banks to try to do too much rather than focus on what are the three main things that are gonna make the biggest difference for us, and let's make sure we don't just start them, but we complete them. And then you can still be identifying and planning for what are the next three, but kind of carrying those through. 'Cause if you try to change everything all at once, you're gonna lose your employee support. It's gonna be overwhelming for the culture of the organization. Nancy Ozawa (11:24): Absolutely. I mean, there's a lot of different technologies, um, and not just new technologies, new ways to connect. What do you think about, like, open banking and API and partnerships? Because that's not just the technology, that is the people, how you do it with the infrastructure, the connection. Where do you think that is going in '26, or is it more of the same from '25? Mike Dohren (11:47): I think it's gonna continue to evolve. If we step back and think about it from the customer perspective, not just the banker perspective, those small businesses are being courted on a regular basis by fintechs, by regional banks, by large banks, to the different services that they could consider taking outside of your institution. So you have to understand and spend time thinking about, what does a small business customer want if they're focused on the small business customer? Nancy Ozawa (12:16): Right. Yeah. And I, I think that's, that's one area for them to start planning if they're not already looking at that. 'Cause as you said, they've got strong relationships with the customers, now they just need to dig down deeper into their technology and their needs piece to anticipate. Mike Dohren (12:32): And these conversations, I think that part of what customers are looking for is the banks to not just do these things, but to give them some insight for w- what's coming. You know, that messaging about that we're continuing to enhance our service offerings, you don't wanna do it too far in advance because then you set a false expectation. You need to position your institution as someone who is enhancing the customer experience and bringing it along for what you've heard from your customers. You know, telling them, "Here's what we're hearing from our customers and, and we're listening, and here's some of the things on our roadmap." I think once banks committed to doing something and far enough along that they think they're gonna be able to deliver it, it's helpful to kind of pre-message that. Because like I said, they are being courted by others to get these services somewhere else. So we've gotta always be protecting and be on that defensive of, how do we make sure they're not clicking on ads and picking up phone calls, so to speak, from a competitor, bank or non-bank? Nancy Ozawa (13:37): That's a really good point. A lot of times, you know, internally, we make decisions of where we're gonna go with our technology or service, but we don't always pre-message with the customer to share that roadmap. And so that is a way to, again, honor the relationship and provide them information about what you're thinking about as well. Mike Dohren (13:54): Yeah. I mean, it's gotta be thoughtful of what's communicated, but messaging that the bank is continuing to, to move forward and reinvest, even just the message about reinvesting in the way we provide our service to our customers is an important message. Nancy Ozawa (14:10): Absolutely. Y-you wanna do it at the right time because, as you say, if it's too early and you haven't yet committed, you don't wanna be talking about vaporware. But you also don't wanna be too late where the competition has taken them away, so it's that delicate balance between the two of them. You know, another big technology that has been, it was there in '24, but it's huge in '25 is AI. Every single conference we all went to had at least one or two, if not the entire conference, on AI and automation. How do you think this might roll out in '26 in terms of affecting maybe banking operations, talking to the customer, even product strategy? Do you see things like it'll say, "Hey, Nancy, your summary of your balance is X and your 12% higher here. And oh, by the way, you're spending too much over there." W-what do you think AI could do in '26? Mike Dohren (15:04): Well, that's a wide open question, but you're right. Nancy Ozawa (15:05): (Laughs) [inaudible 00:15:07]. Mike Dohren (15:06): I think in '24, AI was scary for most community institutions. I think there's been a much, much broader acceptance. Um, there's still some fear of, how do we deploy it in our organization? But I think in '25, it pivoted to not just let's learn and use it as a supercharged search engine, um, but let's figure out how can it help our teams to be more efficient, more effective. And how then do we embed it in some of our different