As a new wave of born-online fintechs reshapes financial services into an industry defined by technology, traditional banks and credit unions are struggling to keep up.
According to an analysis by The Financial Brand, only about 46 percent of banks are “leaders” or “fast followers” when it comes to digital transformation. Meanwhile, small banks and credit unions are fighting a two-front battle against both nimble fintechs and deep-pocketed bank incumbents that have far more resources with which to develop artificial intelligence projects, build online customer experiences and experiment with new digital payment methods.
What’s needed are dedicated leadership, proper investments and a well-defined scope if banks and credit unions are to thrive in the long term.
“Companies we’ve seen emerge over the past five to ten years such as Lunar, UNDO and Robin Hood do not rely on legacy systems but are fully digital-driven,” Jacob Quorp Matthiesen, managing director of Nodes, a European design agency that works in the financial services industry, writes in a company blog post. Matthiesen writes that banks’ competitors “can utilize the data much more efficiently than many of the traditional banks.”
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Banks Are Accelerating Digital Transformation
The global pandemic that forced businesses worldwide to shut their doors this year has presented banks with a new challenge: How can they accelerate their digital transformation projects to deliver unique online experiences to their customers, even as many of their own employees — in a major culture shift for banks — are working remotely? In the United States, banks have had to manage all that while also administering trillions of dollars in emergency loans for businesses through the federal government’s Paycheck Protection Program.
It is against this backdrop that the annual MoneyFest conference arrives on Oct. 26. MoneyFest, a large event sponsored by Money20/20, an industry organization, will run virtually through Oct. 29, with dozens of speakers and 15 deep-dive panels on topics vital to banks, fintechs and others in the financial services world.
MoneyFest To Cover Crisis Management, Payment Tech Trends
Highlights of the event, which is free this year due to its virtual format, include:
Managing through the global crisis: Speakers will delve into how financial services organizations managed through the sudden catastrophe. Carlos Torres Vila, chairman of BBVA, will discuss how his bank, one of Europe’s largest, is navigating through the challenges. Torres Vila will describe his lessons learned, describe what he’d do differently and share what excites him for 2020. Also, executives from Bank of America and Fifth Third Bank will discuss the transformative mark that the Paycheck Protection Program has left on small-business banking, as they were tasked with distributing hundreds of billions of dollars in loans in a matter of days.
Major tech trends reshaping financial services business: Speakers such as Jon Frost, a senior economist at the Bank for International Settlements, will delve into how banks can remain competitive in an era of diversified digital platforms. Cathy Bessant, Bank of America’s COO and CTO, will recount the steps her institution took on its 10-year, $35-billion digital transformation journey. Brian P. Brooks, acting U.S. comptroller of the currency, will discuss how banking is changing today as a result of the unbundling of financial services and the decentralization of financial capabilities.
How technology is affecting the way businesses and people get paid: MoneyFest will dedicate itself on Oct. 27 to trends in the payments business as faster payment options continue to come online. Experts such as Ashley Paston, a principal at Bain Capital ventures, will discuss factors shaping B2B payments in the U.S., including the intersection of software and payments and the increasing importance of Internet of Things technologies to the payment ecosystem.
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