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Frank Sorrentino III Of ConnectOne Bank On The Future Of Money and Banking

An Interview With David Liu

See the Opportunity: Do you see the opportunity? It’s all around us. Find it. Grab it. Go for it. Sure, opportunities are often shrouded in risks that most people won’t take, but don’t let that stop you.

The way we bank has changed dramatically over the last decade. It was not too long ago when you had to wait in line in a bank to deposit money. Today things are different. You can do your banking without ever walking into a bank. In addition, the whole concept of money has changed. In the recent past, money usually meant bills and coins. But today, the idea of money has expanded to include digital currency and NFTs. What other innovations should we expect to see in banking in the short and medium-term?

To address this, we are talking to leaders in the banking, finance, and fintech worlds to discuss the future of banking and money over the next few years. As a part of this series, I had the pleasure of interviewing Frank Sorrentino.

Frank Sorrentino III is Chairman, CEO, and Founder of ConnectOne Bank, an industry-leading commercial bank. Since its founding, ConnectOne Bank has delivered strong growth and performance metrics as it developed a unique model to serve small-middle market clients. Under Frank’s leadership, ConnectOne has achieved numerous milestones, including completing the first bank IPO since the Great Recession and a series of mergers & acquisitions, propelling the company to become one of the largest banks headquartered in the state of New Jersey. Most recently, Sorrentino led the acquisition of BoeFly, a FinTech company that operates a business lending marketplace specializing in the franchise space.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us about your ‘backstory’ and how you got started in this industry?

Before launching ConnectOne Bank, I served as president of FSS Construction, Inc., a family-owned construction business that specialized in custom-built luxury homes. In 2005, I launched ConnectOne Bank when I realized that the banks in my community lacked the financial features and superior client service I was looking for to support my construction business. To help solve this problem, I decided to build a bank that would always put the client at the forefront of the business model. Since opening ConnectOne Bank in 2005, we have grown across New Jersey, New York, and Florida with over $8 billion in assets and 23 locations. In February 2013, we became the first bank to go public since the Great Recession.

Can you share the most interesting story that happened to you since you began your career?

The most interesting thing that has happened to me since starting my banking career would be taking ConnectOne Bank public, back in 2013. The timing of the IPO was critical, as ConnectOne was the first bank to go public since the Great Recession. We were also the first bank to benefit from President Obama’s JOBS act, which recently celebrated its 10th anniversary. Going public evolved ConnectOne Bank from a relatively small operation to a more sophisticated business — and the environment in which we were successfully able to raise capital makes the experience more unique. I see this as a seminal point in my life because it is a threshold that not many people get to cross, and it was very transformative, not only for me as an individual and leader, but also for the bank as a whole. I went from being a bricklayer to building an SEC reporting bank. I have been able to work with and meet people that I otherwise never would have, while simultaneously helping the small business community grow businesses of their own.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

My favorite quote is by Winston Churchill: “The pessimist sees difficulty in every opportunity; the optimist sees opportunity in every difficulty.” I have always been of the mindset to keep moving forward and innovating; even when I find myself in a difficult situation, I always try to take a step back and evaluate what unique opportunity exists in that moment. Whether it has been our IPO story or our response to the pandemic, I try to apply this lesson to each of the challenging and uncertain moments we encounter.

Ok wonderful. Let’s now shift to the main focus of our interview. Can you tell our readers about the most interesting projects you are working on now?

ConnectOne Bank has always worked to be an industry-leading bank, offering our clients the new wave of the future, and so we have a lot of exciting projects underway. We have been implementing cloud-banking to help clients onboard and decrease loan approval time via nCino, a software which provides end-to-end loan workflow solutions for our bankers. This software allows banks to build workflows and approval processes, while minimizing manual-based processes. Utilizing our fintech tool, Built, we are educating our construction clients to apply technology and automation tools in order to enhance efficiencies. ConnectOne has continued to dip our toes into fintech with the acquisition of Boefly, a business marketplace that connects franchisees to tools and resources to launch a successful franchise business. Most recently, we joined the USDF Consortium, which looks to the future of blockchain and digitization. At ConnectOne Bank, we cannot stand still. We are always looking for our next move to better our clients’ experience and success.

How do you think this might change the world?

ConnectOne was founded on the principle that providing resources and capital to small businesses would only help fuel our local economies. Today, the investments we are making in digitization and technology enhance our bank systems, but more importantly, double down on our mission to support and power small businesses.

What most excites you about the banking or payments industry today? Can you explain what you mean?

The most exciting part about today’s banking industry is the potential for what’s ahead. We’ve merely scratched the surface of innovation and technology that has yet to be discovered. The rise of the fintech industry has proven that so much is possible when it comes to innovation in the banking industry. The United States has always had the most robust banking system in the world and the convergence of banking and fintech only strengthens our financial infrastructure.

What most concerns you about the banking or payments industry today? What would you suggest needs to be done to address that?

The most concerning aspect of the banking industry today is that there are so many players getting involved; while innovation is exciting and necessary, there still needs to be regulation. For instance, take the emergence of new fintech companies and neo-banks: neobanks, often called challenger banks, are fintechs that offer nontraditional banking services, digitally. But unlike traditional online banks, neobanks are not FDIC insured unless they have partnered with a chartered bank. Neobanks, crypto, fintech, etc., need to have more regulation because, while innovation drives us forward, regulation keeps us safe.

How would you articulate how the concept of money has changed in recent times? Is it really a change? How is it still the same? Can you explain what you mean?

I don’t necessarily think the concept of money has changed. Going back to when Genghis Khan discovered the idea of making paper money, it has always been an exchange of value. We are doing the same thing as they did back in 1200 today. Though we are using digitized tokens, bitcoins, NFTs, and so on, it is still a medium of exchange for goods and services. The new services being used reduce friction and make the exchange of goods and services more immediate and in real-time. Banks today still resemble the banks of 100 years ago, when you would walk into a bank with a bag of gold, take some out, and save some there in a vault. Today you can do that with a bank account electronically and tomorrow you’ll be able to do it with a digital dollar.

Based on your vantage point as an insider in the finance industry, what innovations should we expect to see in banking in the short and medium term?

We should expect enormous growth from payments and evolution in digital custody of all types of assets. If implemented with the security that is provided by banks, the use of blockchain has the power to enhance much of banking’s legacy infrastructure and manual process. We are still exploring the power of blockchain within the regulatory perimeter, however I will not be surmised if we start seeing tokens reflecting ownership, instead of a deed or title. I think digitization is just at its beginning stages and there are endless possibilities for what’s to come in banking and finance.

How has the pandemic changed the way banks interact and engage with their customers?

The pandemic has definitely strengthened consumers relationship with digital platforms, regardless of the industry. We’ve changed the way we communicate, turned to online solutions, and basically, became more digitally-savvy. As a result, our expectations in client service has evolved. Additionally, as a result of the pandemic, the US Government issued the Paycheck Protection Program (PPP), one of the largest lending programs our country has ever seen, utilizing banks as the conduit to distribute funds. Many banks quickly built the infrastructure needed to support the PPP, which is now being utilized nationally across other products and services.

In your particular experience, how has the pandemic changed the way you interact with and engage your customers?

Here at ConnectOne, we’ve always taken a tech-forward approach to banking. The pandemic allowed us to leverage many of the investments we had made and respond quickly and efficiently. Being one of the first banks to offer PPP loans, we were able to help our clients thrive through difficult times. Additionally, our value of being accessible to clients whenever and wherever, proved to be a critical aspect of our positive client experience throughout the PPP loan process and pandemic.

Since the pandemic, we’ve seen more adoption of our digital tools and a larger trend of virtual meetings replacing mundane interactions, while reserving in-person visits for meaningful conversations. As a result, we’ve provided our clients with more tools, like online portals, to support their on-demand expectations, while concurrently equipping our bankers with data-driven products to support their clients.

As we have become more digitized, along with the rest of the banking and finance world, we have become quicker; we can connect with our clients at the drop of a hat and help them more efficiently.

Fantastic. Here is the main question of our interview. What are your “5 Things You Need To Create A Highly Successful Career In The Modern Finance, Banking, and Fintech industries?

My five things you need to create a highly successful career in the modern finance banking and fintech industries would be….

Look past the idea of the impossible: Don’t be dissuaded by the enormity of a task or dream. If you focus on the tasks at hand — rather than worry that they are hard or where the finish line is — you will be able to achieve what seems like the impossible.

Be Curious: Throughout my career, I’ve always kept asking “Why?” followed closely by “but why?” and then “I really don’t understand, so why?” I’ve always found that innovation is only driven by curiosity and challenging the status quo.

See the Opportunity: Do you see the opportunity? It’s all around us. Find it. Grab it. Go for it. Sure, opportunities are often shrouded in risks that most people won’t take, but don’t let that stop you.

Drown Out the Noise: Focus on what you believe, and don’t let all the naysayers hinder you. Our most robust growth spurt at ConnectOne Bank was during the Great Recession of 2008. Drown out the noise and focus on the facts. Let your clarity of purpose and passion carry you.

Don’t Forget Your Moral Compass: There are lots of intelligent people in the world, but not all of them put their talents to use for good. The business world is littered with examples of those who fall from grace. Often, those stories begin with a slippery slope. It is essential to have a moral compass, to put into focus what you have learned — from your parents, family, friends, and mentors.

How can our readers further follow your work online?

Readers can follow my Twitter (@FrankSIII) and read my Forbes blog every month.

Thank you so much for the time you spent doing this interview. This was very inspirational, and we wish you continued success.

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David Liu

David Liu

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David is the founder and CEO of Deltapath, a unified communications company that liberates organizations from the barriers of effective communication