Florida Banking May 2024

THE MAGAZINE OF THE FLORIDA BANKERS ASSOCIATION WWW.FLORIDABANKERS.COM SEPTEMBER 2020 Interamerican Bank: Honoring Heritage and Shaping Futures THETHMEAMGAZGINAZEINOEF TOHFETFHLEOFRLIDOARIBDAANBKAERNSKAERSSOACSISAOTICOIANTIONWWW.FLORIDABANKERS.COM SEPTEMBER 2020 WWW.FLORIDABANKERS.COM MAY 2024

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Editorial & Executive Offices 1001 Thomasville Road, Suite 201 Tallahassee, FL 32303 850-224-2265 www.floridabankers.com Advertising & Production Offices 250 Prairie Center Dr., Ste. 300 Eden Prairie, MN 55344 952-835-2275 www.nfrcom.com For advertising information, contact Erica Nelson Advertising Sales Executive 763-497-1778 Erica@NFRcom.com For reprints or single issues, contact 800-336-1120 Statements of fact and opinion are made on the responsibility of the authors alone and do not imply an opinion or endorsement on the part of the officers or members of FBA. Florida Banking is published 11 times annually with a combined issue in December/January. Subscription price is $50 per year for nonmembers. Postmaster, send address changes to Florida Bankers Association, P.O. Box 1360, Tallahassee, FL 32302. Copyright 2024 Kathy Kraninger President and Chief Executive Officer Florida Bankers Association kkraninger@floridabankers.com Pamela Ricco Executive Vice President and Chief Operating Officer A

THE MAGAZINE OF THE FLORIDA BANKERS ASSOCIATION

VOLUME 39

NUMBER 4 MAY 2024

ON THE COVER 8 - - - - - - - Interamerican Bank: Honoring Heritage and Shaping Futures CONTENTS 4 --------- Chair’s Message: Become a Strong Advocate for Our Industry 6 ----- President's Perspective: 7 - - - - - - - - - Readership Survey 12 ----- Government Relations: The 2024 Session is Finished, What Happens Now? 13 - - - - - - - - - - - 68th Annual Washington, D.C. Trip 18 - - BancServ Endorsed Partner: Defending Against ATM Skimming Attacks: Strategies for Florida Banks 20 - - - - - - - - Trust and Wealth Management: Digital Property: The Intersection of Legacies, Technology and the Law 24 - - - - - College Costs Add Up – The FBEF Can Help! 25 - - - - - - Personal Transactions 27 - - - - - - - - - - - - - - Kudos 30 - - - - - - - - Upcoming Events 31 - - - - - - -Advertising Directory 31 - - - - - - - - - -Did You Know? A Washington Update and D.C. Fly-In Recap

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Florida Bankers Association pricco@floridabankers.com

Brooke Harrison Publications Director Florida Bankers Association bharrison@floridabankers.com

4

6

Jose Cueto Chair

Derek Jones Chair-Elect

Bill Penney Immediate Past Chair

Fab Brumley Second Immediate Past Chair

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On the Cover: Interamerican Bank President and CEO Agustin Velasco

Photos by Benjamin Rusnak

Florida Bankers Association: The voice of Florida banking since 1888.

CHAIR’S MESSAGE

BECOME A STRONG ADVOCATE FOR OUR INDUSTRY

BY JOSE CUETO, FBA CHAIR

A s my year as your FBA Chair comes to a close, I want to remind you of the importance of getting involved in the association’s advocacy efforts. As we know from the recent legislative session, our industry is facing challenges from all sides, and every one of us has a role to play in educating our policymakers and the public about the good work we do for our customers and communities. In March, I joined more than 50 Florida bankers for the FBA’s 68th Annual Washington, D.C. Trip. We had the opportunity to raise concerns about the regulatory “tsunami” our industry is experiencing, and to get our policymakers’ thoughts on the issues of the day. FBA President and CEO Kathy Kraninger moderated excellent panels on banking policy issues and political perspectives. Our group also spent a morning at the ABA Washington Summit, during which we heard from knowledgeable speakers like former FDIC Chair Jelena McWilliams and former Vice Chair of the Federal Reserve Randy Quarles on how the industry should respond to the extensive regulations coming from Washington, including through litigation. We visited the FDIC for a briefing with FDIC Chair Marty Gruenberg, hosted an evening reception at Florida House for members of the Florida Congressional Delegation, and spent a day on Capitol Hill having conversations with legislators and policymakers like Acting Comptroller Michael Hsu, OMB Director Shalanda Young, House Financial Services Committee Chairman Patrick McHenry, and U.S. Senator Rick Scott (among others!). Recognizing the impact that policymakers in Washington have on our industry, it is essential that we participate in these trips. I learned there’s a saying in Washington, “It’s not who you know, but who knows you.” As with our customers, we need to build

