Daily Briefing: Sunday at Acquire or Be Acquired

PHOENIX — When Bank Director first introduced our Acquire or Be Acquired Conference 25 years ago, some 15,000 banks operated in the United States. While that number has shrunk considerably — there are 5,120 banks today — the inverse holds true for the importance of this annual event. What follows are two short videos from our first day in the desert that surface a few key ideas shared with our 1,300+ attendees.

Three Interesting Stats:

  1. Of the 5,120 banks in the U.S., 4,631 are under $1Bn in asset size and 489 are over that amount.
  2. Two years ago, we talked about the sweet spot of banking being banks between $5B and $10B in asset size; now, its those with assets of $50B+.
  3. Digital channels drive 35% of primary banking relationship moves, while branches drive only 26%.

_ _ _

  • Whether you are able to join us in person or are simply interested in following the conference conversations via our social channels, I invite you to follow @AlDominick @BankDirector and @Fin_X_Tech on Twitter. Search & follow #AOBA19 to see what is being shared with and by our attendees.
  • The Best of FinXTech’s Annual Summit

    Quickly:

    • FinXTech’s annual Summit brought together senior executives from across the financial space to focus on new growth strategies and opportunities related to technology.

    PHOENIX — I’ve spent the past few days with bank leaders, technology executives, investors and analysts interested to explore emerging trends, opportunities and challenges facing many as they look to grow and scale their businesses.  So as I prepare to head home to DC after some wonderfully exciting days at Bank Director’s annual FinXTech Summit, a few highlights from my time in the desert.

    The 10 Finalists for 3 FinXTech Awards

    For me, one of the signature pieces of this year’s program occurred on Thursday evening.  Under the stars, we recognized ten partnerships, each of which exemplified how banks and financial technology companies work together to better serve existing customers, attract new ones, improve efficiencies, bolster security and promote innovation.  The finalists for this year’s Best of FinXTech Awards can be seen in this video.

    Winners of the 2018 Best of FinXTech Awards

    We introduced these awards in 2016 to identify and recognize those partnerships that exemplify how collaborative efforts can lead to innovative solutions and growth in the banking industry.  This year, we focused on three areas of business creativity:

    • Startup Innovation, to recognize successful and innovative partnerships between banks and startup fintech companies that have been operating for less than five years.
    • Most Innovative Solution of the Year, to highlight forward-thinking ideas, we recognized partnerships that have resulted in new and innovative solutions in the financial space.
    • Best of FinXTech Partnership, a category to recognize outstanding collaboration between a financial institution and fintech company, we based this award on growth by revenue, customers and/or reputation plus the strength of integration.

    The winners? Radius Bank and Alloy for Startup Innovation, CBW Bank and Yantra Financial Technology for Innovative Solution of the Year and Citizens Financial Group and Fundation for Best of FinXTech Partnership.  To learn more about each, check out this cover story on BankDirector.com

    Favorite #FinXTech18 tweet

    Well played with the ZZ Top reference — now we just needs to grow out that beard and drop a pair of RayBans into the shot.

    Favorite picture

    DSC03946.JPG

    Three timely (and paraphrased) comments

    1. COMMUNICATION is key…. said nearly every presenter.
    2. Make the tough call to kill bad tech or a bad relationship. You’ll lose customers if you don’t react quickly (h/t to our VP of Research, Emily McCormick).
    3. Change is the key to being valuable; start thinking and working like a startup (h/t @nabeelmahmood).

    Video Recaps

    During our time in the desert, we shared a number of videos on BankDirector.com.  The page with all videos can be found on FinXTech Annual Summit: Focusing on What’s Possible.  To get a sense of what these short videos look like, here is an example:

    Thanks to all those who joined us at the Phoenician.  For more ideas and insight from this year’s event, I invite you to take a look at what we’ve shared on BankDirector.com (*no registration required).

    Banks, Make Your Move Into the Cloud

    Quickly:

    • To deliver a truly end-to-end digital customer experience, banks need to figure out how and when to move into the cloud.

