Evidently there is an evolving small banking industry in the 21st century due to regulatory pressure and increased competition with fintech companies. According to Rene Lacerte from the American Banker “For all the attention fintech has garnered, it still has a long way to go before it breaks through in winning over key customer segments, such as business banking customers.” What Rene Lacerte means by that is that the banks still have the advantage in a variety of ways which include the fact banks have been around for a long time and are the structural backbone of every economy. Other benefits small banking has over the fintech industry is that they have bigger budgets to meet consumer expectations by having a larger customer service infrastructure and sales force to drive their profitability. Along with their larger teams they have the upper hand over small fintech companies because they have tons of data and history of financial transactions from their customers.
One of the main concerns of the small banking industry includes providing the most optimal and advanced tools to maintain their customer base. Customers choose to seek out regional banks due to their changing expectations and behaviors towards newer technologies. Customers are dissatisfied with the application process and the time required to obtain a loan or mortgage when they can just walk down the street to a fintech company or a large bank and become fully approved within a couple of weeks. National banks have way more vast budgets that can provide these newer technologies and abide by regulations. This change in consumer behavior, regulatory pressures and increased competition to keep small banks alive is why Zikher has been founded and created. Regional and community banks need to address shifting consumer tastes because not everyone has the time to go and visit a bank branch. According to CNBC.com “ The 2016 Millennial Money Mindset Report, released iQuantifi earlier this year , reported that nearly 42 percent of millennials want to manage their bank relationship exclusively online.” This is a wake up call to the financial industry to utilize digital platforms and to go further than just online banking. Meaning the time has come for a paperless online process that follows regulations and ensures efficiency in mortgage and loan processes.
Author: Megan Gospe
Lacerte, Rene. “Banks vs. Fintech? No Contest, Banks Win.” American Banker. American Banker, 8 Jan. 2016. Web. 17 Nov. 2016.
Marino, John. “Small Banks Looking to Muscle in on Fintech World.” CNBC. CNBC, 24 Mar. 2016. Web. 18 Nov. 2016.