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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.

 

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