relationships with policymakers and legislators so we are their “first call” when a banking issue comes up. Building those relationships starts at home, in our local communities. Your legislator may go to your gym or your church, or shop at the same grocery store. Maybe their kids go to the same school as yours. Maybe your legislator lives next door, or in the neighborhood. We need to find that connection just as we do with our customers at the bank. Extend an invitation to your local legislator to visit a branch, or to meet your customers. When the FBA hosts leadership events in your area, show up to represent your bank and your local community. Be prepared with timely questions. Be willing to speak out about how your bank is helping customers achieve their financial goals. The FBA needs to know about these local relationships so that they can help us nurture them. Our policymakers don’t want to hear from us only during a crisis. When we build genuine connections, our representatives will not only be willing to pick up the phone and listen, but more inclined to call us first for an industry perspective. Advocacy is and always has been at the core of the FBA mission. As members of the association, we have a role to play in supporting advocacy efforts and educating the public, the media, and our lawmakers about what we do. The FBA provides many opportunities big and small for our banks to participate in advocacy. If you have feedback or questions for the FBA, or simply wish to learn more about getting involved, I encourage you to reach out to the team or to Kathy Kraninger directly. The FBA needs not only our feedback but also our active participation to grow and adapt with the changing times.

4 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

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PRESIDENT'S PERSPECTIVE

A WASHINGTON UPDATE AND D.C. FLY-IN RECAP

BY KATHY KRANINGER, FBA PRESIDENT AND CEO

A fter a pretty rough Congressional session last year, Congress is clearing the decks and getting down to – at least some – business! At the end of March, during our D.C. Fly-In and nearly six months into the government’s fiscal year, the negotiations over government funding finally resulted in a deal. Moreover, the foreign aid package was enacted, FISA renewed, and TikTok addressed. Whatever your position on the policies and funding, the institution had been paralyzed over these issues. Policymaking is compromise, and the votes on these bills were definitive and bipartisan. Having them resolved enables Congress to focus on other business for the American people. And there are items on the FBA’s agenda that Congress could address. While the window is short in an election year, we will continue to raise the issues that matter and work with our partners to progress them. Thank you to all who attended the D.C. Fly-In! We had some fantastic speakers, conversations, and opportunities to engage with policymakers – as you will see in the photos shared in this issue. By print time, I will have joined a group of our Florida bankers in D.C. again – this time for the ICBA’s 2024 Capital Summit. There are opportunities for Florida bankers to get involved with the ABA and the ICBA – if you have any interest, please let me or the FBA team know. In terms of the agenda, here is a rundown of the top issues: Reining in Regulatory Overreach We want Congress to exercise oversight of the excessive regulation coming from all corners of Washington. It is not just the financial regulators that banks have to be concerned about, but the Federal Trade Commission, the Labor Department, and the SEC, just to name three more. The sweeping regulations drive up compliance costs and denigrate banks’ ability to serve their communities and customers, while not achieving their purported purpose. Even worse, often

where there is some consumer protection goal, these rules have the opposite impact by reducing access to credit for those who are most in need of bank services. FBA is working with ABA, ICBA, the U.S. Chamber, and others to counter these harmful regulations. Opposing Interchange Price Controls We strongly oppose the Credit Card Competition Act (S. 1838/ H.R. 3881) which would (ironically) reduce the number of credit card issuers competing for consumers’ business, wring out the competitive differences among card products, decimate card rewards programs, and put the nation’s private-sector payments system under government control. Credit Unions and the Farm Credit System Congress should hold hearings on the tax treatment of these entities. Oversight failures and permissive regulation have created multi-billion-dollar, tax subsidized institutions that are the functional equivalent of commercial banks, competing in the same markets, for the same customers, offering the same services. Fair competition is what we seek and hearings are a good starting place. Restricting the Sale of Mortgage “Trigger Leads” Please support the bipartisan Homebuyers Privacy Protection Act (H.R. 7297, S. 3502), which would restrict the sale of trigger leads. “Trigger leads” create a flood of unwanted solicitations, compromise consumer privacy, and create consumer confusion and complaints. The Homebuyers Privacy Protection Act strikes the right balance between safeguarding the financial privacy of our customers and fostering competition in the mortgage market by restricting the sale of trigger leads to consumers who provide their consent or lenders that have an existing mortgage relationship with the consumer. Creating a Safe Harbor for Legal Cannabis Please pass the SAFER / SAFE Banking Act (S. 2860 / H.R. 2891) to create a federal safe harbor

6 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

of Government Affairs Gina Rotunno if there are issues you want to know more about! As always, the FBA team wants to hear your feedback, concerns, and accolades great and small. They are necessary to serve you better, so keep it coming! And I look forward to seeing you around the Sunshine State!

for banking legal cannabis-related businesses. S. 2860 passed the Senate Banking Committee last year. The SAFE Banking Act has passed the House seven times in previous Congresses. Check out our Members Only Federal Issues page and please contact me or FBA’s Assistant Vice President

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8 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

Honoring Heritage and Shaping Futures Interamerican Bank:

