If you want a more innovative bank, it starts, and largely stops, with what your approval process looks like for new technology. Take a human and force them to grow up in New York City. Around age 20, you force them to go to conferences on living in the outdoors, hunting, fishing, and survival. You also hire consultants to come in and teach outdoor skills. Take your well-outdoor trained city dweller and then put them into the middle of the Colorado Rockies, chances are they become bear-food in a week. That is basically how banks are handling innovation.
Tag: Bank Technology
Last week, Finovate Spring 2019 took place in San Francisco in which over 270 banks watched more than 60 companies each have seven minutes to impress you with a demo of their technology. This is speed dating for financial technology, and it is a fantastic way not only to look for new partners but to help your bank hone what is important to its vision. In this article, we recap the trends and highlight some companies that should be worth consideration by all banks.
Since we deal with the majority of banks in our industry, one trend that we noticed is the number of banks that are using email authentication in 2017. Only a handful of banks had email authentication back in 2016, and now it seems that about one-in-twenty community banks do from our data.
Since 1816, with the opening of the Second Bank of the United States, bankers have struggled with compensation plans. The new Wells Fargo structure, rolled out this month, is somewhere in the middle of two wildly successful plans. The question is, what can community bankers learn from these plans and how can they put them into action? Our last series on compensation (HERE), gave bankers ideas on how best to compensate lenders.
What is the very top strategic threat to community banks today? A number of threats have been discussed by industry pundits and bankers at length and include the following: competition from larger banks, increased regulation, dearth of qualified loans, non-traditional competitors and the next recession. While these may all be threats, we do not believe that any of these are the top strategic threat to community banking. We have listened to hundreds of bankers at conferences, interviews and in private meetings sh
Bank of America just released their second annual “Bank of America Trends in Consumer Mobility Report” and it shows consumer’s growing reliance on smartphones. The report finds that 38% of respondents are never away from their phones and only 7% entirely shut down on vacation. In addition, 36% of smartphone users check their phone constantly while 89% of adults check their smartphones at least several times per day. If that is not a connection enough, 71% sleep with their smartphones and 35% say they check it first thing in the morning.
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.
Community banks need to make a plan to upgrade their current core system to one that handles real-time processing in order to stay competitive. It is crazy the amount of cost and energy our bank (like almost all banks) spends on mimicking a real-time environment, the risk associated with such and how much of an operational hindrance a batch environment is. Consider that in the next three to five years banking will be a 24/7 activity and community banks will not be ready.
Yesterday’s big Apple reveal had bankers and pundits talking across the country. Most analysts got it wrong about “revolutionizing payments” and got it further wrong regarding what it means to banks. The iPhone6 (and iPhone6 Plus lumped together for the sake of this article) and the Apple Watch are truly evolutionary products.
After meeting and demo-ing some 70+ companies at Finovate (including non-presenters), there is more of a gap that we alluded to yesterday. Yes, the technology presented was interesting and the show format perfectly efficient, but there are a couple more glaring holes outside of the lack of discourse around profitability and risk management plus the lack of innovation around handling the small to mid-sized commercial customer that we highlighted yesterday.