Event News

A Recap of the 2026 BAFT Regional Bank Conference

The 2026 BAFT Regional Bank Conference, held in Houston on October 21–22, brought regional and community bankers together with policy experts, infrastructure leaders, insurers, technology providers and compliance practitioners. Through keynotes, fireside chats and panels, speakers looked at how geopolitics, tariffs and energy shocks are reshaping trade, and at how regional banks can compete in cross-border payments, fight financial crime with AI, and build the next generation of talent. A theme ran through the two days: in a volatile world, deep client relationships, transparency and practical problem-solving matter more than ever, and institutions that pair them with the right partners and tools will be well placed to serve their clients.

In this recap:

Challenges Confronting US Foreign Policy with a Focus on the Middle East

Speaker: Amb. David M. Satterfield, Director, Baker Institute for Public Policy, Rice University

Ambassador Satterfield framed today’s geopolitical risks against a bigger backdrop: rising deficits, interest costs and pressure on Treasury paper, a problem the US shares with Japan, the UK and France. Into that fragile frame, he argued, two external shocks have been added over the past 18 months: tariffs and the conflict in the Gulf. Both are feeding inflation. He then walked through what the conflict means for energy markets, what options the administration has, and how the Gulf states are already working to reduce Iran’s leverage over the Strait of Hormuz.

Key Takeaways

  • Two shocks on a fragile frame: Satterfield argued that tariffs and the Gulf conflict have landed on top of rising deficits and pressure on Treasury paper, adding to inflationary pressure.
  • The real price of oil: In his view, drone risk in Hormuz and the Red Sea has driven off underwriters and ship owners. He estimated this adds at least $30 a barrel above the prices quoted on screens.
  • A winter squeeze on fuel: Satterfield noted that, with an estimated half of Russia’s refining capacity knocked out, diesel and heating oil are rising faster than crude, and a cold European winter could add pressure.
  • A contest of endurance: He described the Gulf situation as a test of who can hold out longest, and said he expects new bypass routes built by Gulf states to sharply reduce Iran’s leverage within about three years.

Fireside Chat: Supply Chain Logistics and Global Trade Challenges, View from Port Houston

Interviewer: T.J. Raguso, Group EVP, International Banking & Correspondent Banking, Zions Bancorporation. Speaker: Chris Edwards, Interim CFO, Port Houston

Chris Edwards, a Houston native with 25 years in maritime logistics and energy, gave transaction bankers a look at the customers behind their letters of credit and payments. He walked through the 52-mile Houston Ship Channel, which serves Port Houston’s eight public terminals and some 200 private terminals and is a major engine for the Texas and US economies. He explained why the port has held up through recent supply chain shocks, how Project 11 was delivered, and why diesel costs and workforce shortages are the risks to watch.

Key Takeaways

  • Know the physical supply chain behind the transaction. Knowing how goods actually move helps bankers anticipate clients’ needs for letters of credit, payments and FX.
  • Disruptions redraw trade corridors, and banks should follow. The verified jump from about 200,000 to 350,000 TEUs a month shows how shifts bring new trade flows, counterparties and financing needs.
  • Infrastructure investment signals client opportunity. Project 11 and its verified ~$113 billion a year in benefits point to growth in the import, export and manufacturing businesses banks serve.
  • Watch logistics clients’ working capital. Edwards’ point about diesel straining small trucking companies becomes a reminder to watch clients’ cash flow and liquidity.

Trade and Foreign Policy

Moderator: Kat Zaveri, SVP, Global Payments, StoneX. Panelists: Gayle Jacobs, SVP and Political Risk Leader – US & Canada, Marsh; Mark Garfield, Head, Global Financial Institutions, Zions Bancorporation

This panel brought together a banking view and an insurance view of how foreign and trade policy are affecting clients. Mark Garfield started BAFT’s Tariffs and Trade Policy Discussion Group in early 2025, when clients were unsettled by fast-changing tariffs. Eighteen months on, he said, most companies have found ways to adapt. Gayle Jacobs described risk tools that can help along the way. Live polling showed shipping disruption and added cost as the biggest recent impact on attendees’ clients.

Key Takeaways

  • Clients have adapted: Garfield shared stories of how businesses responded, from California pistachio growers posting a record year to companies rethinking their international operations entirely.
  • Tools for a volatile market: Jacobs pointed to trade credit insurance as one tool that may help companies manage the risk of buyers who can no longer pay.
  • Look deeper into the supply chain: Jacobs noted that exposure can look small among direct suppliers and much larger one level down, and encouraged clients to understand exactly what their coverage includes.
  • Bankers as trusted advisors: Garfield described his role as knowing the client, helping them grow, and bringing in partners when needed.