business processes? But it's here to stay, it's not going anywhere. The different vendors that we all work with and that provide services to the financial institutions themselves, they're all solving this problem too, and trying to figure out how do they incorporate it. I mean, PCBB is doing this as well in some of our services. So we spend a lot of time and efforts. (16:01): I think I would describe it as in '24, we worked through kinda what's the governance process? How do we think about this in our organization? We did a lot of self-education- Nancy Ozawa (16:12): Mm-hmm. Mike Dohren (16:12): ... but also making sure we were prepared to what you can and can't do. I think that most banks are kind of on a similar type of journey, so they are now trying to figure out how do we get value out of our AI, um, enhancement, so to speak, in our business processes. And it is becoming embedded in more and more services over time. Nancy Ozawa (16:35): Right. Mike Dohren (16:36): I think the key that a lot of banks have to do to truly benefit from it is to have a better understanding and a better just a data organizational strategy and, and a roadmap of how do they get the data in a more AI-friendly and structured format. So I think that's the effort a lot of institutions that are really in-investing in how is this gonna make some of those routine tasks more efficient? Nancy Ozawa (17:02): Yeah. Mike Dohren (17:03): How is it gonna be a part of our compliance process, our risk assessment process? How can we use AI so that things that we used to only do quarterly we can do daily if we choose to, from a either risk or insights or trend analysis? There's so many things that are changed once the data strategy is aligned with how to use the different technological advancements. Nancy Ozawa (17:27): Right. Mike Dohren (17:27): So it's, it's an exciting, but still scary concept. I think it, there needs to be an awareness that this isn't something that, you know, takes your job away. It just augments what you can accomplish in, in a work day. That's, I think, the important part of how to message AI internally. Nancy Ozawa (17:47): Yeah. Mike Dohren (17:48): It will replace the things that you might do that probably are less interesting to you as an employee, um, or at least a portion of those over time. But it r- it's really gonna benefit from an efficiency and it's gonna give the executives and the managers insights that might have taken them longer to realize and to arrive at those insights. Nancy Ozawa (18:10): I, I think that's an important part, you know, as far as the impact on the, the workforce is they, they gotta get used to using it, but it can help them, uh, get rid of some of the routine rote type processes and allow them to be a little bit more strategic possibly. They can then control the AI model in part of their projects. Do you see there's other skills that the workforce would need? I mean, I'm thinking in terms of, you know, if they're not doing the basic paper reports, you have AI do it, now strategically, you're free to have more strategic thinking and decision making and collaboration with the system. But is there other skills or activities that you see that it's gonna change the way that, um, employees work with AI? Mike Dohren (18:57): I think risk management is a great example of ways that AI can tremendously enhance the ALCO process. Nancy Ozawa (19:05): Okay. Mike Dohren (19:06): For example, if you're a CRE lender, things like renewals, over time they can't be completely automated. But most of the work of a renewal, if the data is organized in such a way, you're renewing something where you already have the data, the basics can all be pre-populated as you get to a timeline and a rule-based process to be prepared to have a renewal conversation. And if you, if you get a, "Oh, that's an interesting..." "Well, I've already prepared the docs for you. It's ready if you are interested. We can get that done today," is a different conversation than, "Oh, I'll think about it and get back to you two months from now." In the meantime, they're being courted by a competitor. So there are different ways that you can think about how, how the AI functionality can be utilized in those activities that are really important to your success, but may require a lot of time from your high, high value employees. Nancy Ozawa (20:04): Yeah. Mike Dohren (20:05): So how can they be better prepared to reach a money generating transaction sooner? Nancy Ozawa (20:11): Right. It's almost like they are able to make decisions faster because they're gonna have the information presented to them faster. And that usually was the time, was spending hours and days or weeks on trying to pull all the data together to make that decision. Mike Dohren (20:25): I know, I know that, that I come from a financial reporting