Understanding Mid-Size Banks: A Comprehensive Analysis
Intro
In the intricate landscape of finance, mid-size banks hold a significant but often overlooked position. Unlike their larger counterparts, which dominate headlines and public perceptions, mid-size banks cater to a specific niche. They serve a vital role in local economies, yet their characteristics and challenges can be misunderstood by many. This article seeks to clarify the essence of mid-size banks by examining key concepts such as their regulatory environment, their unique services, and their impact on community development.
With the ongoing shifts in technology and consumer behavior, understanding mid-size banks becomes increasingly essential for both novice and experienced investors. This analysis will guide readers through fundamental definitions, comparisons of financial products offered by these banks, and insights into their future amid rising challenges in the financial sector.
Navigating this discussion requires a clear comprehension of pivotal terms and definitions, which we will outline in the subsequent section.
Prelude to Mid-Size Banks
The topic of mid-size banks holds significance in the context of the broader financial system. Mid-size banks fill a unique niche that bridges the gap between small community banks and larger, international financial institutions. These banks tend to offer personalized services while having the capabilities to provide a diverse range of financial products. Understanding mid-size banks is important for investors and finance enthusiasts because they influence local economies and play a crucial role in regional development.
Mid-size banks often prioritize customer relationships. They offer customers a level of service that is rare in larger banks. Such attention helps in fostering loyalty and promotes financial literacy among clients. Furthermore, their contribution to local economies cannot be understated. They support small businesses, which are essential for job creation and community stability. This relationship can contribute to local resilience against economic downturns.
The structure of mid-size banks also enables them to respond more effectively to economic changes compared to larger financial institutions. They can adapt quicker, offering competitive financial products while maintaining compliance with regulatory demands. Therefore, analyzing mid-size banks provides insight into various aspects of the financial ecosystem.
Defining Mid-Size Banks
Mid-size banks are generally characterized by their asset size. While definitions may vary, they typically have assets ranging from $1 billion to $10 billion. This size positions them uniquely in the financial sector, as they are larger than community banks but smaller than major commercial banks like JPMorgan Chase or Bank of America. In addition to asset size, mid-size banks often exhibit a strong local presence, servicing specific regions or communities. This allows them to cater to unique local needs.
Products offered by mid-size banks often include personal and business loans, checking and savings accounts, along with investment services. They may not always have as extensive a range of financial products as larger banks, but their offerings are designed to address the specific needs of their customer base. Understanding these defining characteristics highlights the vitally important role mid-size banks play in both the local and national economies.
Historical Context
The evolution of mid-size banks can be traced back to periods of significant regulatory changes and economic shifts. Historically, the banking landscape was dominated by numerous small banks that served local communities. However, the mid-20th century saw a wave of consolidations, leading to the emergence of larger banking institutions. Some small community banks began to grow, forming mid-size banks, especially during the late 1980s and early 1990s.
The financial crisis of 2008 served as a pivotal point for the banking industry, resulting in stricter regulations such as the Dodd-Frank Act. These regulations impacted banks of all sizes, but mid-size banks often found themselves in a complex position. They needed to comply with heightened regulatory standards while still competing effectively with their larger counterparts.
This historical perspective adds depth to the current understanding of mid-size banks. The challenges and opportunities they faced shape their operational strategies today, defining their place within the financial ecosystem and their interaction with customers.
"Mid-size banks play an essential role in the financial system, providing a balance of personalized service and competitive products."
In summary, the introduction to mid-size banks lays the groundwork for a comprehensive understanding of their multifaceted role within the financial sector. It indicates how crucial these institutions are for local economies and their capacity to adapt amidst evolving regulatory requirements.
Role in the Financial System
Mid-size banks play a crucial role in the overall functioning of the financial system. They serve as a bridge between large national institutions that often focus on global operations and smaller community banks that cater to local needs. The importance of mid-size banks lies in their ability to provide a diverse range of financial services while maintaining a balance between intimacy and scale.
Comparison with Large Banks
When comparing mid-size banks to large banks, several distinct characteristics emerge. Large banks, such as JPMorgan Chase and Bank of America, dominate the financial landscape with extensive resources and global reach. They often provide specialized services, enabling them to cater to high-net-worth individuals and large corporations.