    PHOENIX — As we kicked off this year’s FinXTech Summit, I found myself engaged in a conversation about how (and why) banks might “freeze and wrap” their data using their current core system while moving their customer engagement and analytics into the cloud.  While this was my first time hearing that particular description/approach, the underlying logic certainly applies for many of the bankers joining us at the Phoenician.  In fact, it inspired this short video shot during today’s lunch.

    As a company, we’ve been writing about banks realizing that the benefits of cloud computing outweigh added security risks for a while now.  But it strikes me that interest in cloud-based platforms has been on the rise of late.  As our friends at Blend shared on BankDirector.com, “the cloud presents opportunities for enhanced efficiencies and flexibility — without any security trade-offs — so it’s no surprise that we’re seeing more organizations shift to the software as a service (SaaS) model.”

    Interested to see what a move into the cloud might means for banks?  Take a look at these five cloud-based companies:

    • nCino – expediting loans and workflow on top of force.com;
    • Apiture – an API-banking joint venture between Live Oak and First Data;
    • Payrailz – an API-based payments platform “check-free killer;”
    • Defense Storm – where Big Data meets Cyber for banks; and
    • Greenlight – offering debit cards for kids.

    I’ll check in later tonight to recap several presentations that explore what makes for a strong, digitally-solid bank.  Before that posts, I invite you to follow the conference conversations via our social channels.  You can follow me @AlDominick on Twitter — and our team shares ideas and information through @BankDirector plus our @Fin_X_Tech platform. Finally, search & follow #FinXTech18 to see what’s being shared with (and by) our attendees.

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    FWIW, my reference to Amazon.com, Salesforce.com and Oracle in this video traces back to January 2, when Bloomberg reported the first two were “actively working to replace Oracle software running on crucial business systems with lower cost open-source database software.”  For more: Amazon, Salesforce Shifting Business Away From Oracle: Report

    The Intersection of Ideas and Opportunities

    Quickly:

    • In a few days, the lights come up on the annual FinXTech Summit, a program that explores ways for banks to delight customers, generate top-line growth and enhance bottom-line profits through partnerships and investments in technology companies.

    PHOENIX — When I last stepped foot in Arizona, it was to host Bank Director’s annual Acquire or Be Acquired Conference.  The January event attracts a hugely influential audience focused on mergers, acquisitions and growth strategies & tactics.  While there, we noticed quite a few presentations explored how and where financial institutions might invest in, or better integrate, digital opportunities.  So, as a complement to Acquire or Be Acquired, I’m back in the desert to dive deeper into myriad ideas for banks to improve profitability and efficiency with the help of technology firms.

    As we prepare to host our FinXTech Annual Summit at the Phoenician, take note: smart banks are investing and/or partnering with technology companies because they realize it’s cheaper and faster than building something themselves.  Further, the largest banks in the U.S. are rapidly evolving with advances in artificial intelligence across chatbots, robo-advisors, claims, underwriting, IoT and soon blockchain — all of which add another layer of potential to further shake-up traditional business models.  In fact, there was a palatable sense among bankers at AOBA about the evolution in financial technology.

    Nonetheless, many banks, especially those between $500M and $30Bn in assets, are on the outside looking in — and this is where FinXTech’s Summit story begins.

    From exploring data to leveraging cognitive computing to gaining efficiencies in backroom processes, this year’s event surfaces a number of potent ideas.  For instance, we shine a light on how bank leadership can truly unleash the potential of a technology partner.  Further, we pull current quotes and issues like these to discuss and debate:

    One thing I love about customers is that they are divinely discontent. Their expectations are never static — they go up. It’s human nature. We didn’t ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary’
    Jeff Bezos, Founder and Chief Executive Officer

    Likewise, we share our takes on key acquisitions — like JP Morgan’s acquisition of WePay — while identifying how institutions leverage newer technologies to improve efficiency ratios and in some cases, boost franchise valuations.

