Independent Banker - May 2019 - 46

banks to consider their options more carefully and plan
more strategically.
" The overall landscape is paved with all sorts of new
challenges, " says Brad Bolton, president and CEO of
$145 million-asset Community Spirit Bank in Red Bay,
Ala. " Institutions have to become technology, digital and
cybergovernance specialists to keep up with the fast pace of
change. It's a bit of a constant information overload. "
Indeed, today's customers have come to expect an
" always-on " experience. " That can be difficult for smaller
institutions to offer, " Bolton says. " The solutions that assist
in offering the experience today's customer wants are often
very costly. These costs are not ones that can be passed on
to the customer. They expect it to be free, because that is
the new normal. "
As community banks rely so greatly on their
relationships with their core vendors, Bolton points out
that it can often be difficult to integrate new technologies.
" So what your customer base is wanting, you may or may
not be able to fully offer, " he says.
Paul Schaus, president and CEO of CCG Catalyst
Consulting Group, says he keeps hearing the same thing
from his bank clients. " No matter the size, it's really about
how they can create differentiation when they all buy the
same [technology]. They're all looking for something new, "
he says.
Core of the issue
U.S. core banking vendors-chiefly FIS, Fiserv and Jack
Henry & Associates-have been hard at work in recent
years rapidly updating and expanding their offerings,
often through strategic acquisition. Most recently, they're
working on allowing easier integration with outside
financial technology software, which had previously
stymied community banks, according to Schaus and
other industry experts. " They will become more agnostic,
allowing banks to customize the end-client experience, "
he says. " [Core vendors] realize they need to create more
flexibility. It's all about the end-client experience. "
Indeed, there's " a lot of money flowing to the
applications and middleware sides " of IT for community
banks, he adds.
John Buhrmaster, president and CEO of $475 millionasset
1st National Bank of Scotia in Scotia, N.Y., says he
constantly bugs his community bank's IT vendors to keep
up with the latest innovations. " They're doing a good job
with existing systems, but as far as new products, that's
where it gets trickier, " he says.
Being a smaller bank, 1st National Bank of Scotia often
must wait for months or years after signing up to get up
and running with emerging payments or fintech offerings,
as vendors usually prioritize larger bank customers,
Buhrmaster says. The community bank has been on the
waitlist to offer Apple Pay for years and has yet to queue up
to offer customers the increasingly popular Zelle payments
service. " Our vendor is just not ready yet. They're triaging
it, " Buhrmaster says, adding that it's typically the larger
bank customers that will become more profitable more
quickly, so there is a business rationale.
On the other hand, 1st National Bank of Scotia's core
vendor has done a bang-up job getting the community
bank up to date with online and mobile banking, web
offerings and debit cards, all of which the bank just
upgraded last year. " We are keeping up with the Joneses
with our existing [customer-facing] technology there, "
Buhrmaster says, " but you always want something new and
better. We're always requesting enhancements. "
Buhrmaster sits on the enhancement review committee
for 1st National Bank of Scotia's core vendor. " Core
vendors are beginning to realize that they cannot be
all things to all people, even despite their mergers and
acquisitions over the past 10 years, " he adds. " And so many
fintechs are moving at lightning speed. "
Mike Carter is the executive vice president of Strategic
" Institutions have to become technology, digital and cybergovernance
specialists to keep up with the fast pace of change. It's a bit of a
constant information overload. "
-Brad Bolton, Community Spirit Bank
46 Q ICBA Independent Banker Q May 2019
Independent Banker - May 2019

Table of Contents for the Digital Edition of Independent Banker - May 2019