I nteramerican Bank is a family-owned institution based in Miami, committed to serving its community and making a difference in people’s lives. While rooted in Cuban American heritage, Interamerican Bank’s commitment extends to serving everyone in its diverse clientele. The bank takes pride in ensuring that every individual who walks through its doors receives the highest standard of care and attention. The bank was founded in 1976 by Agustin C. Velasco and continues under the leadership of his son, Agustin Velasco, Jr., who currently serves as a board member, president and CEO. “It is a significant weight and responsibility that I carry,” Velasco Jr. said, speaking of his father’s legacy. “Our resilience is evident in our ability to navigate through challenging economic situations, including

he would receive the same services he was getting in the other town. Months later, he went to cash a check, and the manager informed him that he could not give him the money immediately, as he had to wait several days to cash it. And so his search to establish another institution in San Nicolas began. Velasco Sr. discussed the opportunity of opening a branch with the executives of Banco Formento Agricola who took an interest in the project, and they wanted Velasco Sr. to take charge of the new bank. Therefore, Banco Formento Agricola opened a branch in San Nicolas de Bari, and Velasco Sr. began his illustrious career as a banker. Velasco Sr. fled communist Cuba in 1961 and moved to South Florida. In Miami, he was first employed at the Florida Pipe Company where he earned 90 cents an hour and eventually transitioned

to having his own boxed lunch truck route. It took many years to realize his dream of opening a bank in Miami, as he faced challenges like the language barrier and raising the necessary capital. However, he continued to work hard and would have discussions with a fellow banker from Cuba about opening a bank in Miami. Together they began the necessary process, getting the paperwork and permission to open it, and on September 10, 1976, Interamerican Bank opened its doors to the public. “My father always stressed that customer

the Great Recession, and even surviving the savings and loan crisis of the 1980s and 1990s, which greatly impacted the banking industry in the United States. I understood the importance of taking every necessary measure to ensure the bank remained operational and secure.” Today, as the bank approaches its 50th anniversary, Interamerican Bank has $260 million in assets and five banking locations. Velasco Jr. has the privilege of working alongside two of his daughters, Christie and Lindsie Velasco, as well as his

“WE ARE ALL ABOUT IMPROVING THE CUSTOMER’S EXPERIENCE WITH US. WE GO OUT OF OUR WAY FOR OUR CUSTOMERS.”

- AGUSTIN VELASCO, JR.

service is the key to everything,” Velasco Jr. said. “Community is at the heart of everything we do at Interamerican Bank. We know our customers by name… and now, they are proudly bringing their sons and daughters to join our banking community as well.” Velasco Jr. joined his father at the bank in 1988. He was an electrical engineer at the time earning his bachelor’s degree from the University of Miami, but he took on special projects at the bank, grew his knowledge, and earned his MBA from Nova Southeastern University. With the support of the Board of Directors, Velasco Jr. spearheaded the bank’s expansion, establishing three additional branches and opening a loan servicing center in West Palm Beach, which has since developed into a fully-fledged branch. Interamerican Bank, Continued on page 10

niece Isis Pacheco Velasco, daughter of his brother-in law Ibrahim Pacheco, who serves as Chairman of the Board. A portrait of the esteemed founder Agustin C. Velasco is displayed in the lobby of the main branch, symbolizing his widespread recognition and respect within the community. Velasco Sr. was a hardworking entrepreneur and Cuban exile. The idea of becoming a banker was sown in his hometown of San Nicolas de Bari, Cuba, where the absence of more than one bank spurred his determination to become a banker. Velasco Sr., as the executive distributor of Polar Beer in San Nicolas, maintained his bank account in another town. However, the manager of the bank in his hometown convinced him to bring his account over and guaranteed him that

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The Interamerican Bank management team, from left to right: Ulises Suarez, VP/Information Technology Manager; Enrique Masson, CPA, SVP/CFO; Isis Pacheco Velasco, Esq., LL.M, VP; Mario Escobar, SVP/Senior Lending Officer; Lindsie Velasco, AVP/Human Resources Manager; Ibrahim Pacheco, Chairman of the Board; Agustin Velasco, Jr., President, CEO & Board Member; Christie Velasco, CPA, AMLCA, VP; Eiler Valle, VP of Operations; Jose Touzet, SVP/Bank Operations.

“We have an exceptional team, all deeply committed to enhancing our operations and expanding the bank,” Velasco Jr. said. “The atmosphere is relaxed and inclusive. We treat everyone with the respect and kindness we would want for ourselves. My priority is ensuring everyone’s happiness. We function as a close knit unit; we’re more than colleagues, we’re a family.” Velasco Jr. is thankful for the opportunity to introduce his daughters and niece to the banking industry. “It’s a great honor to have my daughters and niece join the bank. They bring with them impressive qualifications: Christie is a CPA, Lindsie is an accountant, and Isis is an attorney. Their fresh perspectives and innovative ideas are invaluable,” Velasco Jr. said. Vice President Christie Velasco, with seven years of experience at the bank, shared, “We value the opportunity to contribute to different areas of the bank and have gained valuable insights into the decision making processes and the intricacies. Coming from an audit background, this has allowed me to expand my knowledge beyond the audit scope by being able to see the bigger picture and gain a deeper understanding of how various departments and processes interact.” Velasco Jr.’s niece Isis Pacheco Velasco has worked for the bank for more than 10 years and currently