    In a sense, FinXTech’s Summit serves as our “in-person” bridge between banks and qualified technology companies.  For those joining us, we’ll touch on various products and services for security, data & analytics, infrastructure, lending, mobile banking, payments and regtech while convening an exceptionally senior audience of 200+.  Throughout the event, I’ll share my thoughts via Twitter, where I’m @AlDominick and using #FinXTech18.  Finally, I’ll author a daily update on this site with my observations from the conference.

    3 Key RegTech Themes

    Quickly:

    • Machine learning, advanced analytics and natural language processors dominated conversations at yesterday’s RegTech program at NASDAQ’s MarketSite.

    NEW YORK — Where will technology take us next?  As many banks embrace digital tools and strategies, they inevitably grapple with regulatory uncertainty.  This naturally creates friction in terms of staffing levels, operational expenses and investment horizons.  With so many regional and national banks continuing to grow in size and complexity, the responsibility to provide appropriate oversight and management escalates in kind.

    Likewise, as more and more community banks rely on technology partners to transform how they offer banking products and services, management teams and boards of directors grapple to assess how such relationships impact compliance programs and regulatory expectations.  Can technology truly deliver on its promise of efficiency, risk mitigation and greater insight into customer behavior?

    To address questions and observations like these, my team hosted the Reality of RegTech at NASDAQ’s MarketSite on April 18.  Entering the MarketSite, we aspired to surface ideas for banks to better detect compliance and regulatory risks, assess risk exposure and anticipate future threats by engaging with technology partners.

    Over the years, our annual one trek to NASDAQ’s New York home afforded us opportunities to:

    • Learn how BNY Mellon encourages innovation on a global scale;
    • Identify where early-stage technology firms realistically collaborate with financial services providers; and
    • Explore lending strategies and solutions for community banks.

    This year, we focused on the intersection of technology with regulation, noting that banks can and should expect an overall increase in regulatory constraints on topics including supervision, systemic risk (such as stress tests), data protection and customer protection.

    For Forward-Thinking Banks

    At Bank Director, we see the emergence of regulatory-focused technology companies helping leadership teams to bridge the need for efficiency and security with growth aspirations. However, understanding how and when to leverage such technologies confounds many executives.  As our Emily McCormick wrote in advance of the event, forward-thinking banks are looking within their own organizations to figure out how the deployment of regtech fits into the institution’s overall strategic goals while matching up with culture, policies, processes and talent.

    Key Takeaways

    1. RegTech is, by its very nature, constantly evolving.  Current solutions focus on one of two things: reducing the cost of compliance via automation or leveraging technology to deliver more effective compliance.
    2. The flip side to the promise of these solutions is a skepticism and concern by both regulators and banks that RegTechs really are in this for the long-haul, are reliable and “safe” to work with.
    3. A first step for banks not already using RegTech?  Develop an implementation road map for one specific need (e.g. BSA / AML) which aligns to the overall strategic vision of the organization (in this case, a desire to grow through acquisition).

    Interesting Reads on RegTech

    Multiple presentations touched on how and where banks can maximize the potential benefits of their RegTech endeavors by addressing key risks; for instance: uncertain development paths, provider reliability, increased regulatory scrutiny, limited judgment and privacy concerns.  For those looking to go deeper on these issues:

    1. PwC authored a Regulatory Brief that discusses (a) how banks are using RegTechs, (b) the current RegTech landscape, and (c) what banks should do to prepare for RegTech.
    2. Continuity offers an e-book along with a step-by-step system for predictable, repeatable compliance results.
    3. Ascent blogs about the impact of artificial intelligence on regulatory compliance in its Top 5 Ways AI in Compliance Will Affect You in 2017.

    Multiple members of the team shared insight and inspiration with #RegTech18 on Twitter (usually tying into our @Fin_X_Tech and @BankDirector handles).  Finally, be sure to check out BankDirector.com (no subscription required) as our editorial team offers up a number of perspectives on RegTech and this year’s event.

    21 Reasons I Am Excited About Acquire or Be Acquired

    Quickly:

    • Making banking digital, personalized and in compliance with regulatory expectations remains an ongoing challenge for the financial industry. This is just one reason why a successful merger — or acquisition — involves more than just finding the right cultural match and negotiating a good deal.