However, mid-size banks can offer highly personalized services that often get lost in larger institutions. This personalization is possible due to their customer-focused approach. They can address the needs of businesses and individuals at a community level, which helps them to build trust and loyalty with their clients.
Mid-size banks tend to have more flexible lending criteria compared to their larger counterparts. For instance, a small business seeking a loan may find it easier to work with a mid-size bank. This is due to their willingness to consider local economic conditions and the specific financial history of clients.
Comparison with Community Banks
In contrast to community banks, mid-size banks offer a broader array of financial products while still maintaining local relevance. Community banks focus heavily on local customers and small businesses, often providing essential banking services. However, they may lack the resources to offer more complex financial products like investment and wealth management services.
Mid-size banks fill this gap by offering a wider selection of loans, investment options, and other financial products. Their operational size allows them to invest in advanced technology and innovations which aids in improving the customer experience.
Ultimately, the relationship between mid-size banks and community banks enhances the financial system's overall health. Both types of institutions contribute to local economies but in different ways. Mid-size banks can lend support to growing businesses while also providing essential services that fulfill community banks' obligations, making them indispensable to the financial ecosystem.
Advantages of Mid-Size Banks
The advantages of mid-size banks are critical when evaluating their overall value to both consumers and the wider financial ecosystem. This section highlights key benefits these institutions provide in areas like customer service, product offerings, and local economic contributions.
Personalized Customer Service
Mid-size banks often offer a distinct advantage in customer service. Unlike larger banks, which may prioritize efficiency over personal attention, mid-size banks have the capacity to build meaningful relationships with their clients. Customers frequently appreciate the familiarity and individual attention they receive, which can result in tailored financial advice.
"Mid-size banks can foster a community feeling and provide a personalized touch that large banks often lack."
Moreover, staff members at mid-size banks tend to have a deeper understanding of local markets and customer needs. Because they are less pressured than their larger counterparts, employees have more time to assist clients with unique financial situations. This can lead to quicker problem resolutions and increased customer satisfaction.
Competitive Financial Products
Another significant advantage of mid-size banks is their ability to offer competitive financial products. These institutions often provide a range of services that can rival those of larger banks while retaining flexibility in their offerings. Personal loans, mortgage options, and business accounts can be customized to meet specific client needs, making these banks an attractive option for both individual consumers and small businesses.
Mid-size banks are also acutely aware of the importance of keeping their fees and interest rates competitive. This awareness enables them to take calculated risks without jeopardizing their financial stability. As a result, clients can often find appealing deals, such as lower loan rates or fees, compared to larger institutions.
Local Economic Impact
The local economic impact of mid-size banks cannot be overstated. These institutions often prioritize lending to local businesses, recognizing that such efforts not only foster community growth but help build long-term client relationships. By providing financing to small and medium enterprises, mid-size banks play a crucial role in stimulating employment opportunities and supporting the economy.
Additionally, mid-size banks contribute to local initiatives and projects, enhancing their visibility and reputation within the community. This local focus creates a ripple effect—strengthening local economies and creating a loyal customer base that values community support.
In summary, the advantages of mid-size banks lie in their customer-focused approach, competitive financial products, and positive local impact. These elements work together to create a compelling case for choosing a mid-size bank, as evidenced by their growing popularity among consumers and businesses alike.
Disadvantages of Mid-Size Banks
Mid-size banks play a crucial role in the financial landscape, yet they also face distinct challenges that can affect their operations and competitiveness. Understanding these disadvantages is vital for investors and financial professionals who seek a comprehensive view of the banking sector. Issues like limited resources for expansion, perception of risk, and technological lag can shape the strategic decisions these institutions make. Recognizing these elements can help stakeholders evaluate the potential pitfalls when engaging with mid-size banks.
Limited Resources for Expansion
One significant disadvantage of mid-size banks is their limited resources for expansion. Unlike large banks with extensive capital reserves, mid-size institutions often operate within tighter financial constraints. This limitation can restrict their ability to open new branches, upgrade existing infrastructure, or invest in transformative business strategies.
Due to these constraints, mid-size banks might miss opportunities to capture market share in competitive regions or diversify their services to meet the evolving demands of customers. Moreover, they can struggle to provide competitive salaries and benefits that attract top-tier talent.
In many instances, this constrained growth can lead to a reduced footprint in the market. This challenges their ability to compete effectively against larger institutions, which can invest heavily in marketing and customer acquisition.