background in my career, but I think the idea of spending so much less time creating reports, instead you may already have reports that get generated by different automated tools that have already been vetted and controls in place and g- provides initial high level insights. Then you have people that serve as, call them more senior and advanced analysts as opposed to report preparers. Nancy Ozawa (20:54): Yeah. Mike Dohren (20:54): Removing manual errors is one benefit, but there's so much more insight that can be gained if, um, if used properly. Nancy Ozawa (21:03): Yeah. So basically it's upskilling the, the worker to a little bit more strategic level, as well as some wonderful benefits for the company. But you also mentioned earlier is you gotta have a data strategy and you've gotta align it so that you're not relying on the workers to decide what to do with AI completely. You're also dictating where you want the biggest bangs to happen for your company. And coming back to our early conversation about efficiency, it ties back to that strategy as well. Mike Dohren (21:30): Absolutely. And this isn't an IT strategy. Nancy Ozawa (21:33): No. Mike Dohren (21:34): This is a business strategy. So this is something where, you know, there's a lot of financial institutions that may or may not have board members that are knowledgeable on the topic. Some have the luxury of that. But there's probably value in having an expert provide some sort of insights to your board to make sure they understand not just the, everyone else is doing it, so we're doing it too, but to truly understand why are we doing it? What's the value? Translating it to some specific actionable items that you can identify and point to things that enhance the performance of the organization and the customer interactions and everything else. I think those are important messages so that it's, it's not a so what board conversation when you talk- Nancy Ozawa (22:22): Yeah. Mike Dohren (22:22): ... about the benefits that you're gaining, there's an excitement about the things that it can do for your organization. Nancy Ozawa (22:28): Okay. Good. Now, you mentioned risks, so let me pick up on that- Mike Dohren (22:33): Okay. Nancy Ozawa (22:33): ... thread and talk a little bit more about risk and compliance. Um, always a very important subject for community financial institutions, also sometimes a very expensive one and when it comes to cyber. But what do you predict as far as what are some of the threats or regulatory changes, issues that might be either revisited or may appear in '26 that we haven't seen before? Any glimpses into that? Mike Dohren (23:00): I think the thing that's evolving, and it has been for years, and it's always been a risk, but it's no longer a risk that's isolated down and the folks responsible for your, your security or your PSA functions and fraud monitoring, it's these are board level risks at this point. These are some of the highest risks that folks see in the industry is the risk of fraud, the cyber risk. The how do we continue to protect as technology advances and as AI is utilized by financial institutions? Everyone else out there, all the bad guys have access to these same technologies. And techniques of how they can try to extract money, you know, out of the financial system is continuing to evolve. And it's really hard for smaller institutions to have the resources and the ability to keep up. Nancy Ozawa (23:53): Right. Mike Dohren (23:54): So I do think that's an important part as you go through your different "risk pillars" that the board's focused on. Cyber risk, fraud risk, those have to be at the top. Nancy Ozawa (24:06): Right, right. We had an officer from the Secret Service on our podcast, and he said with about 250 bucks, you can get an account that's dormant and an AI tool, and you're in business as a scammer. So is there anything that you would recommend to think through more cybersecurity tools or other processes? Mike Dohren (24:27): You're gonna have to continue to invest. Nancy Ozawa (24:30): Yeah. Mike Dohren (24:30): Because the ability to continue to protect the institution, you can't be a step behind. So that's one where there, it's continually changing and evolving. I know that some of the things that banks have to consider is how does it integrate with some of the things that they already have? So some of those decisions are ba- have to be bank specific. Um, of how are they organized? Are they cloud-based? Are they on-prem? How do they run their infrastructure? There's different tools that are aligned with different underlying infrastructures, so there are a number of tools out there. Nancy Ozawa (25:03): Yeah. Maybe think about your position as president and the team come to you and say, "We need to invest in this." What are the things that you're asking to ensure that they do