Interamerican Bank, Continued from page 9

Velasco Jr. continues his father’s tradition of an open-door policy, remaining accessible to both his team and bank customers. “I personally greet customers as they arrive,” Velasco Jr. said. “I find this policy invaluable, where all customers can speak directly with the bank’s president; it allows me to connect with our customers, grasp their concerns, and explore ways to assist them, from real estate loans to deposit accounts.” Additionally, the bank purchased a van to provide transportation for an elderly customer and others, after learning she had walked 20 blocks to reach the branch. This is just one example of how the bank has stepped up to serve its customers in unconventional ways. “We are all about improving the customer’s experience with us. We go out of our way for our customers,” Velasco Jr. said. The bank is also in the process of continuing renovations of its main office to modernize the building and “enhance the experience for both customers and employees,” a project that commenced approximately two years ago. The renovation of conference rooms and the completion of the accounting and lending operations departments have already been achieved.

10 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

serves as one of its vice presidents. Isis said, “This is more than just a job to us; it’s our family’s legacy. Any changes in the bank directly impact us, motivating us to strive for its continual enhancement.” As the team at Interamerican Bank looks to the future, Velasco Jr. recognizes that the banking system is changing. He looks to Christie, Lindsie, and Isis to bring new ideas to the table and attract the younger generation. “We are adapting and evolving to meet the demands of the modern era,” Velasco Jr. remarked. "The inspiration to introduce Zelle came from Christie, recognizing its popularity as a preferred payment method among the younger generation—an alternative to platforms like Venmo. This strategic move has enabled us to retain many young customers, and transactions via Zelle have only seen continued growth since its implementation. My daughters and niece play a pivotal role in spearheading the bank’s expansion into the digital realm. Lindsie, who is the Human Resources Manager, has significantly improved the efficiencies in the HR department by implementing digital job onboarding and performance evaluations. We also offer free debit card transactions through Publix’s Presto system and mobile deposit capture, allowing convenient check deposits by simply taking a picture.” “We’re committed to maintaining the bank’s financial well-being and ensuring its resilience in the face of potential challenges. Our approach to banking is highly conservative, prioritizing robust capitalization and liquidity to navigate economic

uncertainties such as the pandemic and inflation,” Velasco Jr. said. He added, “My father started something truly remarkable for all of us. Banking is a great profession that brings immense satisfaction through helping others… and we have helped a lot of people and made a meaningful difference in the lives of many.”

MEET AGUSTIN VELASCO Agustin Velasco currently holds the positions of president, CEO, and board member at Interamerican Bank. He joined the bank in 1988 as vice president; through his exceptional leadership and strategic acumen, he ascended to the position of CEO in 1998 and became a member of the Board of Directors in 2009. In 2012, he assumed the dual role of president and CEO, while also continuing his service as a member of the board.

Velasco has navigated Interamerican Bank through periods of change and challenges with resilience and foresight, driven by a dedication to innovation and customer-centric values. Originally from Cuba, Velasco moved to Miami, Florida as a child and has since called it home. Driven by his love for Miami and a commitment to his community, he embarked on a career path that began as an electrical engineer and eventually led him to the banking sector. Velasco completed his Bachelor of Science in Electrical Engineering at the University of Miami in December 1977, followed by a Master of Business Administration from Nova Southeastern University in August 1992. In addition to his professional endeavors, Velasco has been deeply involved in education and community service. He taught courses in the electronics department at Miami-Dade Community College, has served on the Community Depository Institution Advisory Council for the Sixth Federal Reserve District, and is an honorary member of the Kiwanis Club of Coral Gables and a member of the Latin Builders.

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GOVERNMENT RELATIONS

THE 2024 SESSION IS FINISHED, WHAT HAPPENS NOW?

BY ANTHONY DIMARCO, EXECUTIVE VICE PRESIDENT, GOVERNMENT AFFAIRS

T he 2024 Session has ended and we are already looking ahead to the rest of the year and the 2025 Session. Before you know it, the August primary and the November general election will be behind us, and we will sprint into the 2025 Session. We are beginning the next FBA political cycle, that is, elections, grassroots, and the 2025 Session. Elections Election year is upon us again. In Congress, all House members and Sen. Rick Scott will be on the ballot. For the Florida Legislature, all 120 House members and 20 Senators are up for election. Term limits will claim eight Senators and 15 House members who cannot run for reelection. As Senate seats open due to term limits, House members will jump races and seek the Senate seats. It is shaping up to be a busy election year. To help us prepare, we take part in candidate interviews through the Florida Chamber Political Institute. Taking part in the Chamber’s activities lets us see and hear candidates for state office. We expect to be all around Florida meeting with candidates and incumbents. Please let us know what candidates you wish for the FBA to support. We are always looking for input from our members. You see these candidates in your local clubs, churches, and in business settings. While we cannot always support a member-recommended candidate, it goes a long way to help us make the decision in the next election. As always, we will send you information on which candidates BankPac supported. We will also send you information on the constitutional amendments that will be on the November ballot. Grassroots We will be going to cities across Florida setting up small lunches with legislators and 1-12 of our members. This will give you great facetime to discuss banking legislation and your community. We encourage you to attend if we are in your area. We also want to show legislators why all banks, but especially community banks, are important to Florida.