Perception of Risk
The perception of risk associated with mid-size banks complicates their market position. Investors and consumers often regard large banks as safer options due to their resources and stability. Conversely, mid-size banks can be viewed as less secure, particularly during economic downturns. This perception can lead potential customers to gravitate toward larger establishments that promise more robust safety nets.
Additionally, when individuals perceive mid-size banks as riskier, they may hesitate to deposit larger sums or opt for loans from these institutions. This hesitation can result in higher funding costs for mid-size banks, as they may need to offer more attractive rates to attract deposits.
It’s essential for mid-size banks to engage in effective communication strategies. Clearly conveying their financial health and stability can help mitigate this perception. Transparency in operations, community involvement, and a history of sound financial management can build trust with customers.
Technological Lag
Another significant challenge confronting mid-size banks is technological lag. While many customers expect advanced digital banking features such as mobile apps and online services, mid-size banks often find it challenging to keep pace with larger competitors that can invest heavily in technology.
The lack of cutting-edge technology can hinder customer satisfaction. If consumers face difficulties or limitations in using banking services online, they may switch to banks offering superior technological solutions. Additionally, technological gaps can impact the efficiency of operations, making processes slower and potentially less secure.
Regulatory Framework
Understanding the regulatory framework that surrounds mid-size banks is crucial in comprehending their operations and positioning within the financial landscape. This framework not only influences how these banks conduct their business but also shapes their relationship with consumers and regulators. A robust regulatory environment can enhance stability, promote competition, and protect consumers. For mid-size banks, this means they must navigate a complex array of laws and guidelines that govern their activities.
The importance of regulatory compliance cannot be understated. These regulations provide a safety net that helps ensure the soundness of financial institutions. They establish minimum capital requirements and risk management practices designed to safeguard both the banks and their customers. Moreover, understanding these regulatory aspects allows investors to gauge the stability and trustworthiness of mid-size banks as part of their investment considerations.
Dodd-Frank Act Implications
The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in 2010 in response to the financial crisis of 2008, significantly impacts mid-size banks. This act aimed to increase transparency and accountability in the financial system. While it primarily targets larger, systemically important institutions, its provisions affect mid-size banks as well. For instance, mid-size banks must comply with stricter capital requirements and greater scrutiny from regulators.
Additionally, the Dodd-Frank framework created the Volcker Rule, which restricts proprietary trading by banks. This means that mid-size banks have to be cautious about how they invest their capital. The aim of these restrictions is to promote stability in the financial system. Investors must be aware that these regulatory limitations might affect the growth strategies of mid-size banks, leading to a more conservative approach to their financial operations.
Consumer Financial Protection Bureau Oversight
The Consumer Financial Protection Bureau (CFPB) plays a critical role in monitoring and enforcing regulations within the banking sector, including mid-size banks. This body is responsible for ensuring that consumers are treated fairly and have access to clear information about financial products. The CFPB's oversight extends to various aspects such as loan practices, fee disclosures, and marketing strategies adopted by mid-size banks.
Compliance with CFPB regulations ensures that mid-size banks prioritize consumer interests. This oversight can result in increased trust and confidence from customers, which is vital for sustaining their business. However, it also imposes additional operational costs on the banks. These costs can arise from the need to adapt internal practices, train staff, and possibly face penalties for non-compliance. Mid-size banks must balance these regulatory requirements with the need to manage their resources efficiently.
In summary, the regulatory framework surrounding mid-size banks significantly influences their operations, growth strategies, and relationships with consumers. Both the Dodd-Frank Act and the oversight by the CFPB present benefits and challenges that these institutions must navigate carefully.
Financial Products Offered by Mid-Size Banks
The financial products offered by mid-size banks play a crucial role in their overall value proposition. These banks provide a unique mix of services that cater to both individual and business needs. Understanding these offerings is essential for investors and financial professionals who want to gauge the strengths of mid-size banks compared to their larger counterparts.
Loan Services
Mid-size banks excel in providing various loan services tailored to meet the needs of consumers and businesses alike. They offer personal loans, mortgages, auto loans, and business loans. The flexibility in loan terms is a distinguishing feature, allowing borrowers to choose options that best suit their financial situation. Additionally, mid-size banks often have less stringent credit requirements compared to larger banks, making financing more accessible for a broader range of clients.
