Why Bankers Should Be Thankful

This Thanksgiving bankers should be thankful for the many customers they have and serve.  85% of consumers and nearly all small business are a blessing to financial institutions, even though some think the majority are unprofitable.  Non banks know the value of these customers, and they are working hard to win them even if some FIs think they are of low value.  But non banks must work hard to win sign ups online, and envy the existing customer relationships and contacts financial institutions have.

But their envy is driving their aggressive marketing and growth.  Retail bankers should fear their powerful digital strategy and disruptive business models.  While the CFPB plans changes to the key revenue source of retail and small business banking, overdraft fees, the real challenge to bank revenues are innovative alternatives rapidly being introduced.  We have shown the large list of digital lending innovators earlier in this blog, but the week before Thanksgiving we have two new powerful entrants.  PayPal founders are starting Affirm, a consumer based lending service for online and in-store purchases, and Mirador is targeting FI small business lending.

New Digital Lenders Targeting FI Customers

So while being thankful for your customer relationships, recognize they will go away if you do not show your appreciation with innovation.  As part of your thankfulness, you can also be thankful that you have solutions like PaySound^® to fight back effectively the new digital competitors.