Eastern Bank: a 199-year-old lender becomes a tech pioneer

LIKE other local bankers, Bob Rivers is counting the cost of red tape. At the end of 2015 and 2016 Eastern Bank, a Boston lender of which he is the chief executive, held its balance-sheet below $10bn by briefly parking some deposits elsewhere. Now Eastern—America’s oldest and largest mutual bank, founded in 1818—has crossed the threshold. It will thus become subject to a limit on the debit-card fees retailers pay to bigger banks, and lose $9m of revenue, Mr Rivers says. Other rules will also kick in, costing $6m. The $15m total is one-sixth of Eastern’s pre-tax earnings.

At least, unlike America’s many much smaller lenders, Eastern has the wherewithal to tackle another costly burden: information technology. It is just small enough to be called a “community bank”, but also just big enough to invest in IT. Being a mutual is essential too, Mr Rivers says: he does not have to answer to shareholders about quarterly profits.

In 2014 Eastern set up an…Continue reading

This post was originally published in the Economist.

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Eastern Bank: a 199-year-old lender becomes a tech pioneer

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