The processing of loans is usually faster, which is a significant advantage for customers needing quick access to funds. However, borrowers should consider interest rates and conditions, as they can vary significantly across different banks.
Investment Services
Investment services provided by mid-size banks encompass a comprehensive range of options, including mutual funds, retirement accounts, and wealth management. Many mid-size banks have dedicated investment advisors who can offer personalized strategies based on client goals and risk tolerance. This personal touch is a key benefit when compared to larger institutions where clients may feel like just another number.
Furthermore, mid-size banks frequently engage in local investment initiatives and community projects. These investments not only offer potential returns for clients but also contribute to regional economic development. Clients seeking sustainable investment options may find these offerings particularly appealing.
Savings and Checking Accounts
Savings and checking accounts from mid-size banks are designed with a client-centric approach. Unlike larger banks that may impose high fees and minimum balance requirements, mid-size banks often provide accounts with lower fees and favorable interest rates.
Clients have various account options, including regular savings, high-yield savings, and specialized checking accounts tailored for specific needs such as student or senior accounts. This diversity ensures that customers can choose the account that best fits their financial situation.
Mid-size banks also embrace digital tools, enabling clients to manage their accounts efficiently through online banking platforms. This accessibility contributes to improved customer satisfaction and retention.
"Mid-size banks stand out by offering personalized services, which are often lacking in larger institutions."
In summary, the financial products offered by mid-size banks are integral to their operational success and appeal. Clients benefit from a mix of personalized services and comprehensive product offerings. This fosters loyalty and enhances the bank's reputation in the community.
Technological Advancements in Mid-Size Banks
Technological advancements are reshaping the landscape of mid-size banks. In a competitive market, technology becomes a crucial factor that lends these institutions the agility to adapt and meet consumer expectations. It offers tools to enhance efficiency, improve customer experiences, and streamline operations. Understanding these advancements is key for individual investors and financial enthusiasts aspiring to comprehend the future potential of mid-size banks.
Adoption of Digital Banking Solutions
Mid-size banks face pressure to adopt digital banking solutions. More consumers prefer online banking due to convenience. Thus, mid-size institutions invest in platforms that facilitate transactions, account management, and customer inquiries via mobile or web applications. Enhanced accessibility has resulted in a broader customer base, reaching those who may not visit a branch.
Some benefits of digital banking include:
- 24/7 access: Customers can manage accounts anytime.
- Cost-effectiveness: Reduces operational costs associated with physical branches.
- Increased efficiency: Streamlined processes lead to quicker service.
Despite these benefits, mid-size banks must consider challenges related to implementation. They must ensure adequate training for staff and provide customer support for users unfamiliar with technology. It is crucial as part of this transition, keeping in mind the diversity of their customer base.
Cybersecurity Measures
With the rise of digital banking comes the heightened risk of cyber threats. Mid-size banks must prioritize cybersecurity to protect sensitive customer data. Failures in this regard can have severe implications, such as financial loss or reputational damage.
Essential cybersecurity measures mid-size banks should implement include:
- Multi-factor authentication: Adds another layer of security.
- Regular software updates: Protects systems from vulnerabilities.
- Employee training: Ensures staff are aware of security threats.
Investing in cybersecurity not only safeguards the institution but also strengthens customer trust. A strong reputation for security can attract more clients, impacting the bank's market share positively.
Data Analytics for Customer Insights
Leveraging data analytics provides mid-size banks with valuable customer insights. Analyzing customer behavior patterns enables banks to tailor products and services uniquely suited to individual needs. This capability makes them more competitive against larger institutions.
Some applications of data analytics in mid-size banks include:
- Personalized marketing strategies: Targeted campaigns based on customer preferences.
- Risk assessment: Informed decision-making regarding loan approvals.
- Customer segmentation: Understanding different customer demographics for better service delivery.
However, the use of data analytics does require compliance with regulations regarding data protection. Ensuring that customer information is handled ethically and legally strengthens the bank's reputation while providing insights to drive business success.
"Technological advancements serve not only to enhance efficiency but also to build customer trust and loyalty among mid-size banks."
