KeyBank’s Growth Strategy: How the Mid-Size Bank Wins by Picking Its Battles

By Justin Estes, Contributor at The Financial Brand

Published on July 8th, 2025 in Banking Trends

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Executive Summary

In a recent episode of Banking Transformed podcast with Jim Marous recorded live at The Financial Brand Forum 2025, Victor Alexander, head of consumer banking at KeyBank, explains how the bank is navigating intense competition by focusing on specific client segments and prioritizing strategic growth over scale.
The Cleveland-based, $185 billion institution has embraced fintech partnerships to accelerate innovation, improve customer experience and expand capabilities efficiently.
With a balanced approach to digital and physical banking, KeyBank is proving that mid-sized institutions can compete — and win — against industry giants and disruptors.

Strategic Focus in a Competitive Market

Q: How does a mid-size bank like KeyBank compete against both large national banks and fintech disruptors?
Victor Alexander: Some of it goes back to picking your spots. And back to this notion of focus propels growth. Where are we trying to win? With whom are we trying to win? What’s our opportunity? We can discuss client segmentation in a bit.

However, back to the notion of fintechs, they’ve, by and large, been beneficial to the industry and certainly to Key, as they’ve made all of us better. In some ways, they’ve removed friction and highlighted longstanding pain points. They’ve effectively raised the bar for everyone from a client service perspective in terms of what’s possible. And that’s good and healthy.

They’ve also been accelerators to our business strategy. There are a number of them that, in certain of our businesses, we’ve taken a solution — something that they do better than we do —that we could build. But it would be one of a hundred things that we do and it’s their core mission in life and they can probably, by that, do it better and faster. And it’s easier for us to plug in, leverage it across our few million clients and move on.

Q: What does “focus propels growth” mean in practice for your consumer banking strategy?
Alexander: One of our mantras as a bank is that focus propels growth, directly from our CEO. And so, this notion of not trying to be all things to all people, picking your spots and doing fewer things better has really helped us execute today.

We’re a large enough bank, with assets of $185 billion, so we can invest in anything we want. There isn’t a client segment we couldn’t say, “Hey, you know what, if that’s our best idea, we could run hard at that and we could do an excellent job.” But our challenge is that we can’t aim at everything. We get to pick our spots. And that means we have to say no to some good ideas as well.

The Evolution of Fintech Partnerships

Q: How has KeyBank’s approach to fintech relationships evolved from viewing them as competitors to partners?
Alexander: All of the above. They’re competitors, frenemies, partners and collaborators. And there are still some competitors in that dynamic. Then and now.

We can pick our spots and focus on areas where we see the best growth opportunities and where we think owning this part of the client experience is really important to us. We can then partner in an area where that makes more sense. Fintechs have enabled us to do that and I think we’ll continue to do so going forward.

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Q: Can you share examples of successful fintech investments and acquisitions that have enhanced your capabilities and business performance?
Alexander: Our first foray into fintech was largely driven by our commercial payments franchise. We had some opportunities to see capabilities that would initially improve our clients’ performance. This firm is addressing a need that we could also fulfill. It would require time, money, effort and distract us from something else. And these guys are already way ahead of us. They have a really good capability. We could scale it across our client base.

So, you start with that and the conversation just evolves, “Hey, do you want to partner?” Sometimes there are opportunities to, yeah, no, let’s — they were looking for an investment partner. Let’s invest. It’s a way to increase our exposure, essentially and enhance our connectivity to the business. In some cases, we secured a formal board seat or board observer position. So, it’s a nice way for us to help that business grow and also for us to observe how they conduct their business.

Specialized Market Strategies

Q: How did KeyBank develop its focus on the healthcare sector and what role does Laurel Road play in this focus?
Alexander: We bought a business called Laurel Road in 2019. At the time, it was essentially a student loan refinance platform for doctors and dentists. It was mostly a physician-focused student lending business. Again, that was five or six years ago.

