Name: Andrew Silsby

Age: 51

Title: President and CEO

Company: Kennebec Savings Bank

About: Kennebec Savings Bank is a $1 billion state-chartered community bank, part of a mutual organization with 140 employees and offices in Augusta, Waterville, Winthrop and Farmingdale, and “KSB Anytime” 24-hour electronic banking centers in Augusta, Farmingdale, Freeport and Manchester.


What’s your biggest challenge now?

Running a community bank in a robust economy has generated very high loan demand, and the greatest challenge is generating deposits to be able to feed that loan demand. People want a local bank there when they need lending decisions and when they need to borrow money. I think the challenge for a community bank is convincing potential customers to use us on the deposit side as much as they use us on a loan side.

All of us probably are handling our money very differently after the financial crisis. People as a collective group are saving more and trying to borrow less. We were all a little scarred in the financial crisis. The biggest challenge is spreading the word on the importance of the deposit side of banking to meet the demand side.

Interests rates influence decisions. Offering deposits at prices that allow the bank to continue to grow, that’s the challenge; but the world is getting flat. The internet allows people to shop and have knowledge of products anywhere across the country or across the globe.

The regulators would be after you for offering too high a rate. It’s a tricky balance. People want the lowest loan rates and the highest deposit rates. We understand that, and people understand that. But the deposit side, it’s the importance of keeping deposits local so those dollars can go back and help your neighbors and businesses.

I am a big community bank fan. I am very proud of all the things we’re involved with, and the amount of capital we’re able to put back into the economy. It’s exciting to be involved in a lot of cool things happening. We have been able to play a small part in Cushnoc Brewing Co. and Circa 1885 and Otto’s, and all of those. We have done a Tipping Point initiative down there. It’s good stuff. I drive down there on Water Street (in Augusta) and there aren’t many parking spaces. It used to be a ghost town.

What’s the best advice you have received?

If you think you are invincible, put your finger in glass of water, take it out and watch how quickly the water settles. It’s been something that’s been rummaging around my family, so who recorded that? I don’t know. But it’s a good reality check to stay humble and realize we’re all replaceable.

The important piece is to work hard and do a good job, and the rewards will come.

How do you foster creativity in yourself or your staff?

I don’t have a lot of difficulty with creativity. I tend to have lots of ideas, so I think in many respects it’s leading by example in the organization. Ideas sort of bubble out of me. I am probably the creative person. I’m a pretty fast decision maker, so to keep motivated that way is not hard for me at all. The challenge for the staff at the bank is, “What do we do with all these ideas?”

My mother answered the phone for the IRS for customer calls, and my father was director for legislative research at the Legislature for 27 years, but he was also a self-taught artist.

I grew up around the dinner table and the breakfast table with my mother critiquing my father’s art. He would bring his latest painting out and put it on the easel, and my mother would tell him all the things he needed to correct on it. They had a great relationship and they still do. So I get a little bit of creativity, and my banker’s side comes from my mother. I’m a good blend of both of them.

I think creativity and problem-solving is really second nature to me. I think motivating the staff is leading by example.

What’s your biggest fear?

I think probably everybody’s biggest fear is not being picked for the kickball team in grade school. I think for the adult version of that, it’s not being relevant and the business not evolving to what the customer expectations are of the time. It’s staying relevant particularly in a business where there’s a lot of competition from outside the industry.

Some people probably think a bank is a bank. Our job is to convince them otherwise.

Financial services can come in a lot of different ways today that don’t necessarily follow the same set of rules. For example, my son has accounts here at Kennebec Savings Bank, but he just got a debit card for the money in his Venmo account (a mobile payment service that allows U.S. users to transfer money by using a mobile phone app) and he was one of the first people to get his debit card. Here’s Venmo, that’s not in the banking industry, getting into offering debit cards and getting into the payment stream.

So it’s making sure the bank stays relevant. The biggest fear would be the opposite of that, that we don’t remain relevant.

How big is the role for cybersecurity in modern U.S. banking?

Enormous. It is the topic of conversation for every vendor and for everything we do. We have a whole vendor management process where we have our IT professionals are watching the security and movement of data and how it’s encrypted.

We push our vendors very hard, and we have walked away from vendors because they want rights to be able to contact customers. For example, if we did business with an organization that’s going to help us with some technology, they want our customer data so they can sell it or solicit from them. No way. We’re not going to do business with you. I can tell you that company is doing business with other banks in Maine. They have signed that contract, and they have the right to do that. It’s possible that those companies have negotiated that (provision) out.

It has become an enormous part of our business, in how we operate and how we encrypt data, where the data sits and who has access to it.

Not every employee in the bank has access to customer data. I don’t know if everyone knows that. If it’s not in your realm, you’re on a need-to-know basis.

We have now seen — and nationally — the amount of cash withdrawals from ATMs is on the decline. Electronic payments, whether that’s your debit card or your CMP bill coming out of your account or direct deposit of your paycheck have really taken hold. A lot of people go out on a Saturday night without any cash. If they do need cash, they can go to Hannaford or Shaw’s and take twenty bucks when they buy their stick of gum. So ATM usage has been fine, but withdrawals are going down. The number and amount of withdrawals are going down. I don’t know that ATMs will be on every corner.

We have been talking in the industry about going to a cashless society, but I don’t think we’ll get there. There is an anonymity with cash that it won’t ever go away, but it’s on the decline. Debit card fraud for chip-enabled retailers is way down. The chips are working. Where we are struggling is we are not ever going to stop the fraud until we get the mag stripe off the card.

In particular, the gas station portion of the industry keeps getting relief because they don’t want to replace the mag stripe readers on all of the gas pumps across the land. But we’ve got to get to the point where the mag stripe comes off of that card.

If you go to Europe, there are clerks that don’t even know what a mag stripe is, because Europe is so far ahead of us on the chip card, and we were so worried about changing these machines over. We are seeing pockets of the industry that have done the full conversion and we’re seeing huge declines in fraud loss. I know some of the chip readers didn’t work in the beginning and some of them are still confusing and there are still some challenges there because there’s no consistency and uniformity.

There’s another component to this. Other countries quickly (make) a governmental decision on which technology to jump on to. They adopt it and set the standard.

The United States tends to let the free market do that. I’m a free market guy, so I buy into that. But there comes a point where we’ve got to decide if we’re going to have DVD or Blu-ray. We end up splintering the market, and that’s partly what goes on with these machines. If we would just set with a standard — I know it destroys the free market side. So there’s a happy medium to let the technology develop just enough to decide which horse to ride and then just go with it.

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