Fico targets underbanked with alternative credit scoring system
Finextra outlines Fico's new scoring method, which is based on property records, telecommunications and utility information:
"The firm is now using data from LexisNexis and Equifax to give 12 of the largest credit card issuers a Fico score that complies with regulations and can be used to extend credit to new customers. The pilot is expected to be completed in the next few months before the service is extended to more firms."
Silicon Valley Bank Strengthens Its Roots
NYT's Nathaniel Popper covers the state of Silicon Valley bank, which is funding an enormous number of start-ups.
"Silicon Valley Bank has maintained a dominant position among start-ups and venture capitalists in one of the most promising and lucrative corners of the United States economy. By the bank’s count, it serves 65 percent of all existing start-ups and many of the most prominent venture capital firms."
Be Your Own Bank
Sonny Singh, the chief commercial officer of BitPay, writes in TechCrunch about how the underbanked and Millennials are increasingly finding different ways to get the services that at one time they could only get from banks. "Banks’ core financial services — payments, loans, insurance, etc. — are under attack from a wave of innovative fintech startups, who are placing downward pressure on banks’ operating margins." He adds that "customers are now in a position to start building their own financial infrastructure using a basket of companies that they know and trust." Suddenly there are a multiplicity of technology companies eating at the core of banking. For more on what banks can do about this, see our interview on how banks can use bitcoin.
Mobile payments leader must provide value to consumers and banks
Eric Dunstan writes about what financial institutions can do to improve payments.
"So where do banks fit in creating greater customer value? Apple Pay requires that customers enter in debit cards and credit cards to make payment. Banks provide these cards. Banks frequently offer rewards programs and provide an incentive to shop a designated retail location. By not actively engaging in this payments ecosystem, banks are losing out big time on engaging with customers in a meaningful way with relevant, geo targeted offers."
Augie Ray Interview: Cannibalize Yourself Before Others Cannibalize You
James Hodges asks Augie Ray, a customer experience professional at a F100 financial institution, for his views on how banks can improve the full experience for their account holders. Ray says banks need to think with a completely new mindset:
"I like to remind people that Borders failed the same year Forrester declared it had the best customer experience in the US. No brand wins by providing the best CX in a way consumers no longer desire. Segmentation tends to be more about serving today’s customers while innovation is about preparing for tomorrow’s."
Target Unique Consumer Segments With Specific Checking Products
Rob Rubin, Managing Director at Novantas talks about how to segment consumers based on checking account data.
"Consumers that currently have checking accounts (i.e., “Switchers”) have different functional requirements and behaviors than those who are “new-to-banking” and those who are “returning-to-banking.” As a result, different types of checking products appeal to each group."
Also check out our review of Ron Shevlin's book Smarter Bank.