Headshot of Steve Williams

In the world of finance and banking, the landscape is constantly shifting. To gain insights into the challenges and opportunities facing banks and credit unions today, we sat down with Steve Williams, Partner, President, and Co-Founder of Cornerstone Advisors. With over two decades of experience advising hundreds of financial institutions, Steve offered valuable insights into the industry. In this blog, we’ll explore the key takeaways from our conversation, including the challenges of liquidity, the importance of digital transformation, and the future of regional and community banks.

The Vision Behind Cornerstone Advisors

Cornerstone Advisors was founded with a vision to serve a dynamic group of entrepreneurial financial institutions. These institutions, with assets ranging from one billion to ten billion (or even more in today’s context), faced common challenges and opportunities. Steve Williams and his team recognized the value created by these banks and credit unions and aimed to help them thrive.

Their initial focus was on providing authoritative performance data, as they realized a lack of such data for this group. Additionally, they aimed to assist these institutions in navigating the complex world of technology vendors. Many of them were buyers, not builders of technology, and Cornerstone Advisors became trusted advisers in this regard.

The Birth of Gonzo Banker

Gonzo Banker, a blog at Cornerstone Advisors, adds a unique dimension to their work. The name “Gonzo Banker” was inspired by Steve’s partner, Terrence Roach’s admiration for Hunter S. Thompson. It symbolizes gritty, truth-telling, continuously learning bankers who get things done. These “Gonzo bankers” are the linchpin of organizations, even without all the resources or the best technology.

Liquidity Challenges in Banking

One of the primary challenges discussed in the conversation was liquidity. Banks had grown complacent due to a prolonged period of quantitative easing (QE) and intervention during the COVID-19 pandemic. They had become accustomed to a surplus of liquidity, thanks to the Federal Reserve’s actions.

However, the landscape changed dramatically as inflation became a concern. The Federal Reserve implemented the fastest, steepest short-term rate hike in history. This caused a sudden shift in interest rates and triggered “price elasticity” in deposits, making depositors more sensitive to the rates offered by banks. This, coupled with the rise of challenger banks and fintech competition, intensified the battle for deposits.

Advice for Community Banks and Credit Unions

Steve offered several key pieces of advice for community banks and credit unions looking to win back deposits:

1. Embrace Digital: In a digital-first world, invest in a great digital front door for customer acquisition and retention. Continuously improve the digital customer experience.

2. Data Utilization: Leverage customer data to identify segments that are moving money and discover opportunities for price differentiation. Consider whether to pay more for new money versus existing deposits.

3. Speed of Money Movement: Focus on the velocity of money movement. Ensure that customers can easily open accounts and move money quickly, meeting their expectations in an always-on digital world.

4. Regulatory Preparedness: Develop strong liquidity management and liquidity stress testing plans. Demonstrate to regulators that you are well-prepared for any liquidity challenges.

The Future of Regional and Community Banks

While acknowledging the challenges ahead, Steve emphasized his belief in the future of regional and community banks. He predicted significant consolidation in the industry as institutions that cannot adapt to the rapidly changing landscape either merge or disappear. However, he also foresees the emergence of modernized regional niche institutions, potentially based on industry focus or specialized banking services.


In a world of constant change, agility, customer-focus, and data-driven decision-making are essential for banks and credit unions. By embracing the digital age, optimizing their risk positions, and continually seeking efficiency, these institutions can thrive in the evolving banking landscape.

Listen to Steve’s episode of 22 Minutes in Lending here.