    By Al Dominick, CEO of DirectorCorps — parent co. to Bank Director & FinXTech.

    PHOENIX, AZ — As the sun comes up on the Arizona Biltmore, I have a huge smile on my face. Indeed, our team is READY to host the premier financial growth event for bank CEOs, senior management and members of the board: Bank Director’s 24th annual Acquire or Be Acquired Conference. This exclusive event brings together key leaders from across the financial industry to explore merger & acquisition strategies, financial growth opportunities and emerging areas of potential collaboration.

    AOBA Demographics

    The festivities begin later today with a welcoming reception on the Biltmore’s main lawn for all 1,125 of our registered attendees.  But before my team starts to welcome people, let me share what I am looking forward to over the next 72 hours:

    1. Saying hello to as many of the 241 bank CEOs from banks HQ’d in 45 states as I can;
    2. Greeting 669 members of a bank’s board;
    3. Hosting 127 executives with C-level titles (e.g. CFO, CMO and CTO);
    4. Entertaining predictions related to pricing and consolidation trends;
    5. Hearing how a bank’s CEO & board establishes their pricing discipline;
    6. Confirming that banks with strong tangible book value multiples are dominating M&A;
    7. Listening to the approaches one might take to acquire a privately-held/closely-held institution;
    8. Learning how boards debate the size they need to be in the next five years;
    9. Engaging in conversations about aligning current talent with future growth aspirations;
    10. Juxtaposing economic expectations against the possibilities for de novos and IPOs in 2018;
    11. Getting smarter on the current operating environment for banks — and what it might become;
    12. Popping into Show ’n Tells that showcase models for cooperation between banks and FinTechs;
    13. Predicting the intersection of banking and technology with executives from companies like Salesforce, nCino and PrecisionLender;
    14. Noting the emerging opportunities available to banks vis-a-vis payments, data and analytics;
    15. Moderating this year’s Seidman Panel, one comprised of bank CEOs from Fifth Third, Cross River Bank and Southern Missouri Bancorp;
    16. Identifying due diligence pitfalls — and how to avoid them;
    17. Testing the assumption that buyers will continue to capitalize on the strength of their shares to meet seller pricing expectations to seal stock-driven deals;
    18. Showing how and where banks can invest in cloud-based software;
    19. Encouraging conversations about partnerships, collaboration and enablement;
    20. Addressing three primary risks facing banks — cyber, credit and market; and
    21. Welcoming so many exceptional speakers to the stage, starting with Tom Michaud, President & CEO of Keefe, Bruyette & Woods, Inc., a Stifel Company, tomorrow morning.

    For those of you interested in following the conference conversations via our social channels, I invite you to follow me on Twitter via @AlDominick, the host company, @BankDirector and our @Fin_X_Tech platform, and search & follow #AOBA18 to see what is being shared with (and by) our attendees.

    Address the Culture Gap Between Banks and FinTechs

    By Al Dominick, CEO of DirectorCorps (parent co. to Bank Director & FinXTech) | @aldominick

    Quickly

    • A “bank|fintech partnership” narrative dominated the conversation at last week’s FinTech Week NYC events.
    • If I were running a financial institution right now, I’d focus on the word integration instead of innovation.
    • Culture is one of the best things a bank has going for it. It’s also one of the worst.

    _ _ _

    While I am bullish on the future of banking as a concept, I am admittedly concerned about what’s to come for many banks who struggle with cultural mindsets resistant to change. As I shared in an op-ed that kicked off last week’s FinTech Week NYC, the same dynamics that helped weather the last few years’ regulatory challenges and anemic economic growth may now prevent adoption of strategically important, but operationally risky, relationships with financial technology companies.

    Most banks don’t have business models designed to adapt and respond to rapid change. So how should they think about innovation? I raised that question (and many others) at last Wednesday’s annual FinXTech Summit that we hosted at Nasdaq’s MarketSite. Those in attendance included banks both large and small, as well as numerous financial technology companies — all united around an interest in how technology continues to change the nature of banking.

