Most community banks believe that they can differentiate themselves from competitors by offering better service. However, the empirical data shows that the majority of banks fall into the trap of competing on price and credit structure, and neither of these competitive attributes is aligned with long-term bank success. Why is there such a disconnect between many bankers stated objective of competing on service and the reality of competing on price or credit structure? One reason is that while management and employees would like to offer a better level of service to their customers, few b
Tag: Bank Competition
Two non-banks released offerings last week that bankers should know about as both are poised to take market share from community banks. Venmo and Acorn both released debit cards with cutting-edge features that will now have banks scrambling to keep up. Both of these Fintech firms have partnered with community banks and applied both creative marketing and product creation to allow digital customers nationwide to leap from the digital world to physical stores. In this article, we explore the ins and outs of the products in hopes of helping banks better compete.
Last week we saw the release of the details of the Basel Committee on Banking Supervision (BCBS) rule on Fundamental Review of the Trading Book (FRTB). Started in 2012, put forth in concept in 2014 and now proposed in detail last week, the rule, should it stand, makes it largely uneconomical to securitize all sorts of lending assets. As such, should this rule stand as written, it would most likely go into effect in January of 2019 and make it onerous for large banks to securitize a variety of transactions.
Last Friday, JP Morgan Chase (Chase) released the details of their 2014 financial performance and like an E.L. James novel; it made us a little uncomfortable. While Chase does have its weaknesses, it is dominant in several key areas that will end up threatening the core business model of community banking. Today, we present seven areas that gaining a deeper understanding of Chase will help your bank better set strategy, gain inspiration and/or better compete with JP Morgan Chase.