A recent presentation by a director at a well-known investment bank has raised some important questions for community bankers. The presentation suggested conventional banks had better pay attention to the swarm of FinTech companies that are targeting some of their traditional product sectors like small business and debt consolidation loans.
There are two trends today that bear watching by every bank board, beginning with the emergence of financial technology companies in both the payments and lending spaces. The FinTech upstarts do business with their customers almost exclusively through a technical interface. There is no warm and fuzzy, face-to-face human interaction. Today, good customer service is as likely to be defined by smoothly functioning technology as by a smiling face. The second trend is the entry of millennials into the economy. They are digital natives who grew up with technology and are quite comfortable with it to the point they may have a preference for digital over branches.
These two trends have the potential to greatly impact the banking industry. Learning how to market to millennials today by focusing on their financial needs and studying the FinTech companies to see how community banks can adopt their technological advancements is a great way to prepare for a future that is quickly arriving.
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