get the cybersecurity that's gonna be needed for '26? Um, because sometimes it's just, you know, it feels like it's another tool kind of thing. But in your role, what would you be looking for them to convey to you to say, "This is a good investment?" Is that easy to quantify or state? Mike Dohren (25:30): It's not easy. Nancy Ozawa (25:32): (Laughs). Mike Dohren (25:32): But an important part is make sure that the team you have making those recommendations i-i-is knowledgeable. Um, and to the extent you, you can and you have the resource, I think it's important to be able to check with third parties- Nancy Ozawa (25:47): Okay. Mike Dohren (25:47): ... and the normal vendor due diligence. I mean, we're required to do so much vendor due diligence now from a regulatory perspective. Nancy Ozawa (25:54): Yeah. Mike Dohren (25:55): But there's a lot of information that's readily available. It's hard to sort through what's self-promotion, um- Nancy Ozawa (26:03): Yeah. Mike Dohren (26:03): ... masked as customer testimonials. Nancy Ozawa (26:06): Sure, sure. Mike Dohren (26:08): But you do wanna make sure it's a partner that's gonna continue to reinvest. And I think that's an important question to be able to answer is what's their plan, how do they plan to stay current and continue to evolve? And how often do they issue a new version of this underlying tool or software that they're deploying? Nancy Ozawa (26:26): And maybe to your earlier question, what is their roadmap even beyond this to add even more functionality into it as well? I wanna just kinda segues a little bit into the regulatory piece. We've seen a change with the OCC's approach. Um, it's supposed to be a little bit more favorable to community financial institutions. Do you think this is gonna have any impact or change any of the strategies for CFI or is it just gonna change their preparation? Mike Dohren (26:56): It's definitely going to change. You know, the administration has promoted a more bank-friendly regulatory environment that comes with pros and cons. Nancy Ozawa (27:06): Yep. Mike Dohren (27:06): You know, we all know there's a little bit of a pendulum here when you take a longer lens of kind of the regulatory perspective. But the OCC has recently put out some timelines and expectations on everything from stablecoin and tokenized deposits. They've made M&A, in theory, easier, or that's the intent with some of the statements that have been made. So there will be some likely acceleration in certain types of applications. They've also approved more folks that are gonna be competing- Nancy Ozawa (27:39): Mm. Mike Dohren (27:40): ... specifically in the payments and tokenized deposit, and in many cases in the high-risk verticals seems to be where a lot of the focus is. But there's a lot of banks that that is a niche that they serve. Nancy Ozawa (27:54): Yeah. Mike Dohren (27:54): So this is gonna make it even more competitive than it's been in the past. So you're going to have folks that are not necessarily purely from a banking background, but they have the ability to do a large portion of what banks do. They have the ability to hold deposits. They, they have FDIC insurance. I mean, assuming they can get approved by the FDIC as well. Nancy Ozawa (28:16): Yeah. Mike Dohren (28:17): Um, and it seems to be a quicker launch for them, so to speak. They still have a de novo obligation and requirements similar to a bank, but their focus is different and they're gonna be aggressively courting customers. So I think that community bankers in '26, they need to step back and say, "It's coming. Stablecoin is coming. We're gonna be asked on a regular basis, what's our plan? What are we doing as an institution?" '26 is the time that banks need to have a stake in the ground of what is their plan. You know, you can choose to stay completely out of it, and it's a plan. Nancy Ozawa (28:58): Yeah. Mike Dohren (28:59): You can choose where to participate through partners and, and others. And, but I think defining what's the plan and setting a roadmap, you don't have to have all the answers for the endpoint. The regulations haven't been published yet. But we know it's coming and we know the customers are aware of this because it's in the headlines all the time. You need to educate your customer-facing teams. You need to have a, a message. Um, you don't have to have it today, but in '26, this is a really important topic f-for boards and senior management to be discussing. Nancy Ozawa (29:34): Yeah, and referring to discussing stablecoin and digital assets. Mike Dohren (29:36): Just stablecoin, tokenized deposits, understanding how your customer base may wanna take advantage of these offerings- Nancy Ozawa (29:46): Yeah. Mike Dohren (29:46): ... um, because you know they're gonna be courted on a regular basis by some household names or names that