Case Studies of Successful Mid-Size Banks
The examination of successful mid-size banks provides valuable insights into the operations within this financial segment. By dissecting the strategies and practices that contribute to their success, the nuances and complexities of mid-size banks can be better understood. These case studies serve not only as exemplars of effective management but also as inspiration for other institutions looking to navigate challenges in a competitive landscape.
Importance of Case Studies
Case studies highlight specific elements such as innovation in banking practices, community involvement, and strategic decision-making. They bring to light the adaptiveness these banks have shown in response to market needs and regulatory shifts. Moreover, such analyses shed light on how mid-size banks can maintain their relevance amidst growing competition from larger entities and fintech companies.
Innovative Practices
Successful mid-size banks often implement innovative practices that set them apart. These might include the introduction of new technologies or unique product offerings designed to cater to specific customer segments. For instance, some banks have focused on enhancing their online services, enabling seamless customer interactions while ensuring secure transactions. Others have developed tailored financial products that address the distinct needs of small businesses or local communities.
Some examples of innovative practices include:
- Personalized Financial Solutions: Many mid-size banks provide customized advice and services based on customer profiles, allowing for greater customer satisfaction and loyalty.
- Integration of New Technologies: Utilizing advanced data analytics helps these banks understand consumer behavior, which in turn drives product development.
- Sustainable Banking Initiatives: Some institutions are also moving towards sustainable banking practices, reflecting growing consumer awareness and demand for environmentally responsible services.
Community Engagement
Community engagement stands out as a core tenet for many mid-size banks. By fostering strong ties with their local communities, these banks not only enhance their brand image but also create a loyal customer base. The commitment to community involvement often translates into various initiatives.
Effective community engagement strategies may include:
- Local Sponsorships and Events: Supporting local events enhances community ties and showcases the bank’s commitment to its customers.
- Financial Education Programs: Offering workshops and resources to educate community members about financial literacy bolsters trust and empowers customers.
- Partnerships with Local Businesses: Collaborating with local enterprises fosters mutual growth and strengthens the local economy, which in turn benefits the bank.
"Understanding successful case studies of mid-size banks reveals how adaptability and community focus can be powerful growth tools in the competitive banking landscape."
In summary, case studies of successful mid-size banks provide critical insights into effective strategies that can be replicated across the sector. Through innovative practices and community engagement, these institutions illustrate how mid-size banks can thrive while fulfilling their commitments to customers and communities alike.
Challenges Facing Mid-Size Banks
Mid-size banks operate in a complex environment that presents various challenges. Understanding these challenges is essential for evaluating their position in the financial landscape. Key issues include market competition, regulatory compliance costs, and sustaining profitability. These factors significantly impact their strategies and future viability.
Market Competition
Mid-size banks often find themselves squeezed between larger national banks and smaller community banks. This competition affects their ability to attract and retain customers. Larger banks usually offer aggressive pricing and a broader range of services. On the other hand, smaller banks tend to focus on hyper-local customer relationships.
To thrive, mid-size banks must carve out a niche. They may specialize in certain services or target specific demographics. Differentiation can come from personalized customer service or tailored financial products. However, the challenge remains; competing with the branding and resources of larger banks is no simple task. Mid-size banks need to continually evaluate their market positioning to respond effectively to these pressures.
Regulatory Compliance Costs
Compliance with regulations is another significant challenge. Mid-size banks face an expensive and complex regulatory framework. The Dodd-Frank Act and the oversight of the Consumer Financial Protection Bureau impose various requirements. To comply, mid-size banks must invest in legal resources, audit functions, and technology. This investment can strain their financial resources, particularly when compared to the resources larger banks can allocate.
Ongoing compliance can also reduce the agility of mid-size banks. As they focus on meeting regulatory demands, they may have less flexibility to innovate or adapt to customer needs. Consequently, effective compliance strategies must be developed not just to meet regulations but to maintain competitiveness and operational efficiency.
"For mid-size banks, balancing compliance with operational efficiency is crucial for sustainable growth."
Sustaining Profitability
Profitability remains a persistent challenge. While mid-size banks may have a loyal customer base, maintaining profitability in an era of low-interest rates is difficult. Increasing operational costs and stagnant revenues can lead to narrowing margins. This situation requires banks to rigorously manage expenses while seeking new revenue streams.
Investment in technology can offer solutions. For instance, adopting digital banking tools can enhance efficiency and cut costs. However, the upfront costs can be daunting for mid-size banks. An effective strategy needs to consider both short-term investments and long-term returns.
