"Strategic insight combined with clear, concise and actionable solutions"

Strategy

BY: DAVID KERSTEIN, Peak Performance Consulting Group, and DAN MERCURIO, Cambridge Savings Bank.  This article was originally published in BAI Banking Strategies.

 

Compelling digital offerings aren’t just a consumer expectation anymore. They are a necessity to stay competitive.

 

 

 

But many financial institutions, especially smaller ones, are stuck in a holding pattern—with too many confusing options and choices to grasp a clear sense of how to move forward. What’s the best way to harness new digital technology to deliver the desired results? How should you select the right partner? What key strategies lead to successful implementation?

 

 

If there remains any question that the FinTech revolution is disrupting the banking ecosystem, just ask Millennials: 73 percent believe innovation will come from outside the industry and 33 percent believe they won’t need a bank at all to serve their financial needs.

 

With the current technology sprint, it’s often hard to make sense of it all. (The iPhone, after all, is only 10 years old.) Today, FinTech startups don’t compete with banks head-on but focus instead on specific services historically integrated within the bank’s core offerings. It can feel like death by a thousand cuts.

 

Let’s step back a moment and consider this from the customer’s perspective. Leading FinTechs are competitive because they focus on products and segments banks don’t serve well, such as micro-business lending, unsecured lending and roboadvisory. FinTechs also show particular skill at creating a frictionless, intuitive customer experience.  Many offer faster payment processing. Others provide simplified, instant business loan processing by connecting directly to information sources for verification, instead of relying on customers to gather and provide paperwork.

 

 

In our view, partnering with innovative FinTechs instead of trying to develop solutions in-house is a no-brainer.  Jamie Dimon, CEO of JP Morgan Chase, described it well: “(FinTech partnerships) offer the kind of stuff we don’t want to do or can’t do, but there’s someone else who can do it.”

 

So what should smaller financial institutions do?

Continue reading

Share

For years the industry’s eyes were on Wells Fargo as a cross-selling winner. That reputation went down in flames with last year’s sales scandal. But banking’s eyes continue to scan Wells, which recently introduced a revamped performance management and rewards program that the bank’s leadership described as a beginning, subject to revision based on ongoing experience.

 

“The devil is in the details,” and the potential improvement lies in careful monitoring were points of agreement among experts interviewed by Banking Exchange  who looked at the summary released by the bank earlier in January.

 

“It’s a very positive step,” says David Kerstein, president of Peak Performance Consulting Group. “I’m pleasantly surprised that they have taken such aggressive steps. I think this is the right way to go for the industry, not just for Wells Fargo.”

 

He says it would be essential to use such tools as mystery shopping to have an independent view of how well the program works where customer meets banker.

 

“You have to be sure that you are building customer relationships and doing the right thing,” says Kerstein. “Wells had lost sight of the overall customer,” he adds, in its earlier emphasis on cross-selling. If the bank can make the team dynamic work and produce the longer-term results it hopes for, that will be a very positive development, he says.

 

Further, if employees can truly work as a team, and the incentives pay off in that context, “turnover may be reduced,” Kerstein adds.

Share

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.

 

Share

A businessman is consulting a crystal ball to foretell the future.

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.

  Continue reading

Share

In a recent Banking Exchange article, David Kerstein, president of Peak Performance Consulting Group, observed that there is no needbanking-exchange-logo 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.

 

Share

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.

Share

Follow us on...

Twitter  LinkedIn  Facebook  

Archives