    More so than any regulatory cost or compliance burden, I sense that the organizational design and cultural expectations at many banks present a major obstacle to future growth through technology. While I am buoyed by the idea that smaller, nimble banks can compete with the largest institutions, that concept of agility is inherently foreign to most legacy players.

    It doesn’t have to be.

    Indeed, Richard Davis, the chairman and CEO of the fifth largest bank in the country, U.S. Bancorp, shared at our Acquire or Be Acquired Conference in Phoenix last January that banks can and should partner with fintech companies on opportunities outside of traditional banking while working together to create better products, better customer service and better recognition of customer needs.

    The urgency to adapt and evolve should be evident by now. The very nature of financial services has undergone a major change in recent years, driven in part by digital transformation taking place outside banking. Most banks—big and small—boast legacy investments. They have people doing things on multi-year plans, where the DNA of the bank and culture does not empower change in truly meaningful ways. For some, it may prove far better to avoid major change and build a career on the status quo then to explore the what-if scenarios.

    Here, I suggest paying attention to stories like those shared by our Editor-in-Chief Jack Milligan, who just wrote about PNC Financial Services Group in our current issue of Bank Director magazine. As his profile of Bill Demchak reveals, it is possible to be a conservative banker who wants to revolutionize how a company does business. But morphing from a low-risk bank during a time of profound change requires more than just executive courage. It takes enormous smarts to figure out how to move a large, complex organization that has always done everything one way, to one that evolves quickly.

    Of course, it’s not just technological innovation where culture can be a roadblock. Indeed, culture is a long-standing impediment to a successful bank M&A deal, as any experienced banker knows. So, just as in M&A deals, I’d suggest setting a tone at the top for digital transformation.  Here are three seemingly simple questions I suggest asking in an executive team meeting:

    • Do you know what problems you’re trying to solve?
    • What areas are most important to profit and near-term growth?
    • Which customer segments are critical for your bank?

    From here, it might be easy to create a strategic direction to improve efficiency and bolster growth in the years ahead. But be prepared for false starts, fruitless detours and yes, stretches of inactivity. As Fifth Third Bank CEO Greg Carmichael recently shared in an issue of Bank Director magazine, “Not every problem needs to be solved with technology… But when technology is a solution, what technology do you select? Is it cost efficient? How do you get it in as quickly as possible? You have to maintain it going forward, and hold management accountable for the business outcomes that result if the technology is deployed correctly.”

    Be aware that technology companies move at a different speed, and it’s imperative that you are nimble enough to change, and change again, as marketplace demands may be different in the future. Let your team know that you are comfortable taking on certain kinds of risk and will handle them correctly. Some aspects of your business may be harmed by new technology, and you will have to make difficult trade-offs. Just as in M&A, I see this is an opportunity to engage with regulators. Seek out your primary regulator and share what you’re looking for and help regulators craft an appropriate standard for dealing with fintech companies.

    Culture should not be mistaken for a destination. If you know that change is here, digital is the expectation and you’re not where you want to be, don’t ignore the cultural roadblocks. Address them.

    A Technology Takeover on BankDirector.com

    For the next 5 days, I set up shop in my former home of New York City for FinTech Week NYC.  Hosted by Bank Director’s FinXTech in conjunction with Empire Startups, the week can best be understood as a confluence of conferences, round-table discussions, demo days, meetups and networking events across the city.

    If you’re not familiar with the various events taking place, here is a quick snapshot of three we’re primarily involved with starting today and running through Friday, the 28th.

    The common thread throughout each of these days? A desire to help leaders in the financial sector to better understand how when/where/why to engage with emerging technologies.