To that end, we are developing a “bring your legislator to your bank” package to help you host these events. Both of these are important because you need to know your legislators before you ask them for help. I have witnessed firsthand how a legislator positively responds when a banker they know asks them for help during Session. So please get to know them now. Furthermore, it's important that elected officials truly understand how their bills affect banks or impact their local communities. It is incumbent that we show them through grassroots events. 2025 Session In the meantime, the FBA is putting together our legislative agenda for the 2025 Session and we need your help. Please send us any ideas for fixing any state regulatory burden you are facing. Also, please let us know what legislation can be passed to help your financial institution succeed. We get our best legislative ideas from our members. Please take the time to send them to us. Legislation that we are exploring for the 2025 Session is to curtail fraud against our members and their customers. We have heard from several legislators and members about the uptick in fraudulent activity. We want to follow up this Session’s SB 556 on financial exploitation of vulnerable adults with additional anti fraud legislation. Last Session, a bad bill to stop wire fraud was filed; unfortunately, the cure would have only hurt our members so we worked to keep it from passing. But we expect more anti-fraud legislation in the 2025 Session, so it is incumbent on us to fix the problem through our own bill, before it is fixed for us. We are also looking at other criminal statutes that may impact our members or their customers. We will need time to work with law enforcement on these issues prior to Session, so the sooner the better. Finally, as always, please contact Kenneth, Gina or me for any questions on any state law or regulation. We will be glad to help.

12 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

68TH ANNUAL WASHINGTON, D.C. TRIP MARCH 18-20, 2024

PHOTOS COURTESY OF BROOKE HARRISON, FLORIDA BANKERS ASSOCIATION

T he FBA was in Washington, D.C., to meet with key policymakers and raise issues affecting banks, particularly the impact of the regulatory overload our industry is facing and the toll it will take on banks’ ability to serve customers and lend in their communities. We heard from speakers Andrew Olmem, former U.S. National Economic Council (NEC) Deputy Director, and former Treasury Deputy Secretary Jonah Crane on a panel about banking policy issues. Former U.S. Sen. Cory Gardner and former Rep. Lacy Clay spoke to our group and shared their political perspectives. New to the agenda was an evening reception at Florida House with members of the Florida Congressional Delegation, including Rep. Darren Soto (D-FL Kissimmee), Rep. Aaron Bean (R-FL Fernandina Beach), Rep. Daniel Webster (R-FL Clermont), Rep. Carlos Gimenez (R-FL Miami), Rep. Scott Franklin (R-FL Lakeland), and staff from the offices of Rep. Sheila Cherfilus-McCormick (D-FL Miramar), Rep. Lois Frankel (D-FL West Palm Beach), Rep. Byron Donalds (R-FL Naples), Rep. Brian Mast (R-FL Ft.

Pierce), and Rep. Cory Mills (R-FL New Smyrna Beach). The FBA delegation spent a morning at the ABA Washington Summit and heard from former FDIC Chair Jelena McWilliams and former Vice Chair of the Federal Reserve Andy Quarles. Our schedule also included discussions with David Hirschmann, executive vice president of the U.S. Chamber of Commerce; Laurie Schaffer, Treasury, acting assistant secretary for Financial Institutions; OMB Director, The Honorable Shalanda Young; Acting Comptroller of the Currency Michael Hsu; Chairman Patrick McHenry; and engaged in Congressional briefings with: Rep. Andy Barr (R-KY) Rep. Blaine Luetkemeyer (R-MO) Rep. Debbie Wasserman Schultz (D-FL) Rep. Vern Buchanan (R-FL) Rep. Mario Diaz-Balart (R-FL) Rep. Bill Huizenga (R-MI) Sen. Rick Scott (R-FL) Rep. French Hill (R-AR).

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14 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

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ANNUAL MEETING THE BREAKERS | PALM BEACH, FLORIDA JUNE 16-19

WWW.FLORIDABANKERS.COM/ANNUALMEETING

DON’T MISS THESE KEYNOTE SPEAKERS:

DON YAEGER

DR. LINDSEY PIEGZA

SCHEDULE AT-A-GLANCE

SUNDAY, JUNE 16

TUESDAY, JUNE 18

WEDNESDAY, JUNE 19

Economic Outlook with Chief Economist Dr. Lindsey Piegza

Continental Breakfast

Board Meetings* Joint Board Dinner* *By Invitation or Board Members Only

General Session on Generative AI with Ron Shevlin General Session with David Peterson

