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.
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