    Given our cultural mindset to help make others successful, we’re kicking things up a notch with our on-line efforts.  Indeed, we’re “taking over” BankDirector.com and loading the site up with strategic issues and ideas that a bank’s CEO, board and executive team can immediately consider.  In parallel, we’re developing even more content to benefit technology companies keen to work with financial institutions and have some really interesting things planned for our FinXTech.com.  Three examples of this free content:

    • On BankDirector.com, Tips for Working With Fintech Companies by our editor, Naomi Snyder, provides insight from executives at Wells Fargo (one of the country’s biggest) and Radius Bank (a very strong community bank) on how they handle fintech partnerships.
    • On FinXTech.com, Advice for Fintech Companies Working with Banks by our editor-in-chief, Jack Milligan, shares suggestions from SF-based Plaid Technologies and Chicago-based Akouba as to how banks and tech companies can set realistic expectations in terms of cooperating to their mutual benefits.
    • Finally, I authored a piece on a major challenge I see confronting banks when it comes to their digital futures with A Roadblock That Ruins Futures.  As an optimist, things aren’t hopeless; you will see I find inspiration from the CEOs of U.S. Bancorp, PNC and Fifth Third.

    10 Banks and Fintechs Doing it Right

    In advance of April’s FinXtech Summit
    By Al Dominick, CEO of DirectorCorps (parent co. to Bank Director & FinXTech) | @aldominick

    Quickly:

    • An increasing number of financial institutions are using partnerships with technology companies to improve operations and better meet customer needs.
    • For the past few months, banks and/or fintechs submitted case studies on specific technology solutions helping financial institutions produce real, quantifiable results to our team at FinXTech.
    • With more then 100 submissions in hand, a committee of FinXTech advisors worked with our team to compile a top-10 list during Bank Director’s Acquire or Be Acquired Conference in Arizona last week.

    _ _ _

    Throughout Bank Director’s annual Acquire or Be Acquired conference, I found myself in quite a few conversations about the continually changing nature of financial services. Many of these discussions revolved around the possibilities generated by traditional institutions partnering with emerging technology firms.  Some of these took place on-stage; for instance, I opened the second full day of the conference by polling an audience of 900+ on a variety of technology-related issues:

    screen-shot-2017-02-08-at-5-06-44-pm

    With results like these precipitating editorial coverage from our team and attendees alike, you’ll probably understand why I find the just-released ten finalists for our “Best of FinXTech Awards” so compelling.  Indeed, as the financial landscape continues to evolve, and executives grapple with a fast-changing operating environment that requires partnerships and collaboration, each of these relationships shows what is really possible when leaders explore something new together.

    • Bank of Nova Scotia (Scotiabank) + Sensibill: Scotiabank’s customers can store, organize and retrieve paper and electronic receipts through the Toronto, Canada bank’s mobile banking app and wallet, the result of a partnership with Sensibill, also based in Toronto. The service was launched in October 2016.
    • Franklin Synergy Bank + Built Technologies, Inc.: Built Technologies, in Nashville, Tennessee, improved the loan administration process for Franklin Synergy Bank, in Franklin, Tennessee. The $3 billion asset bank now manages a greater number of construction loans with fewer staff.
    • Green Dot (Go Bank) + Uber: Pasadena, California-based Green Dot Corp., which issues prepaid credit cards, partnered with Uber to provide the San Francisco transportation company’s drivers a fee-free debit card and an instant pay solution that allows drivers to be paid instantly.
    • IDFC Bank + TATA Consultancy Services (TCS): Due to a regulatory mandate, India’s IDFC Bank had just 18 months to expand into rural areas to better serve unbanked customers. The bank’s partnership with TCS, based in Mumbai, India, included the use of micro ATMs, which are modified point-of-sale terminals that expand the bank’s reach in rural areas.
    • National Bank of Kansas City + Roostify: San Francisco-based Roostify improved National Bank of Kansas City’s formerly inefficient and incomplete digital mortgage application process. Customers at the bank, based in Overland Park, Kansas with more than $600 million in assets, can now fill out a mortgage application in a little as 20 minutes, with no need for a phone call or trip to the branch to visit a loan officer.
    • Somerset Trust Company + BOLTS Technologies: BOLTS, based in Bethlehem, Pennsylvania, improved the account opening process at Somerset Trust Company, saving the $1 billion asset community bank in Somerset, Pennsylvania, roughly $200,000 in the first year by better automating the process and reducing error rates. Customers can start and complete the process on multiple channels.
    • Toronto-Dominion Bank (TD Bank) + Moven: TD Bank, based in Toronto, Canada, launched a real-time money management application in April 2016, developed by Moven in New York.
    • USAA + Nuance: USAA, based in San Antonio, Texas, made its website a little smarter in 2016 with the virtual assistant Nina, which provides support for USAA’s members. This use of artificial intelligence is the result of a collaboration with Nuance in Burlington, Massachusetts.
    • Woodforest National Bank + PrecisionLender: Partnering with Charlotte, North Carolina-based PrecisionLender to improve its loan pricing strategy helped $4.8 billion asset Woodforest National Bank, in The Woodlands, Texas, grow commercial loans by 16 percent and gain almost 20 basis points in net interest margin.
    • WSFS Bank + LendKey: WSFS Financial Corp., headquartered in Wilmington, Delaware, with $6.6 billion in assets, partnered with the lending platform LendKey, in New York, to expand the bank’s consumer loan portfolio with a student loan and refinancing product.