Breakout Sessions

Networking Lunch

MONDAY, JUNE 17

Exhibitor Tear-Down

Breakout Sessions

Golf Outing Exhibitor Set-Up Regulator Panel National Trade Group Panel Welcome Reception Past Chairman’s Dinner*

Peer Group Discussion

Awards Luncheon & Keynote Speaker Don Yaeger

Spouse/Guest Outing to the Henry Morrison Flagler Museum

Closing Reception

Panel Discussion on FedNow

Closing Dinner & Entertainment: Deuces Wild

BankPac Silent Auction

REGISTER TODAY! WWW.FLORIDABANKERS.COM/ANNUALMEETING

BANCSERV ENDORSED PARTNER: STS GROUP

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DEFENDING AGAINST ATM SKIMMING ATTACKS: F

STRATEGIES FOR FLORIDA BANKS

BY ADAM STEPHENS, CHIEF DEVELOPMENT OFFICER OF STS GROUP

I n the digital age, the convenience of ATMs and ITMs has become an integral part of modern banking. However, with this convenience comes a growing threat: ATM skimming attacks. These attacks have been on the rise in recent years, posing significant risks to both financial institutions and their customers across Florida. In this article, we will explore the rise of ATM skimming attacks and offer strategies that Florida banks can implement to prevent them, drawing on credible sources and industry best practices. The Rise of ATM Skimming Attacks It is estimated that skimming costs financial institutions and consumers more than $1 billion each year. Last year in Florida, the number of compromised cards, including all types of cards, was 7,901 — up from 2,873 in 2019. That’s a 175 percent increase.1 The increase in ATM skimming attacks can be attributed to several factors: 1. Technological Advancements: Criminals are using increasingly sophisticated skimming devices, making it harder for customers to detect them. 2. Increased Connectivity: ATMs are more connected than ever, making them vulnerable to remote attacks and data theft. 3. Evolving Fraud Tactics: Criminals continuously adapt their techniques, making it challenging for banks to keep up with the latest threats.

4. High Reward, Low Risk: ATM skimming is an attractive option for criminals because of the potential for high financial gain with relatively low risk compared to other forms of theft. The Impact of Skimming Attacks in Florida Skimming attacks across the state of Florida are happening consistently and more frequently. Here are recent skimming events in Florida that made local news headlines: • Skimming devices were reported in Petaluma and Rohnert Park, according to authorities.2 • Morgan Hill police found six skimmers and a tiny camera at two ATMs owned by Bank of America. Just a few months before, another set of skimmers was found at another location in the same area.3 • The FBI is asking for the public’s help in finding three men wanted in a South Florida ATM skimming scam that swiped information from hundreds of bank customers. Authorities say a group placed the skimmers at 18 bank branches, resulting in the theft of information from at least 407 customers. 4 • Two men are accused of skimming debit card information from ATM locations throughout the Florida Panhandle to steal more than $11,000 from victims. “During that period, it was reported to us that approximately 700 cards were skimmed at various locations,” the sheriff’s office said in a release. 5

1. https://www.cbsnews.com/miami/news/card-skimming-on-the-rise-across-south-florida/ 2. https://www.northbaybusinessjournal.com/article/news/how-to-protect-yourself-from-atm-skimmers-according-to-the-fbi/

3. https://www.nbcbayarea.com/news/local/morgan-hill-card-skimmers-bank-of-america/3160849 4. https://www.nbcmiami.com/news/local/trio-wanted-by-fbi-in-south-florida-atm-scam/2016668/ 5. https://www.fox10tv.com/2023/04/25/700-cards-skimmed-bank-atms-northwest-florida/

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maintenance and servicing of ATMs are crucial to ensure their security. Encourage Customer Vigilance: Educate customers about the risks of ATM skimming and provide guidance on how to detect and avoid compromised ATMs. Promote the use of chip-based cards, as they are less vulnerable to skimming compared to magnetic stripe cards. Secure ATM Locations: Ensure that ATMs are placed in well-lit, high-traffic areas with good visibility to deter criminals. Regularly trim nearby foliage to eliminate hiding spots for potential attackers. Encryption and Security Updates: Implement encryption on ATM card readers and regularly update software to protect against emerging threats. Ensure that ATMs are compliant with industry standards, such as EMV (Europay, MasterCard and Visa). Employee Training: Train bank employees to recognize the signs of potential skimming devices and to follow established security protocols in case of a security breach.