maybe aren't yet household names, but will be. Nancy Ozawa (29:55): Mm-hmm. Mike Dohren (29:55): So this is definitely a competitive threat, and I think it's high on the list. We all know it's gonna be a focal point in the payments landscape, especially the cross border eventually. Nancy Ozawa (30:07): Yep. Cross border should be huge. And, and you're right. We still have to wait for the GENIUS Act to be, you know, go into effect. Um, but I wanna- Mike Dohren (30:15): But you can do a lot of self-education before all the- Nancy Ozawa (30:17): Exactly. Mike Dohren (30:17): ... rules are written of- Nancy Ozawa (30:18): Yeah. Mike Dohren (30:19): ... focus on the business side of it. And the rule-based piece of it is probably gonna be the easier one for folks to sift through- Nancy Ozawa (30:28): Mm-hmm. Mike Dohren (30:28): ... especially if you're working through partners, understanding who are the potential partners, what are the different roles that a community bank could choose to play. Or how do I need to think about working with others in this capacity so that I'm ready when my institution or my core or whatever constraints I might identify when we're ready to, to have a game plan? Nancy Ozawa (30:53): Yeah. I've heard at a recent conference that they were suggesting one of the steps is to create a task force. Organizing the task force might be the pre-step in order to get ready for that education and have those conversations internally as well. Mike Dohren (31:07): Absolutely. I mean, banking's an interesting industry- Nancy Ozawa (31:09): (Laughs). Mike Dohren (31:11): ... where you have payment mechanisms that are very antiquated but don't go away. You know, you still have, you still have checks. Nancy Ozawa (31:19): We still have checks, yeah. Mike Dohren (31:20): You have checks, you have wires, you have ACH, but you have faster payments through the FedNow, through RTP. So how all of these things coexist, banking itself is very interesting because the legacy systems don't necessarily, quote, die or go away, but the volumes continue to move down because there's an, an economic benefit to the customer or a perceived economic benefit in some cases. But we're in a society now where the instant is important, right? Everybody wants confirmation that, "Oh, I did something. Is it completed?" It, customers get very frustrated if they don't know if something happened. Even at the most basic level, if you sign up for a conference and you don't get a confirmation that you're registered, you already have a negative feeling about the whole event before you even consider who you're gonna talk to or what you're gonna do or what's your focus. It's a very basic example. Nancy Ozawa (32:16): Yeah. Mike Dohren (32:17): If you think about that and put it in your bank's perspective, they wanna know that the payment they tried to send to their family member or their friend or their business transaction is done because then they put it out of their mind and they move on to the next task. Nancy Ozawa (32:31): Exactly. Mike Dohren (32:32): So as payments get faster and friction gets removed from the process, it's important to customers, it's important to the whole delivery systems of, of financial institutions. So not having a strategy is probably the biggest, one of the bigger mistakes you can make in '26. Nancy Ozawa (32:51): That's really a good point because, you know, look at Amazon, DoorDash, Uber, they've all played into that instantaneous. So your conference example is a good one. So having a strategy to address it, very key. That's a very good point that you make. Let me ask you, we've kind of covered, we've been all over the map as far as different topics bankers need to be thinking about. Is there any that we didn't touch on that really should be on a banker's radar? Mike Dohren (33:17): Uh, that's a good question. I think one of the key things, especially for those that maybe are earlier in this digital transformation, don't overwhelm the system and don't, don't try to choose the perfect, most complicated way to change your organization. Nancy Ozawa (33:35): Mm-hmm. Mike Dohren (33:36): But choose one, two, three, four, whatever capacity you think you have as an organization. Have some early success. Focus on those critical journeys that your organization's gonna need to go through. Because in most cases, it touches a lot on the different departments. It's not just one group that can do these things in isolation. Nancy Ozawa (33:55): Right. Mike Dohren (33:56): I know that the ones that a lot of organizations have put time and effort into is the onboarding, which makes sense. It's the first activity that a customer does with your organization. You're setting the foundational piece of the customer experience with that onboarding process. So it's a critical one. I think that's a logical place