    All ten of these partnerships demonstrate the strongest combination of collaboration and results.  For those interested, my colleague Kelsey Weaver (the President of our FinXTech platform) announces the three “winners” on April 26, 2017, during the FinXTech Annual Summit, at the Nasdaq MarketSite.

    mc_030116_hires-4
    Closing bell ceremony at Nasdaq / Bank Director + FinXTech’s FinTech Day (March 1, 2016)

    In advance of that announcement, I invite you to follow me on Twitter via @AlDominick, FinXTech’s President, Kelsey Weaver @KelseyWeaverFXT, @BankDirector and our @Fin_X_Tech platform and/or check out where and how this annual Summit — and these awards — fits into FinTech Week New York that we are hosting along with Empire Startups starting April 24.

    We Are On To FinTech Week

    #AOBA17 conference intel (Friday)
    By Al Dominick, CEO of Bank Director | @aldominick

    Quickly

    • The “bank of the future” is not about technology, it is all about customers.
    • For many financial institutions, the time may be right to retire legacy systems for cloud-based platforms.
    • Numerous financial technology companies are developing new strategies, practices and products that will dramatically influence the future of banking..

    _ _ _

    The intersection of technological innovation with strong depository franchises may lead to more efficient banking processes, reductions in fraud and a win/win/win for banks, financial technology firms (fintechs) and consumers.  Globally, nearly $23 billion of venture capital and growth equity has been deployed to fintechs over the past five years, and this number is growing quickly. Still, the nature and extent of impact that fintechs have on the industry remains unclear.

    Throughout this week’s Acquire or Be Acquired conference, bank CEOs talked about the continually changing nature of financial services — with fintech often front and center.  For many, collaboration between traditional institutions and emerging technology firms bodes well for their future.  Here, Bank Director’s FinXTech provides authoritative, relevant and trusted content to a hugely influential audience, specifically:

    • Fintechs who view banks as potentially valuable channels or distribution partners;
    • Banks looking to grow and/or innovate with fintech companies’ help and support; and
    • Institutional investors, venture capitalists, state & federal regulators, government officials and academicians helping to shape the future of banking.

    We designed FinXTech as a peer-to-peer resource that connects this hugely influential audience around shared areas of interest and innovation.  As a host of FinTech Week in New York City this April 24 – 28 (along with Empire Startups), we bring together senior executives from banks, technology companies and investment firms from across the U.S. to shine a light on what is really generating top line growth and bottom line profits through partnerships, collaboration and investments.

    bank-slide-05

    Given the changing nature of banking today, this week-long event in New York City looks at the various issues impacting banks, non-banks and technology companies alike.  So as we move towards FinTech Week in New York City, I invite you to follow me on Twitter via @AlDominick, FinXTech’s President, Kelsey Weaver @KelseyWeaverFXT@BankDirector and our @Fin_X_Tech platform and/or check out the FinTech Week New York website for more.