Preventing ATM Skimming Attacks To safeguard their customers and protect their reputation, Florida banks must take proactive measures to prevent ATM skimming attacks. Here are some effective strategies we recommend: Deploy Anti-Skimming Technology: Invest in anti-skimming technology that can detect and prevent skimming attempts. Anti-skimming devices serve as a formidable defense mechanism against skimming attacks. These devices are designed to detect and prevent skimmers from successfully harvesting card data. They come in various forms, such as electronic jammers, card and PIN shields, and encryption technologies. The primary objectives of anti-skimming devices are: • Detection: Anti-skimming devices utilize advanced technologies to identify suspicious devices or modifications on ATMs and ITMs. These devices can detect irregularities in the card reader’s magnetic field, signaling the presence of skimming equipment. When a problem is detected, the card reader is locked down and a signal is sent to the alarm panel and alert

Collaborate with Law Enforcement: Maintain a strong relationship with local law enforcement agencies to facilitate quicker response times to incidents and investigations. ATM skimming attacks represent a growing challenge for banks in Florida

monitoring service. Video Verification can also be used here to identify the suspect. • Prevention: By rendering skimming devices ineffective, anti-skimming technology prevents criminals from obtaining crucial

IT IS ESTIMATED THAT SKIMMING COSTS FINANCIAL INSTITUTIONS AND

CONSUMERS MORE THAN $1 BILLION EACH YEAR.

card data. These devices serve as a strong deterrent, forcing criminals to look for easier targets. • Customer Confidence: Implementing anti-skimming measures fosters trust and confidence among customers. Knowing that their financial institution prioritizes security reassures them that their transactions are protected, encouraging continued use of ATMs and ITMs. • Cost Reduction: Skimming incidents not only harm customers but also inflict significant financial losses on banks and financial institutions. By investing in anti-skimming technology, these institutions can save money by preventing fraud and avoiding potential lawsuits. Regular Inspections: Banks should conduct frequent, comprehensive inspections of their ATMs to check for any signs of tampering or skimming devices. This includes examining card readers, keypad overlays, and any exposed cables. Regular

and around the world. With the advancement of technology, criminals have become increasingly sophisticated in their tactics. However, Florida banks can adopt a multi-faceted approach to mitigate these risks, ranging from regular inspections and anti skimming technology to educating customers and collaborating with law enforcement. In the battle against ATM skimming attacks, staying one step ahead is essential to protect both the financial well-being of your customers and the reputation of your institution. By implementing the strategies outlined here and staying informed about emerging threats, Florida banks can better defend against this evolving menace and maintain a secure banking environment for all. Adam Stephens serves as the chief development officer of STS Group. STS stands ready to help your organization secure and protect your branches, ATMs, and ITMs from fraud and theft. You can contact him directly to schedule an introductory consultation. He can be reached by phone at 256-957-8018, or by email at adams@stsgrp.com.

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TRUST AND WEALTH MANAGEMENT

DIGITAL PROPERTY: THE INTERSECTION OF LEGACIES, TECHNOLOGY AND THE LAW

BY LEE POSKANZER, CEO OF DIRECTIVE COMMUNICATION SYSTEMS AND THE DIGITAL DEATH CLINIC

ORIGINALLY PUBLISHED IN WEALTHCOUNSEL QUARTERLY, WINTER 2024; UPDATED APRIL 2, 2024

C an you hear it? The quietest trillion-dollar problem is lingering in the background. Today, the average American has more than 250 online accounts,1 with 97 percent2 of Americans owning smartphones. These trends didn’t exist 10 or even 20 years ago. This brings about a new and expanding challenge for trust and estate practitioners: how to handle digital property in the planning process. Digital property within a trust or estate plan can’t be managed in the same way as physical property. Fiduciary laws, Terms of Service Agreements (TOSA), and client privacy all factor in. And don’t forget to add the ongoing introduction of new asset types and new uses of digital property. This changing landscape demands the revamping of policies and procedures within practitioners of all categories. In this article, we’ll elaborate on the 21st Century problem that trust and estate practitioners are facing, discuss alterations in fiduciary laws, and dive into effective planning strategies your team can utilize going forward. The 21st Century Problem The technology revolution and its evolution has brought about some significant changes, from electric vehicles and artificial intelligence to robots and automation. The underlying component driving all of these innovations is digitalization. Unlike the 20th Century, when innovators and practitioners were focused on physical process improvements and productivity, the 21st Century has shifted gears to prioritize back-end improvements and new products and services, such as email, mobile financial services, new currency types, title transfer, digital imaging and other efficiencies that replace trips to the banks, retailers and governmental offices. It has become the preferred method for maintaining memories, personal collectibles, and documented records.

When you think of digital assets, what comes to mind? One of the most common answers is cryptocurrency. Although cryptocurrency is a predominant digital asset, it’s not the only one that you need to consider when trust and estate planning for clients. Tax law and succession planning have historically focused on physical assets. This traditional way of thinking can have serious repercussions when it comes time to address and access digital property, including the controls set by the ECPA and RUFADAA laws, TOSAs, and the inherent characteristics of online accounts and the management of their contents. And now, the IRS has included digital property in tax codes but it is not complete and will require modification in the future. Would you be surprised to know that social media and email accounts are at the top of the list of most asked-about assets when clients seek digital advice? You not only need to be able to identify digital property to include in the planning process, but you need to ensure you are complying with all regulations. Below is a short list of digital properties that your clients might have. This is not comprehensive as the types of accounts are boundless and ever-increasing: Email, Cloud Storage, Artificial Intelligence (AI), Password Managers, Internet of Things, Virtual Collectibles, Social Media, Investments, Banking/ Loans, Crypto/NFTs, Domain Names, Online Games, Text Messages, Loyalty Accounts, DNA Tracing, Personalized IP, E-Commerce Sites, Online business, and In-home Entertainment. When a tech innovator creates a new app, asset or feature, do you think they’re concerned with succession planning? Innovators focus on developing products that sell well to consumers, entertain account holders, educate users, or facilitate a process — not on the account holder’s death or the people they leave behind. ChatGPT, the Metaverse, NFTs, personal avatars