for a lot of organizations to focus on. How do we leverage different tools and partners to enhance the customer experience? I think having that idea of here's the ones we're absolutely going to accomplish this year is important and not try to spend all your time sorting through the list of 72 items that you might do because you're gonna just be stuck in decision making. Nancy Ozawa (34:41): Right. I think that's a really good lesson to, to leave the listeners with is you've gotta pick a short number of those and focus on them and execute on them and you can come back to that list later, but you don't wanna execute on all of them. You wouldn't do all of them very well, nor... You'd overwhelm your employees, as you mentioned before. Any other lessons to leave the listeners with? Mike Dohren (35:02): I think that banking's a simple business, but a very complex business. It's important that the team and the culture, there needs to be a deliberate effort to engage the teams and bring them along to be more accepting of change. Nancy Ozawa (35:18): Yeah. Mike Dohren (35:19): You don't want the leaders to say, "I'm just gonna do it the way I've always done it." You need folks that set an example. You need folks that are open to these changes that the tools can bring. That idea of, how does the team embrace and support and message? That's really critical, I think, to the success of these initiatives because there are gonna be some that have hiccups and speed bumps or that don't succeed. But the team has to understand that you did the best you could and that wasn't the right one, so you move on and you do something else. You've gotta be willing to try another one. You've gotta be willing to have some of those initiatives fail. Nancy Ozawa (36:02): Yeah. That's an important part as far as your culture to en- embed that sense of you're gonna take a risk and you may fail, but it's a learning exercise and you're willing to try it again and have people that are open to making those changes, as you said. So I think that's an important thing, and a lot of times that starts at the top. Mike Dohren (36:21): Yep. Nancy Ozawa (36:21): Those who are in charge of projects or even the top of the organization setting that standard, setting that role model that everybody needs to see. Mike Dohren (36:30): Yeah. I do think sometimes people at lower levels in the organization are the ones that have the best ideas. Nancy Ozawa (36:35): Oh, yeah. Mike Dohren (36:36): When you're talking about efficiency initiatives or customer outreach types of initiatives, that may be the group that can deliver the most potential ideas for your organization to consider. Nancy Ozawa (36:46): Absolutely. Mike Dohren (36:47): Those may be the voices that you wanna make sure are heard, um, in the organization. Nancy Ozawa (36:53): You know, you made me think of one of our guests, Dennis Snow. He had consulted with Disneyland. And to your point, Mike, they went and they talked to housekeeping. So, you know, not the, the senior folks. And they gave so many great ideas. The housekeepers were actually taking the little stuffed animals that the kids had bought and rearranging them on the bed or turned on the TV and stuck them in the front and had these little vignettes that they would come home to after a very long day at the park. And the experience just soared. And it was just because people were trying out different things, and management had decided to ask and got all these wonderful ideas. So to your point, th- lots of people have great ideas. They're not always at the top. They might be the ones touching the customer more directly. Mike Dohren (37:40): Yeah. I mean, that completely makes sense. Nancy Ozawa (37:43): So to summarize some of the lessons, be open to change, be willing to learn from those, be willing to talk to people who are closers to the customer. I think this was a great conversation. We've hit a lot of different topics. I think that should be interesting to all of our listeners to get perspectives on different parts of the organization and to be able to get ready for 2026. It's gonna be another exciting year. Mike Dohren (38:05): Another exciting and challenging year, that's for sure. Nancy Ozawa (38:08): Exactly. With risk comes reward, they go hand in hand for sure. So thank you so much, Mike. And thank you to our listeners for joining in for this forward-looking conversation on Banking Out Loud. If you haven't already, be sure to check out our other episodes. We've mentioned a few of them. Subscribe so you know when a new one drops. And we're always looking for new ideas on future topics and guests, so if you have an idea or maybe you'd like to join us as a guest, send us an email at bankingoutloud@pcbb.com. Thank you again for listening. And from all of us at Banking Out Loud, here's to a strong and successful 2026.