Employees with strong technical skills are in high demand and are being actively recruited by pure technology companies as well as fintechs. From the fintech perspective financial services experience is not a major consideration. They focus on prospects’ technical skills which put them in direct competition with regular technology companies. Where does that leave traditional financial institutions seeking that same talent? They need to be forward-thinking and flexible with how they structure their positions in order to be competitive in this job market.
Banking as a Service (BaaS) offers financial institutions opportunities to increase non-interest income by ‘renting’ their charter to fintech companies. Assuming, of course, that they have an API interface to their core system. There are downsides though, including increased non-interest expense and additional risk exposure. This Cornerstone article highlights some of the opportunities and challenges.
The use of crypto-currencies for payments has taken a major leap forward through the emergence of debit and credit cards tied to crypto-currency exchanges. While still a small proportion of total transaction volume, growth is rapid and financial institutions need to take note. Wide-spread adoption of crypto may occur sooner than anticipated.
Communicating with regulators about planned innovation projects is something that should be embraced rather than avoided. Bank examiners understand the need for financial institutions to transform their operations and will likely be supportive. Proactive communications will help improve the regulatory agencies’ confidence in the company’s ability to understand and manage risks, and will help avoid potential ‘surprises’ later on.
A ‘premortem’ is a structured process that occurs as a new project kicks off. The objective is to try to imagine potential causes of failure so that they can be addressed early on. This highly collaborative exercise can help avoid ‘group-think’ and anticipate potential problems from the perspectives of multiple team members.
City National Bank embraced the concept of ‘co-creation’ as they began their journey to significantly upgrade their mobile banking app. This involved working directly with customers and prospects to determine needs and priorities, taking the entire group through the design process all the way from inception to wireframe mockups. This helped them successfully roll out a new app tailored to actual customer needs.
