With strategic planning season upon us, many banks will be conducting brainstorming sessions to come up with ideas on cyber-risk mitigation, fee income, loan/deposit generation, new product ideas, M&A options and a host of other topics. As we often say, the keys to success are in the process. Get the process right and success will follow. When it comes to group brainstorming, we have tried all sorts of techniques and apps and have found the old Post-It note method works best.
Tag: Bank Innovation
Since at least the early 1500’s, bank branches have been the central interaction point between a bank and its customers. Next to a bank’s staff, branches are one of the largest contributors to a bank’s overall brand and thus, rank highly on important items for customer satisfaction.
It is hard for a bank to be more innovative when senior management has little experience with person-to-person payments, the Uber experience, the Dark Web or Snapchat. Without the experience, it is easy to dismiss new technology as a “fad.” This occurred with social media as many bankers grumbled “why do I care what so and so had for dinner” until they realized the level of success that other banks were having through the channel, that many of their profitable customers were using social media and the vast potential for micro-targeted marketing.
It is a cliché in Silicon Valley that every start-up seems to call itself the next Uber of something. If not, Uber, then it is “AirBnB, but for __________ “. However, a Philippine startup Coins.ph might be on to something that is a combination of both of those disrupters. “Teller,” Coin.ph ‘s new smartphone app allows users to get cash from other users in a secure and convenient manner. Now we are not sure it will catch on, but the concept of a distributed banking experience is intriguing.
When Goldman Sachs reports that 33% of Millennials think they won't need a bank in five years, know that they could be right. Below is a graphic from CB Insights that shows how there is a startup fintech company that almost covers Wells Fargo's entire business model. Look closely as they take Well's website and map back to each startup. This is a great graphic to display at your next strategic planning session (that is hopefully a quarterly meeting) as it generates a conversation about what areas your bank is going to defend and what it might cede to a startup.
If your bank is looking for a road map to the future, follow Capital One. Like BBVA, TD Bank and a number of others, banks should be thinking about a technology acquisition before their next bank acquisition. At a minimum, bank boards should weigh other investment alternatives to whole bank purchases and see which investment alternative can provide the highest risk-adjusted return. Oftentimes, acquiring equity in a technology company where a product can be immediately leveraged can often result in a faster and more fulfilling accretion to earnings.
One thing that did not make it into our 2014 Banker Gift Guide that we feel a public service need to tell you about is the limited availability of Spotted Dick (Amazon $19.95). In case you are unfamiliar with the item, Spotted Dick is a traditional, British pudding made with golden syrup and raisins to be served with custard, love and a dose of humor. If you normally don’t associate culinary delights from England, a can or anything called Spotted Dick, we understand, but part of the beauty of this blog is that it expands your horizons.