This week, Simple, a division of BBVA Compass, launched a non-spouse account and many banks across the industry wondered why they don’t have a similar offering. The answer to why more banks don’t have a non-spouse account is because of tradition. Bankers for decades either never paid attention to demand or never stop to question the current state of affairs of account opening and structuring.
We are not sure if fintech companies are from Venus or Mars and where banks fit into the universe, but there are differences in how these groups think. Pricewaterhouse Coopers just did a study on the cultural and understanding issues that frustrate banks in dealing with fintech firms and fintech firms dealing with banks. By the graphs below you can see the points of frustration for each party.
To be clear, earlier this week, we already had people in our bushes hunting around for small fictional characters, so the idea of being proactive and actually purchasing the "Lures" wasn’t that much of a stretch. The real hilarity ensues when you find yourself explaining why your avatar needs to go to the “Pokémon Gym” because there is an important battle with Charizard on the horizon instead of talking about BSA regulatory issues - but, this is the new world we find ourselves in.
We attended a full day session at the OCC in Washington D.C. last week about responsible innovation. It was essentially a 300+ person discussion around the March white paper the OCC produced (HERE). We give the OCC props for organizing this first class workshop that brought lawyers, fintech, banks, community activists, consultants and regulators together to exchange ideas.
Growth doesn’t happen by accident. You have to put energy into it. If you don’t, the laws of business entropy take over and your customers go elsewhere, move, pass away or just plain forget about you. Most all banks understand this and try hard to gather new customers and retain the ones they already love. However, bank growth is more than a two-dimensional puzzle – it is multifaceted. More importantly, energy must be invested not only at the customer and product level but at the strategic level as well.
Readers of this column know that we are big experimenters with artificial intelligence. We use it to set strategy (trying to figure out what really drives bank performance), use it in our loan pricing model (to offer suggestions of improvement) and to assist in credit analysis. We have also experimented with “smart systems” in a number of areas including compliance, HR, credit analysis, writing Suspicious Activity Reports and even writing this column (and you never even knew). Some of these applications are amazingly ready for prime time while others have a ways to go.
At a recent banking conference, we conducted a poll that asked how many banks want to be more innovative. About 85% of the hands shot up. We then asked, “How many bankers have the culture to experiment, an initiative to innovate, time to innovate and a budget?” Almost every hand dropped. And, there it is – The reason why banks don’t innovate isn’t because they don’t want to, but because it has not risen to a level of importance to warrant a formal initiative. This is the “Innovation Dilemma” in banking – Bankers want to innovate, but are not sure how.
We just finished up the Western Independent Bankers (WIB) Conference on the Big Island in Hawaii for their annual conference and one of the most interesting lessons came in the most unlikely of places – dolphin training. While dolphin training was fascinating, the real lesson came when you watch a group of novice trainers learn how to work with dolphins. The speed of training is not the same for everyone and those that had a “learning mindset” excelled while those that failed to take training, and more importantly, learning, seriously were outdistanced.
Virtual reality is all the rage this week. Facebook released their Oculus Rift headset and it was announced that the NCAA Final Four basketball games will be live-streamed in virtual reality. This all has the “Wow” factor but the reality of virtual reality is that it leaves much to be desired. It is no surprise that, in our opinion, the technology is over-hyped and out over its skis. We demoed the headset and got nauseated.
In 1987 Robert Plath, a Northwest Airlines pilot, introduced the world to rolling luggage.
Since the transition from the steamer trunk to the suitcase around 1907, travelers and their porters had manhandled their belongings on trips much the same way. While some travelers started to use portable luggage carts in the 1970s, and a gentleman by the name of Bernard Sadow invented wheeled luggage, neither caught on for mass travel.