Independent Banker - November 2017 - 80

Nuts & Bolts
TECH TALK
All aboard the tech train
Trained by slick devices like iPhones and great user experiences from fintech
platforms, customers have come to expect their banks to offer the latest tech,
too. How can smaller community banks get in on the action?
By Tom Groenfeldt
customers simply haven't heard of
better digital services, [but] they feel
there is something special to that
community bank. "
Still, complacency is a danger
for community banks, warns Terence
Roche, a partner at banking
consultancy Cornerstone Advisors,
which publishes the edgy
Gonzobanker newsletter.
" Right now, fintechs are not
hitting community banks on
their balance sheets, " Roche says.
" Banks are not losing a lot of loans,
deposits or mobile customers, but
they are seeing a huge change in
consumer expectations [enabled
by technology]. "
Community banks are in danger
of thinking their customers are satisfied
with face-to-face interactions
with tellers, Roche adds. " They may
be right that their customers might
go to ... technology later, but they are
going to get there. "
C
ommunity banks and
fintech firms have
largely reached a stage
of peaceful coexistence.
The big banks spend
billions of dollars a year on cuttingedge
technology-and eventually,
much of that technology trickles
down to smaller banks, either
through their core system providers
or through specialist fintech firms
that link to cores through application
programming interfaces (APIs).
" We've had two decades where big
banks are far ahead of community
banks when it comes to digital
services, " says Peter Wannemacher, a
senior analyst at Forrester Research.
" That has already caused some
self-selection among financial
services customers. The person who
values top-of-the-line, bleeding-edge
digital services is likely to be with a
USAA or E*TRADE, Bank of America
Corporation or Discover Bank. Or
they divvy up their financial accounts
and keep some with their local
community bank because they like
Susan at the branch.
" That's some tepid comfort for
community banks. It's unlikely their
Sharing knowledge
The good news for community
banks is that fintechs are eager to
work with them, in part because
the technology acquisition process
at smaller banks is faster, making
them more approachable. A small or
startup fintech can run out of money
in the time it takes simply to find
the right person to approach at a
megabank. Technology also makes it
easier to adopt point solutions from
" We're likely to see banks that fall behind having to
sell to banks that have more robust technology. "
-MIKE PERITO, KBW
80 ICBA IndependentBanker November 2017

Independent Banker - November 2017

Table of Contents for the Digital Edition of Independent Banker - November 2017

Table of Contents
Independent Banker - November 2017 - Intro
Independent Banker - November 2017 - Cover1
Independent Banker - November 2017 - Cover2
Independent Banker - November 2017 - Table of Contents
Independent Banker - November 2017 - 2
Independent Banker - November 2017 - 3
Independent Banker - November 2017 - 4
Independent Banker - November 2017 - 5
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Independent Banker - November 2017 - 7
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Independent Banker - November 2017 - Cover3
Independent Banker - November 2017 - Cover4
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