David Kerstein, president of Peak Performance Consulting Group, was interviewed by S&P Global (formerly SNL Financial) about FinTech and the whether they are competitors or partners. He said that digital disruption isn’t new, citing past developments like automated teller machines and automated call centers. The difference, he said, is that today’s developments are much more rapid.
Nonbank competition can be a sore subject among community bankers as the banking landscape — along with customer expectations — is continually changing. “If you think about it, banking and technology have been tied together for all of our lives,” Kerstein said. “These were developed not by the core banking providers, but by what we would now call fintech firms.”
Today, wealth management is one area where small banks and fintech companies are teaming up. He said he sees ample opportunities for robo-advisory companies to team up with community banks to simplify and standardize wealth management platforms, citing SigFig Wealth Management LLC’s partnership with Cambridge Savings Bank.
Fintech companies such as PayPal Inc. and LendingTree Inc. have put pressure on banks to up their digital game, and teaming up with fintech companies rather than competing with them is a sensible solution, Kerstein said.
“There’s a huge number of fintech initiatives that are really building their business propositions around providing services to financial institutions to make quicker loan decisions or provide more efficient investment advice,” he added. “Small-business processing has been complex for financial institutions. It’s been difficult to maintain the skill sets, just given the amount of training that it takes and the skills of loan officers.”
For more, see the full article.
So begins a new year, a new administration and new possibilities in the ways banks will approach business and operations
This article was originally published in BAI Banking Strategies .
It’s that time of year again—time to put away the ball in Times Square and polish up our crystal ball for 2017. What do we think will be the key trends for the industry? Here we present our picks for distribution, innovation, technology, and compliance.
In a recent Banking Exchange article, David Kerstein, president of Peak Performance Consulting Group, observed that there is no need for banks, especially community banks, to sit on the digital sidelines.
“Partnership is a no-brainer,” Kerstein said. “Fintechs are happy to work with small banks.”
Kerstein observed that traditional companies that partner with fintechs quickly realize that they can apply agile—or lean—processes to other products, as well. They also begin to look for “friction” in various products and processes.
Mark Hendrix, a 30-year banking industry veteran who currently acts as an advisor for Peak Performance Consulting Group, was quoted in Advertising Age on the changes in Bank of America’s brand strategy leadership and the potential implications for bank brand strategy.
Like many traditional banking competitors, Bank of America is dealing with an increasing number of digital rivals as it tries to improve its customer-centric approach. Hendrix noted “There is an awful lot of disruptive change that is occurring in the marketplace and there is a change in consumer expectation that all banks are having to grapple with.”
He further noted, “Customers don’t really care about banks — they’re more interested in what banks can accomplish.” And this is causing banks to re-think their brand strategy and brand promise.
This article by Peak Performance consultant Guenther Hartfeil and Brookline Branch Services associate Gianna Whitver was originally published in BAI Banking Strategies on December 1, 2016.
In an age of new channel investment, banks must restructure physical distribution and unlock value from hard assets in branches.
Almost all banks have grown by acquisition, resulting in a mix of facilities. Many older branches are oversized and single purpose in nature: former bank headquarters or large branches built for when the industry needed many more teller stations, drive-up lanes and deposit operations space than today.
So it’s no surprise that on the cusp of 2017, we have far more invested in facilities than needed—and in an ideal world, we would reduce branch configuration and cost. This would make banks more efficient and free up capital to invest in new channels that better meet changing customer needs.
The question is not whether this should be done. It’s how. As one bank CEO told us, “I know we have facilities that aren’t suited to our needs, but given the capital investment I can’t afford to do anything about it.”
But we need to do something about it.
This article by Peak Performance consultant Jon Voorhees was originally published in BAI Banking Strategies on October 10, 2016. Voorhees is former head of distribution strategy and execution at Bank of America Corp.
It seems like every week you hear about another bank’s plans to close some large number of branches. Some analysts predict (though I don’t agree) that half of all branches open today will close in the next few decades as online and mobile banking fully takes hold with consumers and small businesses.
Due to today’s very low interest rate environment, margins have been squeezed for several years. Banks have felt unrelenting pressure to cut expenses. And branch closures represent a natural target because customers have migrated many of their transactions to the newer, more flexible e-channels rolled out over the last ten years. There are even seemingly ubiquitous phrases that CEOs and CFOs trot out when announcing closures. Like these: