The banking industry is navigating headwinds on multiple fronts as institutions strive to preserve a culture of highly personalized and long-term strategic relationships with clients. From shifting election dynamics to overseas conflicts, Nevada’s financial leaders are tasked with guiding clients through uncertain times while tackling the rise of sophisticated AI-driven fraud, fostering collaborative relationships with competing institutions and adapting to shifting client expectations.
Recently a panel of banking experts met at a roundtable sponsored by Nevada State Bank to discuss the culture of banking in Nevada and the many challenges it faces on a national and local level. Connie Brennan, publisher and CEO of Nevada Business Magazine, served as moderator for the event. These monthly roundtables bring together different industries to discuss issues and solutions.
What Uncertainties Is This Industry Facing?
TERRY SHIREY: The biggest challenge facing banking in Nevada is economic uncertainty. Our clients are feeling it.
DAVID NAVARRO: There are three things that I have observed with the economic uncertainty. Businesses that we work with are more cautious. They are not looking to make major investments, or they are more thoughtful about it, where a few years back they were making investments right and left. Secondly, we are seeing credit tighten within banks with all the uncertainty that is going on in the world because of how that will impact prices and maybe revenue for companies. Banks do not want to take enormous risks. And then lastly, the tourism aspect is interesting. It is more pronounced here in Southern Nevada. We do not work directly with the casinos or the Strip, but our customers do. And any impact on tourism has an impact on our customers as well.
IVAN FERRAZ: On the flip side of that, speaking for Nevada only, in 2024 the state revenue was 40% gaming and in 2025 it was 25%. A lot of that growth has been picked up by the diversification of the economy. For example, mining, data centers, logistics, and manufacturing are new industries with different credit profiles, but industries that still need access to capital. That has created a lot of opportunities as well.
MICHAEL PIZZI: The economic growth engine here is limited by some of the macro things that affect Las Vegas. I would say healthcare and education would be the two that drives our ability to attract new business here. And the other thing would be the lack of land. That is a big thing from a development standpoint. Those are not directly banking issues, but they do impact growth, which in turn impacts banking.
SHIREY: Another thing that adds to the uncertainty that we do have is that it is yet again an election year and I do not see a deceleration in the pace of change that we have been experiencing. We are all grappling with change that is happening at an accelerated pace, whether it is AI, stablecoins, or international conflicts. It used to seem like these were black swan events that would happen every few years. Now it seems like a couple of times a year we are dealing with these big changes.
NAVARRO: We had a period a few years ago where there was very high inflation. We saw interest rates rise dramatically and very quickly. That created a little bit of a shock. Then we started to see some stabilization. Then there were trade agreements being drafted that sparked uncertainty and people were apprehensive. They wanted to know how that was going to impact them because maybe they imported goods from that country to the US. And now people are worrying about the increase in oil prices and how that is going to impact their bottom line because they have to ship stuff and so forth. It has changed over the years, but whenever there is a hint of uncertainty, the market reacts usually negatively.
PHYLLIS GURGEVICH: At this moment in time the biggest threat to banking is the Clarity Act which is a follow-up to the Genius Act. The Genius Act set forth some rules regarding payment of stablecoins. And one of those rules was that payment coin issuers cannot provide yield or interest but that payment stablecoin is to be used for innovation and payment processing. The Clarity Act is the follow-up that provides some market structure but there is a loophole. Now, instead of just using the payment stablecoin for payment innovation it would allow third parties to incentivize people to move their money out of wherever it is now, hopefully in an insured savings account, and into unregulated and uninsured stablecoin wallets or accounts.
The risk to the consumer is twofold. The first is that they are unregulated and uninsured, and it is not like we have not seen crypto assets disappear. And the second risk is to get access to credit and lending. The number for Nevada according to the U.S. Department of the Treasury is an estimated loss in deposits of somewhere between $0.7 and $1.4 billion, which equates to a loss in loans to Nevadans of between $0.6 and $1.2 billion. We are hoping that gets fixed.