Over time, we’ve invested in that business to broaden its product set, where it’s today — a national digital bank, with a significant focus on healthcare and student loan refinance remains an important product.
Still, it offers a full suite of deposit and savings products that can help anyone, as the government has created forgiveness programs over the last few years. We can also help advise individuals with student debt in those circumstances.

Dig deeper:

Q: What drove the decision to create a dedicated mass affluent banking offering?
Alexander: One example that we’ve invested in recently and again, it’s a compliment to the healthcare strategies we’ve invested in the mass affluent business. I ran the mortgage business in 2019. I knew we had a lot of clients who had a need for a jumbo mortgage. And by mass affluent, we define that as a family with investible assets typically ranging from $ 250,000 to $2 million.

As I mentioned, we’ve been around for about 200 years. We’ve had mass affluent clients in and out of every one of those 950 branches for much of that timeframe. However, we never really had anything special for them in either our retail franchise or our wealth franchise.

They had just done the stock offering and we said, “Hey, I think there’s an opportunity to be better.” And so, with great partnership from our wealth and retail businesses, we built something new, branded it and introduced a new banking suite and wealth management offering. This really streamlined many of the capabilities of our scaled private banking business.

We launched it roughly two years ago. And it’s been a nice growth opportunity for us. So, continuing to add a thousand or more clients a month signing up for this program. And what’s even better is that they’re not just signing up for it, but they’re increasing their relationship with Key by reasonably significant amounts in either an expanded depositary relationship or an expanded investment relationship.

AI and the Future of Banking

Q: How is KeyBank currently implementing AI and where do you see the most significant opportunities?
Alexander: The potential of AI and I’ve had the privilege of hearing from people who are far smarter than I am in technology. And what struck me was that one of the most striking things to me was a gentleman who is very credible in the tech space. And he said, the thing about AI is that, however good it’s today, it’s 10,000 times better than it was a year or two ago and it’s going to be 10,000 times better than that in a year or two.

What we’ve initially tried to do with our surface use cases is to use it to make our folks better off. In the contact center, whether internal or external, how can I obtain the necessary information more quickly so that I can respond to clients more efficiently? We’ve a chatbot in our mobile app that we’ve engaged and enabled and clients are increasingly using it instead of calling the contact center directly.

Q: How do you balance AI’s potential for efficiency gains versus growth opportunities?
Alexander: AI hasn’t been a significant driver of cost reduction. We’ve implemented several measures to manage costs in the business. I’m not sure if that’s been AI-driven yet. When I think about AI, I imagine it 10,000 times better, or 10,000 times 10,000 times better and not that far off.

As a result, I’m more interested in its potential as a growth driver than as a cost reduction driver. And so, I’m more interested in the offensive potential and the potential to take it to make our clients’ lives better and easier.

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Building Culture and Leadership

Q: How do you foster innovation and idea-sharing across a 950-branch network?
Alexander: What I try to do is I try and it gets back to this notion of big enough to be interesting and have a lot of scale and a lot of opportunities, but small enough to get around the table and share good ideas as we just try to foster a culture of like, “Hey, if you have a good idea, if you have an idea to make our business better, escalate that.” Let’s bring it up and talk about it.

I’m on the road a third of the time, probably spending time in branches, talking to our branch managers. I meet with every branch manager once a year, in some formal setting, informal setting, whatever. And if people have an idea to make the business better, we want to hear about it. We share that success and recognize it.

Q: What role does KeyBank’s Cleveland roots play in shaping the organization’s culture and approach?
Alexander: I think it does. There’s something about cold winters and bad football that focuses you on the game at hand, the business at hand. And it fosters a ‘can-do’ spirit and a culture of teamwork, camaraderie and collaboration, truly motivating everyone to do the right thing.

We genuinely want to do the right thing – to do the right thing for our clients and to do the right thing for our community. We do believe in that. We strive to take the best care of our clients and each other as much as possible.