    A New Research Report on Marketplace Lending

    #AOBA17 conference intel (Wednesday)
    By Al Dominick, CEO of Bank Director | @aldominick

    Quickly:

    • Lending is an estimated $15 trillion industry in the United States — and the banking industry’s share in this market is estimated to be around $6.6 trillion (~ 44% of the overall market).
    • Within the FinTech sector, lending is the largest segment in terms of funding from investors, and market altered the lending landscape.
    • Marketplace lenders — online platforms that match borrowers with lenders — will likely see some consolidation in ’17 and continue to converge with banks through partnerships, white label contracting and yes, even mergers.

    _ _ _

    Fintech lending has grown from $12 billion in 2014 to $23.2 billion in 2015 and is expected to reach $36.7 billion in 2016, a year-over-year growth of 93 percent and 58 percent in 2015 and 2016.  This market, according to Morgan Stanley Research, is expected to grow further and reach $122 billion by 2020.

    As noted throughout our Acquire or Be Acquired conference, partnerships between a bank and a tech company can take on many forms — largely based on an institution’s available capital, risk appetite and lending goals.  With FinTech solutions gaining momentum, many advisors here have encouraged banks to look at viable alternatives to meet consumer demands, maintain and expand their lending revenue and give formidable competition to those looking to take that marketshare.

    With this in mind, I invite you to take a look at a new Fintech Intelligence Report on Marketplace Lending (to download the PDF version, click: fintech-intelligence-report-lending).  The research paper, developed by Bank Director’s FinXTech platform and MEDICI, a subscription-based offering from LetsTalkPayments.com, explores current market dynamics along with technology & partnership models.  As noted in this report, the gains of new FinTech companies were widely thought to be at the expense of banks; however, many banks recognized the potential value from collaboration and built relationships with FinTechs.

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    While our Acquire or Be Acquired conference wrapped up yesterday, you can take a look back on the conversations + presentations that found their way onto Twitter via @AlDominick, the host company, @BankDirector and our @Fin_X_Tech platform, and search #AOBA17 to see what was shared with (and by) our attendees.

    3 Sources of Inspiration for Financial Services Executives

    “We keep moving forward, opening new doors, and doing new things, because we’re curious and curiosity keeps leading us down new paths.”  -Walt Disney

    Some days just seem to move faster then others.  Fortunately, I found myself on a few airplanes this week without wifi (yes, no wifi!).  What a treat to find a few hours of electronic-interruption free time to catch up on overdue reading.  As I flipped through our soon-to-be-released issue of Bank Director magazine, I took note of a number of issues and trends that I intend to dive deeper into this weekend.  I also pulled up PDFs of articles I’d seen — but had not had a chance to read — that relate to our fast-approaching Acquire or Be Acquired Conference.  Finally, I jotted down a few thoughts on the types of information that I find compelling — notes that inspired this morning’s post.

    You see, I really love connecting people with each other… and sharing ideas and insight that I find compelling.  Oftentimes, this takes place in person; however, opportunity exists to do so in digital format.  So if you’re curious about what’s happening in the banking space, let me point you towards these three sources of inspiration:

    • Most Saturday mornings, for me, involve a healthy dose of wit + wisdom from Gregg Schoenberg vis-a-vis The Financial Revolutionist. Powered by Wescott Capital, I appreciate how this weekly newsletter provides sharp and distinctive commentary on financial innovation trends.
    • For those that favor a podcast, take a listen to The Purposeful Banker (backed by PrecisionLender).  Over the past few years, they have assembled a strong library of perspectives relevant to how banks might better perform given various technologies available.
    • Finally, many know of Chris Skinner as an author and independent commentator on the financial markets.  His blog, the Finanser.com, is one I consider a must-read.

    As a bonus, Deloitte expects banks to deepen their engagement with the fintech ecosystem as the trend towards digitization accelerates — a theme you’ll recognize if you’ve been on Bank Director’s FinXTech.com*.  The full report from the consultancy can be found here.

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    *As the financial landscape continues to evolve, and executives grapple with a fast-changing operating environment that requires partnerships and collaboration, I am so impressed by the exceptionally astute group of men and women that are helping to shape the future of finance through their day-to-day jobs + as part of FinXTech’s Advisory Group.  FWIW, both Gregg and Chris are members.