FERRAZ: Since we do have an election year coming up in November, things may change a little bit with respect to tariffs. They may not be an issue next year. But by far and large, interest rates and everything else will likely be the same.
SPENCER HAFEN: It will depend on how long the war lasts. If it lasts throughout this year, then we will see higher inflation. We will see strain on the economy.
FERRAZ: Once the new Fed takes place, that is going to play a key role in the voting decision of whether or not [interest] rates stay flat, increase, or decrease.
PHILIP POTAMITIS: They are going to be flat to slightly up by the end of the year in the short term. I do not see them going down.
FERRAZ: We are seeing one rate cut between now and the end of the year.
SHIREY: The market is telling us probably not, but the market can be wrong at any point in time. The hope coming into the year was that we were going to see some interest rate cuts, but at this point in time it does not look like that is going to be happening.
BRUCE FORD: No one really knows. We are in a room full of high-quality, well-educated bankers, and we have heard different prognostications and understandings. That is the real uncertainty.
PIZZI: And you could get a room full of economists, and you would still have just as many different interpretations.
How Prevalent Is Fraud in Banking?
PIZZI: The biggest fraud that we see, and I am sure this is consistent across all banks, is still old-school check fraud like when somebody steals your check out of the mailbox and then doctors it.
HAFEN: Businesses should be using positive pay to try to prevent that.
GURGEVICH: Do not mail a check if you can get around it and if you can, pay using a different method. But if you are going to mail a check, do not mail it in a window envelope that screams, “I have a check inside.”
FERRAZ: Checks are also expensive. Anything that is labor-intensive is expensive. But if you absolutely need to have checks, you need to have positive pay with payee validation at the minimum.
PIZZI: But even with positive pay too, there is always potentially customer error. We had one case where a client was going a million miles an hour and the exception popped up and they did not look closely enough, and they approved it anyway. We can’t prevent that kind of stuff from happening. That is where the education piece comes in. We really must talk to our customers, tell them to slow down and make sure they look into what they are approving because if the human error piece creeps in, there is not much we can do.
VJOLLCA TARJAN: Europe is way ahead of us. They do not even write checks anymore. Everything is all done electronically.
PIZZI: But we are Vegas, and there are still a lot of employees who want their check. They want to go to the casino and cash it. There is no convincing them to change that.
FERRAZ: We are also seeing a rise in imposter fraud, primarily because of AI impersonation, but also due to a big increase in ransomware, at least in the mid-corporate side. We have 3,000 people who just monitor ransomware and fraud protection in the bank trying to protect clients. And it is increasing very rapidly.
GURGEVICH: AI has been embedded in bank operations for quite a while, and fraud prevention is one of the biggest ones. On the cyber fraud side, the number is like 98% of the attempts are caught. Unfortunately, about 2% is still a lot and still harmful to customers. But fraud is a big umbrella, and a lot of people put scams underneath that. Any of those risks where your customer is going to end up with a loss of their funds is where I see AI being deployed the most to prevent or identify those transactions that seem out of line.
HAFEN: The bad guys have figured out AI and they are using AI more than we are using it and at a quicker rate than we can implement it. That is why you will see AI more in banks on fraud prevention than anything else, because it is the only way to combat their use of AI.
PIZZI: The other thing too is just flat-out education. We all take courses every year, but our customers do not. We had one case just the other day where the client was contacted by one of his vendors and told there was a new account number. He even called to verify it and it turned out that he sent it to a bad account. He fell for the fraudster. Educating our customers about all these developing scams is really important.
TARJAN: Being proactive, educating our clients and making sure that they have the right internal protocols in place on dual control is a consistent conversation. Certain companies have high turnover and making sure that they have all the right resources from a bank perspective is very important.
How Competitive Is This Industry?
FORD: There is a friendly competition. We are certainly competitors, but it is friendly competition and we are collegial.
SHIREY: We work together directly on a lot of larger loan transactions. It is important that we have good relationships with each other because we know Vegas, and we need to work together to support large loan transactions and large businesses here in our state.
