Independent Banker - November 2023 - 53

3. DATA AND
ANALYTICS
Individual bank
solutions, such as
loan origination
or account opening, may have offered
analytics for years, but they fall far
short of offering a complete picture
of customers' relationships with the
bank. The data is siloed within the
product itself, limiting its usefulness.
But robust data analytics platforms
and tools are quickly changing that
landscape. It's a culmination of
needing customer data to improve
the overall customer experience and
real-time insights that can guide
decision-making. Data analytics tools
can consolidate the different sources a
bank may have, from the core vendor
to loan origination to underwriting.
And the use cases for analytics are
far-reaching. Banks can use the data to
offer more targeted and personalized
marketing experiences, evaluate
customer behavior that affects the
bank's balance sheet, evaluate risk in
the loan portfolio, and even develop
new product offerings. The existence
of data is one thing; putting it into
action is another.
Greg Evans, president and CEO of
$2.6 billion-asset Merchants Bank
N.A. in Winona, Minn., has found
that there's a lot of utility in data and
the ability to leverage data analytics.
" I think as bankers, especially
community bankers, we have really
rich intuition about our customers,
our communities and our portfolios, "
he says.
" But the data doesn't lie, " Evans
notes. " Who we think our best
customers might be, or our most loyal
customers might be, isn't always what
we think it is. " Unified, objective, rich
data can answer those questions for
banks and give them the ability to
move quickly and address marketdriven
trends.
The wild west of
cryptocurrency
If community banks were curious about the claims
and promises of cryptocurrency, that curiosity has
turned into full-blown skepticism and frustration
in the wake of 2022 and the subsequent " crypto
winter. " Following the bankruptcies of several major
cryptocurrency exchanges and the spectacular
implosion of FTX (along with tens of millions of
dollars missing), it begs the question: How does
crypto recover?
Bankers have long been saying that entities
claiming to be financial institution equivalents have
posed major risks. Lack of oversight and regulation
certainly played a role in the downfall of some of
these entities. And for banks that still want to support
a customer's digital assets, there are still very big,
unresolved regulatory and legal questions.
Without clear guidance from policymakers, the
world of crypto continues to be an uneven playing
field. Banks must follow specific laws, while these
other entities don't.
In June, ICBA asserted that most crypto assets
likely qualify as securities and should be subject to
securities laws and regulations.
On a global level, the issues become even more
complex. While cryptocurrency could facilitate
global funds transfer, world leaders must develop
a global crypto policy framework, an issue on the
table for the G20. Without it, a single country's " light
touch " approach could lead to a hotbed for cryptorelated
bad actors.
This is, perhaps, one arena where " wait and see " is
the best approach.
independentbanker.org // 53
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Independent Banker - November 2023

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