FINTECH ARTICLES OF THE WEEK 09/10/16
I am generally gung-ho on banks and their need to embrace FinTech partners and on the need for FinTech firms to build the systems that can help smaller banks compete. The record, yet rather paltry, $185 million fine levied on Wells Fargo for fraudulently opening accounts to meet sales targets gives some support to that thesis, even though it’s another black-eye for the industry.
The experience of a small business owner I know in her failed attempt to secure a line of credit from her independently owned bank doesn’t make it much easier to back the banks either. The credit decision was slow in coming, and the reason given for the rejection was unclear, shrouded in lending jargon and math.
Yet banks appear to be looking at what it takes to compete, as this week’s links show. The most-read article last week at BAI.org considers how banks can compete with marketplace lenders for small business loans, where speed is the most important consideration. FinTech firms are responding as well, with half of the six best-of-show winners at last week’s New York Finovate event focused on technologies designed to improve bank customer experience.
Escaping the squeeze: three forces challenging mid-sized FIs
Despite the uptick in auto lending and a larger share of the mortgage market, mid-sized banks and credit unions are feeling a pinch from FinTech firms encroaching upon their territory in loans and deposits. Not to mention the fact that larger banks are nabbing millennials. In an article for The Financial Brand, Ron Shevlin outlines how smaller financial services institutions can reclaim their share of the market, starting with their marketing strategy and owning “the financial health position.”
Aces up banks’ sleeves
Banks must remember what assets they have as they compete for FinTech customers, assets meaning their massive customer base, their generations-long relationships with these customers, and established infrastructure, among others. Let’s Talk Payments breaks down why banks need to tap other resources to edge out their FinTech competitors.
Mobile is the heaviest used banking channel as transactions multiply
A new Fiserv report shows the average user accesses mobile banking 8.4 times within a 30-day period, Mobile Commercial Daily reports. The survey finds that 40% of consumers report having using mobile banking within the past 30 days, a number that jumps to 77% of early millennials. Of this 40%, more than 50% said they use the service more now than a year ago.
Mobile payments 0.9: Why is tech forever stuck in beta?
“Years of efforts by banks, payment networks, tech startups, wireless networks and retailers have failed to a produce a mobile wallet app that’s broadly used and accepted,” writes Kate Fitzgerald in a post for Paymentssource. She poses the critical question, “Why are payments pundits so confident in the adoption of mobile wallets when the majority of payments are made with cash, checks and plastics cards?”
The state of FinTech Industry as we know it infographic
Call Levels, a financial monitoring and notification service company, released an infographic detailing the FinTech sector’s growth, FinTech Finance shows. See which other firms join Lufax and Wealthfront among the top FinTech startup unicorns along with other facts and figures.