In summary, the challenges facing mid-size banks are multifaceted. Addressing these issues involves a careful balance of competition, compliance, and profitability. Mid-size banks must navigate this landscape strategically to ensure their future growth and relevance in an ever-evolving financial ecosystem.
Future Trends for Mid-Size Banks
The future of mid-size banks stands at a critical intersection of evolving technologies and shifting consumer expectations. In an increasingly competitive financial landscape, these institutions are tasked to adapt quickly. This section explores how mid-size banks are positioning themselves to remain relevant and competitive by embracing innovations and understanding customer behaviors.
Integration of Fintech Solutions
The role of financial technology, or fintech, cannot be overstated. Many mid-size banks are seeking to integrate fintech solutions to enhance their service offerings. They aim to improve operational efficiency, streamline processes, and enable a superior customer experience.
Fintech solutions can facilitate:
- Automated Processes: Many tasks can be digitized, reducing the need for manual interventions and minimizing errors.
- Better Customer Insights: Data analytics tools help banks understand customer behavior, enabling personalized services and products.
- Lower Costs: By automating services, banks can operate at a lower cost, which also can be reflected in better interest rates for customers.
For instance, banks like Ally and Discover are examples of how integrating effective technology can attract more customers and retain existing ones.
Evolving Customer Preferences
Customer preferences are changing rapidly. The preferences of customers today are not limited to traditional banking services. They demand more flexibility, convenience, and quick access to banking products. Mid-size banks must recognize this shift to retain and grow their customer base.
Key aspects of evolving preferences include:
- Digital Experience Expectations: Customers today often prioritize a seamless digital experience. Companies that provide easy-to-use apps or websites tend to score higher in customer satisfaction.
- Desire for Personalized Services: Customers are looking for tailored solutions that meet their specific financial needs. Banks that leverage data to provide personalized offers can distinguish themselves.
- Sustainability Concerns: Many customers now consider the environmental and social impact of their banking choices. Mid-size banks that adopt and promote sustainable practices may appeal more to socially conscious consumers.
As the financial landscape evolves, adapting to customer preferences is not just an option for mid-size banks; it is a necessity.
To conclude, the integration of fintech and understanding evolving customer preferences will be fundamental in shaping the future of mid-size banks. These elements will not only enhance their competitive edge but will also enable them to resonate with their customer base in a meaningful way.
Ending
The conclusion serves as a pivotal element in any analytical piece. In this context, it encapsulates the insights gained throughout the exploration of mid-size banks. A well-structured conclusion helps in reiterating the significance of mid-size banks in the financial landscape. While large banks dominate the market, mid-size banks maintain a distinct position, offering personalized services and contributing to local economies in unique ways.
The Future of Mid-Size Banks
As we look ahead, mid-size banks are poised to face numerous challenges and opportunities. One of the key factors influencing their future is the integration of Fintech solutions. The burgeoning technology sector offers innovative tools that can help these banks enhance their services and operational efficiency. Customers increasingly demand seamless digital experiences, pushing mid-size banks to adapt quickly. Moreover, evolving customer preferences also shape the future landscape. A younger demographic with specific needs for investment options and financial education will require these banks to rethink their offerings.
Additionally, collaboration with tech companies could be a strategic move for mid-size banks. By doing so, they can leverage advanced data analytics and customer insights, gaining a competitive edge. This may help to alleviate some concerns about technological lag, allowing mid-size banks to remain relevant in a rapidly changing market.
Final Thoughts on Investment Opportunities
Investing in mid-size banks presents a unique chance to tap into an often-overlooked segment of the financial industry. These institutions typically exhibit steady performance and resilience. Investors may find opportunities in their growth potential, especially given their ability to cater to specific local markets. As they adopt new technologies and navigate regulatory changes, mid-size banks could improve their operational frameworks. This foots the idea that informed investors can find value in mid-size banks, distinguishing them from larger competitors. Furthermore, community engagement initiatives often translate into loyal customer bases, presenting additional investment considerations.
Ultimately, the conclusion of this analysis emphasizes the need for a careful evaluation of mid-size banks. They offer unique advantages and face challenges that warrant thorough examination. Investors and financial enthusiasts should keep an eye on this segment as it evolves.
