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Essential Fintech Reading: Oct 3-9

Embrace The Fintech Payments Revolution Or Become Obsolete, Warns BNY Mellon Report

While the financial services industry has one of the highest ratios of IT spend to revenue, over three quarters of this investment goes toward maintenance rather than new services. Banks must address this maintenance bloat, deploy technology more speedily and replace legacy payments systems if they wish to survive, concludes BNY Mellon in a new report, Innovation In Payments: The Future Is Fintech. Encouraging banks to meet with more nimble fintech startups in the digital payments space and educate key staff on digital currencies and blockchain, the report also recommends that banks adopt a payments hub to equip them "with a flexible IT infrastructure that is more malleable and better able to adapt to changing market needs than existing legacy systems." 

Accenture: The Death Of The Branch Has Been Greatly Exaggerated

While branch visits declined by 6 percent in the last year, the growing appetite for digital products and services does not spell the end of the branch workforce. This is the conclusion of a new Accenture report, Branching Out: The Case For The Human Touch In Banking, which notes that "customers turn to branches when they need complex financial products, such as mortgages and pension services." Accenture predicts that "customers’ reliance on branches ... will continue, despite the emergence of online tools such as mortgage calculators and investment trackers." Breaking with conventional wisdom, Accenture doubts that "digital players — with their limited physical presence and their focus on automating transactions—will ever be able to deliver the high-touch, personalized customer services that branch talent can." The report sheds further light on the branch skills gap and notes that banks will have to treat branch talent as a strategic asset. 

Successes And Failures With Branch Tablets

While banks have been able to use tablets to show off money management features to customers and streamline onboarding processes, many impediments still remain. Reporting for American Banker, Mary Wisniewski notes that many FIs have lacked secure Wi-Fi, tablet-friendly software offerings and integration with ATMs and instant-issue debit card machines. In-branch tablets are commonly used to demo digital features for new or existing customers and many financial institutions are using them to improve the experience of signing up for checking, savings accounts and credit cards.

Bank Of America Discusses Changing Mobile Landscape

Hari Gopalkrishnan, a managing director at Bank of America who oversees mobile banking for its consumer and wealth management business, tells Robert Barba of American Banker that mobile volume is overtaking online volume, with a 24% spike in mobile check deposit this year. Remarking on the emergence of both mobile security via biometrics and mobile payment systems like Apple Pay, Gopalkrishnan notes that the commercial side of mobile is still underdeveloped as "treasurers are still very much in a desktop mentality." While Bank of America had a customer approve a billion dollar money movement transaction on a mobile phone, Gopalkrishnan concedes it's still unusual. 

Bitcoin Exchange Executive Discusses Common Fintech Stumbles

Jaron Lukasiewicz, CEO of Coinsetter, shares five mistakes you should avoid when starting a fintech company. Lukasiewicz notes that fintech companies should avoid holding customer funds, since this activity typically requires regulatory licensing and lies outside their core competency. He also advises fintechs to focus on making banks better rather than trying to make them obsolete and address "boring, expensive pain points for banks rather than pursuing the obvious front end UI/UX issues." In a less than ringing endorsement for the legal profession, Lukasiewicz advises entrepreneurs to gain compliance advice by making friends with compliance advisors and knowledge executives at conferences, with lawyers only used as a last resort.