2016 National State of Financial & Economic Education

April 26, 2016

Every two years, the Council for Economic Education (CEE) comprehensively reviews the state of K-12 economic and financial education in the United States, collecting data from all 50 states and the District of Columbia.

FI Highlight: Rivermark Community Credit Union

/   Spotlight

We recently spoke to Rob Mills, Vice President of Technology at Rivermark Community Credit Union to discuss the credit union’s new digital banking experience, how they “fail faster,” and how they continue to evolve...

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the Banking.com team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Technology M&As: The Beats Go On

May 29, 2014
/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below. Virtual Banking Worlds Provide Tangible Lessons American...

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

Every day fintech entrants are bringing noticeable competition to the financial industry’s traditional banking and credit union organizations. What differentiates them from traditional banks and CUs is their agility in addressing specific pain points such as payments, loans, mortgages, personal finance and remittance at speeds and pricing that is difficult for traditional organizations to match.

The most savvy traditional banks and credit unions see opportunities resulting from these new market entrants and are already embracing the trend with in-house start-ups or mobile-first banking apps. However, most are hesitating—or having difficulty—crossing the new technology adoption chasm.

One major reason traditional banks and CUs are challenged by fintech is due to their large, departmentalized organization structure, which inhibits a quick response to customers and market changes. For example, a mortgage application may take several weeks to be processed by all the relevant stakeholders in a traditional banking organization, including the mortgage, legal, risk and compliance departments. In contrast, start-ups like Rocket Mortgage allow customers to move from application to approval in minutes.

The other major hurdle has to do with technology. Traditional banks and CUs have a large number of legacy systems in place and busy IT teams. IT spends a lot of time on maintenance of business critical systems that are using technologies that are no longer supported.

There are four things banks and CUs can do to overcome these hurdles and fight the fintech battle. Let’s take a look at each of them.

  1. Leverage historical strengths to manage the customer’s moments of truth.

Traditional banks and CUs have a long history with customers and despite the financial crisis, they remain the primary institution managing savings. Customers may like online access for convenience, but approximately 80 percent still prefer to engage with a “flesh and bones” bank representative at the moment of truth for an important purchase decision. Providing best in class customer experience at these moments of truth can be a huge differentiator.

  1. Create small, dedicated and “self-contained” teams charged with digital transformation.

Traditional banks and CUs, with the organizational and technological barriers they face, cannot hope to move as a whole company with the speed and agility of fintech. However, large banking organizations can drive successful digital transformation projects with small teams shielded from the rest of the organization and charged with the sole objective of making change happen.

  1. Let mobile lead the way.

According to a 2015 Bank of America Trends in Consumer Mobility Report, 51 percent of respondents said they use mobile or online as their primary method of banking and 57 percent have tried mobile banking apps.

Banks and CUs need to think about what kind of mobile solutions they want to use depending on their goals. While native mobile applications are very effective for maintaining strong lines of communication with existing customers, responsive web applications are a better choice for prospects. There are fewer barriers for adoption when browsing mobile websites as prospects consume content in an instant with no download or registration.

  1. Adopt cloud solutions for agility.

Cloud solutions are growing fast in a financial industry that has long resisted change. Often driven by the lines of business or marketing departments, forward thinking financial institutions understand the advantages cloud-based approaches can bring. They see cloud-based solutions as a way to:

  • benefit from business capabilities in an instant, not months
  • scale business operations at a moment’s notice
  • relieve their IT team from maintaining yet another system
  • benefit from other solutions available in the same ecosystem

Resistance from compliance, legal and risk departments around data ownership is a big topic. Nonetheless, there is a growing trend in the willingness of banks and credit unions to adopt hybrid cloud-based solutions to design customer interfaces, business rules or documents while keeping sensitive customer data on their own servers.

Leadership from the top is essential for success.

Successful banks and credit unions have board members setting a clear vision, transparently explaining the reasons for their choices and motivations. They can make the case for how their enterprise should respond to the fintech market evolution. They must leverage strengths and manage their risks while embracing a whole new technological revolution about to hit the banking industry harder than any before.

 

Antoine Hemon-Laurens is Banking Customer Communications Management Expert at GMC Software Technology. His focus is on helping banks better engage with their customers through mobile solutions, customer engagement and digital signatures. Contact him at  a.laurens@gmc.net or on Twitter @anthemlau.

(487)

Insights

Banking.com’s perspective on industry news and trends

(312)

Spotlight

Must-read news and insights from financial industry leaders

(175)

Voices

Compelling voices and contributed content from around the web

James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Brad Strothkamp

http://www.forrester.com/rb/analyst/brad_strothkamp

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.