Like many other large, complex and regulated industries, the very foundation of banking is being challenged, to the point that we often hear the saying,“Banking is necessary; banks are not.” Yet, here we are today with hundreds of financial technology (FinTech) startups gunning for wallet share and disrupting an industry that is at the very root of Read More
The retail industry is perhaps one of the most advanced verticals when it comes to effectively using data analytics to engage customers at the right time, in the right context and with the right information to increase sales. Retailers excel at capturing data on customer behaviors, preferences and buying patterns and then analyzing it to create highly Read More
Editor Note: David Kerstein has updated this article. Banks are hungry for growth: hungry for new customers, for deeper and more profitable relationships with existing clients and for better alignment of expense against revenue opportunities. But achieving that growth is a difficult challenge. Low interest rates continue to put pressure on margins. According to the most recent Read More
Data breaches have become so common that virtually no business or financial institution is safe. The 2015 Verizon Data Breach Investigation Report confirmed that the top three industries most affected were public, technology/information, and finance. Data breaches cause data integrity to be compromised, including important financial and personal customer information, which puts customers and the organization at Read More
Smartphones are increasingly recognized as a natural conduit for everyday financial transactions, such as making payments and scanning checks for deposit. Still, some financial business is not meant for the small screen – or any size screen, for that matter. Many consumers continue to value the opportunity to sit down and talk through their financial options for Read More
I find it interesting that so many bloggers on financial technology (fintech) sites deride the banks for being slow, clueless or stupid. They talk about how banks don’t do this, don’t do that; fail at this, fail at that; have no idea, cannot change; are stuck in the past or have their heads in the ground like an Read More
With fraud prevention, many banks emphasize how their systems leverage “big data” to find patterns of unusual activity by using data analytics to process through millions of transactions and pinpoint fraudulent activity. While big data has many advantages in fraud detection, it has also alienated some banks and other financial services institutions that think they are too Read More
Although banks have continually sought to offer better products and prices to improve the customer experience, since the financial crisis many have been hampered in these efforts by regulatory burdens and a cost-cutting mindset. The inability to devote sufficient resources to delighting customers is a paradox, because banks have a real need to attract new customers and Read More
Banks, especially small and mid-sized banks, are currently dealing with several difficult cost and growth challenges. Low interest rates, regulatory constraints on products and services, high costs for compliance and cybersecurity put significant pressure on their bottom-line. In addition, they face powerful new entrants, e.g., for payment systems and finance companies who seek to find and exploit Read More
Customer data and efficient access to analytics derived from client data is critical for a bank’s competitive advantage, yet it’s also an advantage that institutions heedlessly give away. Consider that the typical community or regional bank tends to evaluate its core technology vendor contract renewal every five to seven years. This is an onerous process cluttered with Read More
Data governance – the process by which banks ensure that the data they manage and ultimately include in their financial statements is accurate and trustworthy – has become increasingly critical as financial services institutions face immense regulatory scrutiny to prove the trustworthiness of those financial statements. As the Basel Committee on Banking Supervision and other sources have Read More
When undergoing a core conversion, bankers often assume that they need to convert, import and then integrate all of their archive data within the new production system. But many don’t realize that integrating all of this data is incredibly costly, time consuming and, more often than not, unnecessary. While a bank is required to keep archive data Read More
The combination of multi-jurisdiction risk reporting and increasing product complexity has created a data explosion within financial services. While trusted data is integral to uncovering value and managing risk, optimizing the balance sheet is becoming a challenge for financial institutions. This problem is only intensifying with the passage of the Dodd-Frank Act and over-the-counter (OTC) clearing reform. Read More
Whenever we hear laments about banking’s supposedly slow embrace of the cloud, we beg to differ. While a recent poll found that 52% of banks avoid cloud entirely, largely because of security concerns, you can also say that 48% of banks do make use of cloud computing. That consists of 22% who utilize the cloud “a lot” Read More
Retail banks need to create digital experiences (e.g. online and mobile banking) that build customers’ trust and increase their perceptions of transparency. According to Forrester, companies providing a superior user experience generated: 14.4% more customers willing to purchase their product; 15.8% fewer customers willing to consider doing business with a competitor; and 16.6% more customers likely to Read More
What to do about low-volume branches, or LVBs, which weigh down the profitability of nearly every financial institution? We define these underperformers as branches that process fewer than 3,000 transactions per month. As documented in FMSI’s 2014 Low Transaction Volume Branch Study, LVBs account for 25% of most retail branch networks, yet they constitute only 8% of Read More
Two of the more high profile themes in retail banking last year were improving the customer experience and big data. 2015 is the year when we’ll see these topics merge. That said, many banks will stumble in their efforts to use big data to achieve a higher state of customer understanding, or even the less lofty goal of a slightly Read More
Bankers continue to see pressure on net income and many are attempting to improve results by reducing expenses and maximizing fee income. In doing so, they are being reminded of just how hard it is to squeeze more net income out of current period revenue. The traditional assumption is that improving profitability means expense reductions. A better Read More
For those who have been in the banking industry for a while, the pace of change has picked up noticeably. Previously, change happened so slowly that minor modifications to how we did business, implemented through the budgeting process, were sufficient to keep our bank relevant. Those days are long gone. Gone are the rigid regulatory restrictions on Read More
The heightened use of customer insight for the delivery of financial services and the continued impact of digital channel development dominated the list of predictions that I gathered for the fourth edition of my annual banking trends study. The contributors also agreed that customers will continue to demand more from their financial institutions and that competition will Read More