NAVARRO: There are so many things that we collaborate on and participating together on those larger loans is one of them, but I am personally impressed to see where we are today compared to seven years ago. We now have a robust cohort of people who have gone through some commercial banking classes before they even get their first internship or entry-level job. I see a lot more collaboration today. Obviously, we are going to compete, and it is okay to compete because at the end of the day, the beneficiaries of our competition are the customers and businesses out there.
POTAMITIS: [Another example is during the recession] with the Paycheck Protection Program (PPP). We went out as an industry and together we saved hundreds of thousands of jobs in Nevada.
NAVARRO: PPP is a great example. There was great participation with the banks and the regulators in how to structure the program in a way where the banks were not going to have to carry some of the losses associated with loans that they typically put on the books. That way they were incentivized to go out there and put those loans on the books for the benefit of the economy. That was an important piece of collaboration between the banks and the regulators.
GURGEVICH: And you all did amazing work. It was 24/7. It was crazy with the antiquated systems. One banker sent me 27 different screenshots of different ways the computer had crashed through the night while he was trying to run these loans. But you all rose to the challenge, and I never get tired of bragging on you. Nevada does not hit the top of lists very often, but you all deployed funds to businesses that needed it, and Nevada ranked 12th in their ability to reach those small businesses. That is commendable.
TARJAN: That was the time when there was true collaboration. Every leader and every banker in town called each other. We all worked so closely. We made sure our clients were taken care of.
How Important Are Relationships in Banking Today?
POTAMITIS: They are very important. We are doing less transactional business and more relationship business.
FORD: The relationship means everything. It takes a while to cultivate, but once you do, you do not want it to be transactional.
POTAMITIS: Particularly on the business side with commercial banking, it gives clients a lot of comfort knowing that there is a local leader and hopefully a local decision maker, especially on the credit side, [available]. It gives them a sense of ease because now when questions come up while we are reviewing their credit and their responses, they feel like at least they are giving it to someone who may understand their market a little bit better and know what they are dealing with personally. That goes a very long way.
FERRAZ: Most clients nowadays are going beyond lending. They are not only looking for a credit provider. They are looking for a strategic partner that will be with them in the long term. That is why cultivating those relationships is extremely important.
SHIREY: It is about being able to serve clients throughout their entire life cycle. From that first business loan all the way to the point where they want to sell their business. It is about having investment banking options available for them and then being able to manage their wealth. That is what the most successful banks have figured out.
PIZZI: I was sitting with a client just a month ago, and she was telling me about the experience she had with a bank that she was working with at the time and it was traumatic. She was literally in tears 20 years later telling me about this story of how difficult it was and how they were on the verge of losing everything. They fought and clawed their way back and now are in a much better position, but that type of story is very common. Probably everybody in this room has a client that was this close to losing everything and their bank either worked with them or did not work with them. That either meant a lot or left a super bad taste in their mouth.
What Shifts Have You Seen in Client Demands Recently?
PIZZI: When you look at the job report it has been pretty flat. The only growth that we have seen is in the medical space. Tech has been laying people off because of AI innovation and finance has been largely flat to negative. Medical is really the only area that has been solidly growing for the last six plus months.
POTAMITIS: We have also seen a demand for technology. Banks have to be more technology providers than just banking services in general.
SHIREY: For consumers, it is not as important to have as many branches as we used to, but they still want to know what branch is within a reasonable driving distance.
PIZZI: They want to know that there are people [they can talk to]. That is the key.
POTAMITIS: If you can get high touch with high tech together, that is the most successful.
PIZZI: Whether they find those people in a branch or they find those people in an office, we are all tired of calling and getting generic AI answering machines that tell you to input all your information, and then finally after 15 minutes you get somebody on the phone and you have to tell them all the stuff you just told the robot computer that answered. When you can have somebody pick up the phone or go into a branch and talk to a real live person, that is valuable.