1. Dashlane 2014 2. https://news.gallup.com/poll/393785/americans-close-wary-bond-smartphone.aspx

20 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

account holder and conducts activity as the account holder. Account holder impersonation can violate guiding TOSAs and privacy laws. Effective vs. Ineffective Succession Planning Effective succession planning goes well beyond ensuring all items are covered in a will. In fact, statistics show that memories shared with loved ones are the most important component of the legacy individuals leave behind. Ineffective succession planning avoids the allocation and assignment of digital property without a monetary value. As trusted advisors, you need to be sure your strategies encompass this vital component. First, you need to understand how clients want their property distributed upon death. Clients want control over their privacy and who sees their contents. Statistics support that 43 percent of a client’s digital property should be deleted upon death. This includes personal accounts, photos, and videos that clients believe will hinder their legacy. Another 30 percent of accounts within the estate should only be accessed with prior consent. 6 These statistics confirm that a large proportion of clients don’t want anyone to see certain account contents. Instead, they want these accounts deleted and forbidden from falling into the hands of beneficiaries, executors or trustees. Clients are turning toward advisors for help facilitating these wishes, presenting a perfect opportunity to build trust with your clients. First, they need to understand that they have options and choices when it comes to their digital accounts. Next, they need to know which strategies fit best into their trust and estate plan. An effective succession planning approach limits the use of password sharing. For one, password sharing can be time intensive. With the number of digital accounts on the rise, an individual can have hundreds of varying passwords. The first hurdle to overcome is the custodian’s ability to use the IP address of the device being used to login into the decedent’s account. That will trigger security protocols to authenticate the account holder. Even if you do locate the correct login information, it’s highly likely the two-factor authentication protocols will be initiated, which may send a code to an email or mobile phone that will need to be accessed or require accurate and correct responses to a series of personal security questions. This time is better spent grieving and making other financial decisions and handling family matters. Not to mention that account holder impersonation is a violation of laws and breaches the Terms of Service agreements. With too many log-in attempts, the account could be permanently locked out, taking years of legal proceedings to gain access, that may or may not result

with AI intelligence, ICOs, and crypto wallets are all relevant innovations within the digital property realm. Your team needs to be able to identify these digital assets and develop an effective game plan for your client’s trust and estate plan. Fiduciary Laws are Evolving to Encompass Digital Assets The Covid pandemic skyrocketed the demand for trust and estate planning, as Americans who dealt with a serious case of COVID-19 were 66 percent more likely to develop a will.3 Even more surprising is the piqued interest among younger generations. Historically, older generations and those with serious health conditions would be the group of clienteles to engage in trust and estate planning. Now, we see the distribution even out, with 71 percent of Americans aged 21 to 35, and 81 percent of Americans aged 36 to 42, interested in a trust. These age ranges pull ahead of the 64 percent of Americans aged 51 and older who are interested in creating a trust. 4 When you look at the investments and digital property acquired by age group, nearly 60 percent of millennial investors hold digital currency. 5 Lawyers and estate planners aren’t factoring the shift in investments and digital property when preparing trusts and other succession planning documents, despite fiduciary laws adapting to changing conditions. There are now three main definitions of digital assets: 1. Legal – An electronic record in which an individual has a right or interest. 2. Financial – Although there is no formal definition, the financial interpretation of digital assets is commonly cryptocurrencies and NFTs. 3. IRS – “Any digital representation of value that is recorded on a cryptographically-secured distributed ledger or any similar technology” as specified by the Secretary, including convertible virtual currency and cryptocurrency, stablecoins, and non-fungible tokens (NFTs). The most popular definition is the financial one, but the legal definition encompasses what digital assets truly are: any form of digital property. Advisors who narrow their view of digital assets to the financial definition are missing out on a key component of trust and estate planning. It’s also important to differentiate between “disclosure of account contents” and “account holder impersonation.” Data disclosure is when the custodian posts raw data to the cloud so that data disclosure designees can retrieve and evaluate the data to find important matters. On the contrary, access to the account means someone logs in as if they’re the

Digital Property, Continued on page 22

3. https://www.legalzoom.com/articles/estate-planning-statistics 4. https://www.privatebank.bankofamerica.com/articles/generational-financial-estate-planning-priorities. html#:~:text=84%25%20of%20millennials%20believe%20it,than%20their%20silent%20generation%20forebears 5. https://www.fool.com/investing/2022/11/10/60-of-millennial-investors-own-cryptocurrency-shou/ 6. NO SOURCE from PG 23 Powerpoint

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