Future of Cross-Border Payments for Regional Banks

Moderator: Yenner Karto, Managing Director & Head of International Banking Services, First National Bank of Pennsylvania. Panelists: Michael Salerno, VP, Global Banking & Institutional Payments, First National Bank of Omaha; Carsten Hils, Co-Head Global Payments, Marex; Matt Petrik, Head of FX Product, Derivative Path

The panel set out to cut through the hype and give a realistic view of where cross-border payments are headed for regional banks. Senior management attention is rising as headlines about DLT, stablecoins and faster payments pile up. But the biggest change panelists see is on the client side, where tolerance for complexity has disappeared. The discussion covered ISO 20022 as a business opportunity, how to decide what to build, buy or partner on, and how, in the panelists’ view, service quality and certainty can help regional banks compete.

Key Takeaways

  • Certainty over speed: Panelists said clients want to know where a payment is, what it costs and when it will land, and that predictability often matters more than how fast it arrives.
  • ISO 20022 as a business opportunity: In the panel’s view, richer payment data can help banks spot client needs, such as FX hedging for suppliers in new markets.
  • Build what’s unique, partner for the rest: Panelists suggested investing in the client relationship while partnering for payment networks and accounts that are uneconomical to run alone.
  • Transparency builds trust: Panelists described sharing payment tracking with clients and keeping pricing clear and simple as ways to earn lasting client confidence.

Talent and Workforce Challenges: The Greying of the Industry

Moderator: Daniel Pinho, COO, BAFT. Panelists: Madlena Demirchian, International Manager, Commerce Bank; Mark Garfield, Head, Global Financial Institutions, Zions Bancorporation (stepping in for Paul Warfield, The Huntington National Bank)

This session took on what may be trade finance’s most important long-term challenge: a looming retirement cliff, and how to attract, train and keep the next generation. A quick show of hands suggested about a quarter of the room expects to retire within five years. Panelists paired an early-career view with a veteran manager’s view on what draws people into the industry and keeps them there.

Key Takeaways

  • A visibility problem, not a job problem: Demirchian cited an ITFA study finding that 83% of early-career professionals entered trade finance by chance, yet 82% report high job satisfaction once they join.
  • Flexibility and growth keep talent: Demirchian said strong teams, flexible work and room to shape one’s own role are what make people stay.
  • AI and the judgment gap: Panelists asked how new staff will build judgment if AI takes over the detailed work that used to build experience. Demirchian noted that managers surveyed for BAFT’s Future Leaders paper ranked strategic thinking as their top hiring priority.

Trade-Based Money Laundering: Current Regulatory Expectations and the Next Generation of AI-Powered Detection

Speakers: Gerardo Gutierrez-Olvera, Executive Director, Head Trade Finance & International Business, Banorte; Mike Ionescu, Director, Guidehouse

Trade-based money laundering (TBML) is hard to catch because it hides inside legitimate trade, and the speakers noted that tariff circumvention and transshipment add a new layer of risk. Gutierrez-Olvera observed that many defenses were built for documentary trade, while much of today’s trade moves on open account. Ionescu, who has spent about 15 years implementing transaction monitoring systems, laid out a practical path for regional banks to apply AI without replacing systems that already work.

Key Takeaways

  • Look beyond the threshold: Ionescu explained that TBML money movements often look normal, and that red flags tend to show up in counterparties, relationships and history, where network analytics can help.
  • Layer AI on what already works: He suggested banks can add alert scoring, network analysis and AI-drafted case narratives on top of existing monitoring, testing them in parallel before relying on them.
  • Know the transaction and the trade: Both speakers encouraged banks to look past the customer to the underlying transaction and the movement of goods.

Agentic AI: Building Agentic Infrastructure & Financial Crimes Case Study

Speaker: David Dawson, VP, BSA/AML Officer, First National Bank of Omaha

David Dawson shared how First National Bank of Omaha (FNBO) has brought agentic AI into its BSA/AML program. Rather than starting from scratch, the bank built on its existing financial crimes platform and ran the new AI capabilities through its established AI, model risk and financial crimes governance before putting them to work alongside its investigators.

Key Takeaways

  • Governance first: Dawson described taking new AI tools through the bank’s existing governance committees, with demos, before anything went live.
  • Test side by side: Investigators and AI agents reviewed the same cases in parallel, which Dawson said helped build confidence in consistent, well-documented results.
  • Free people for higher-value work: He described using AI for high-volume, lower-risk tasks, such as due diligence pre-work and alert screening, so investigators can focus where judgment matters most.
  • Start with the problem, not the technology: Dawson’s advice was to ask what you are trying to solve, see what tools you already have, and test side by side.