American Banker's Penny Crosman covers the news about the continued fintech boom. Given the dramatic rise of venture capital money in 2015, many analysts wondered what would happen in 2016. Now we know. The first quarter of 2016 brought a 67% investment increase over the same period in 2015, indicating that fintech is still hot.
Goldman Sachs is launching a new online-only retail bank, writes CNBC's Jessica Dickler. This move allows Goldman to offer savings interest rates of 1.05%, a relatively stellar rate given today's climate. Because these online banks are able to lower costs and offer higher savings rates, they've proven quite popular over the past decade. Dickler recounts statistics from TNS research showing that "online-only banks were the only category of banks to gain share in the past decade among retail customers establishing or moving their primary banking relationships" and "online-only banks now attract approximately 12 percent of all new primary banking relationships in the U.S., compared with only 4 percent a decade ago."
Aaron LaRue lists reasons why it's so hard to take mortgage origination into the 21st century, including legacy system integration, complex processing, etc. He writes that "an innovative mortgage company would combine a customer-focused, experience-driven product team with a group of seasoned mortgage professionals. This super-team would come together, surrounded by the infrastructure required to grow and fed with capital to invest in building a platform, and they could fundamentally change the way home loans are done."
Eyal Lifshitz outlines three ways that banks will remain a vital part of the economy 10 years from now: 1) "build their own competitive solutions" 2) "buy those solutions" 3) "strike deals that make banks a critical part of the “plumbing” for those solutions." In options two and three, banks and fintech complement each other.
Jim Marous writes that banks and credit unions should take a page from Amazon and leverage data analytics to give consumers personalized recommendations. He claims that advanced analytics is the key going forward, writing that "the banking organizations who win the battle for the customer in the future may not have branches, the friendliest employees, the best products or even the best technology. They will have the best understanding of their customers. Without an intimate understanding of the consumer, enabled through advanced analytics, and the ability to deliver flawlessly, a relationship is always at risk."
In this interview with MoneySummit, Jill Castilla details how Citizens Bank of Edmond regularly gets crowds of 20k to their customer appreciation day and why they've sold all their branches in favor of a digital-first strategy.