Independent Banker - November 2017 - 81

technology specialists; rather than
write their own expensive customer
interfaces, community banks can
often link to new solutions through
third-party APIs.
This gives smaller banks access to
the latest digital technology in areas
such as online and mobile banking,
even if their core systems have not
been upgraded yet, says Mike Carter,
EVP at banking consultancy SRM.
Community banks no longer have
to accept the bundles offered by their
primary software provider; they can
pick and choose.
" We've had two decades
where big banks are far
ahead of community
banks when it comes
to digital services. That
has already caused
some self-selection
among fi nancial
services customers. "
-PETER WANNEMACHER,
FORRESTER RESEARCH
The danger of fi ntechs hasn't
entirely disappeared, though, Roche
says. Quicken Loans is now one of the
top three mortgage originators in the
country and is setting new standards
in simplifying the previously paperintensive
process so that much of it
can be done from a mobile phone.
Still, community banks have the
customers and the deposits to provide
low-cost funding for loans.
Matt Johnner is president and
cofounder of BankLabs, which
provides technology solutions for
community banks. He says that with
good mobile technology, community
banks can level the playing fi eld with
tech fi rms, as well as with the big
banks, to a great extent. " They still
have the relationships in the market;
the fi ntech fi rm has only the tech, not
the relationships, " Johnner says.
Impact on branches
The biggest challenge facing community
banks is balancing the cost
of technology with the high cost of
maintaining a physical branch, says
Mike Perito, senior banking analyst
at KBW. The fi rst question in retail
banking is what happens to branches.
Foot traffi c may be down, but there is
still an aspect of banking, especially in
complex areas such as mortgages and
business lending, where people like
having a physical location to develop
a personal relationship.
Competition doesn't only come
from fi ntechs. Community banks
are also susceptible to competition
from other community banks in
their region that use technology to
46%
Percentage of customers
who now interact with their
banks exclusively via digital
channels, according to
PwC's 2017 Digital Banking
Consumer Survey
provide new and better services and
reduce costs.
" We're likely to see banks that
fall behind having to sell to banks
that have more robust technology, "
Perito says. Partnering with fi ntechs
thereby looks like a good opportunity
to stay one step ahead.
Tom Groenfeldt is a writer
in Wisconsin.
SNAPSHOT:
HOW DID PEOPLE USE MOBILE BANKING
IN SEPTEMBER 2017?
18
Average number
of times each
user logged into
his or her mobile
banking account
2.75
Average number of
checks each user
deposited via
remote capture
70%
of all consumer
money movement
digital transactions
were internal
transfers
1.2%
of active digital
banking users made
p2p payments within
their bank's app
3%
made an a2a transfer
(account to
account; to their own
account at another
fi nancial institution)
Source: The October 2017 Monkey Insights from Malauzai Software, Inc.
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