Open Banking vs Community Banks

The ICBA (The Independent Community Bankers of America®) generally attracts a large following from smaller banks around america as there are multiple banks for each state. These banks are called community banks and are generally quite s bit smaller. These community banks have various digital needs. The ICBA is the ultimate gathering for community bankers who are serious about dialing into high-tempo networking and learning. It is also the ideal space for us to exhibit our Futurebank product as community banks can benefit greatly from Open Banking.

Community banks can meet digital banking needs with Open Banking APIs

To compete with large national banks and maintain a competitive advantage, community banks need to collaborate with fintech partners who can help integrate new technologies that result in more efficiency, more profitability, and secure transactions. All this while making the banking institution attractive to younger generations of customers who expect flawless, easy-to-use, convenient access to banking and payment services.

The way that banking customers are choosing to bank is changing faster than any other component of financial services. This is due to digital transformation and growing customer demands. The increasing consumer demands is influenced by the customers’ experiences in other industries too – putting pressure on smaller banks to change for the better. What is clear is what has worked in the past will not work in the future.

The Digital Opportunity. What is Your Strategy?

Digital is the new norm in banking – it’s not just about digital payments, it’s digital everything. Today, banks of all sizes need a proactive, cohesive digital strategy that provides the right products, services, and best possible customer experience. Why is a digital strategy so important? For one, Boomers are aging and as a group their numbers are on the decline although they will continue to be the wealthiest generation in the country until at least 2030, according to Deloitte.

They are also set in their ways with whom they bank and how they bank. Next, the massive growth opportunity for community banks is with Millennials and Gen Z. Accenture projects Millennials to make up as much as 40% of U.S. consumers by 2020 and today are the largest generational demographic group in the history of the United States.

Open Access Banking is Key for community bank

According to the FIS 2018 PACE survey, It has been shown that people who make use of community banks also utilize mobile applications more than any other type of banker. A large 53% of them claim to use mobile apps more now than 2017. The growth of mobile app usage is continuously increasing.

Consumers are doing more “core” business on financial mobile apps, such as making investments, applying for loans and even opening new accounts. This will only continue as open access banking makes its way into the mainstream and Open Banking is embraced.

Open Banking is an opportunity for community banks to engage the right tech partners and create a win-win situation that expands usage of and loyalty to their services. The 2018 PACE findings say,” this might be one of the best and most agile approaches for banks to add the ancillary products and services their customers want.”

Community Banks in Great Shape to Capitalize on New Technology

Community banks continue to grow and prosper every year. The 2018 PACE Study says that 8 in 10 customers are satisfied or very satisfied with their community bank provider. This means that the customer base is loyal and is not eager to opt out of using their bank anytime soon. However, this also assumes that the bank is keeping pace with technology and offering the digital products and services customers have come to expect.

Customers will move to another banking provider if their digital needs are not being satisfactorily met. Mobile is viewed as the main branch by many consumers. All generations except baby boomers (and older) bank on their phones and tablets more than via desktop PCs, ATMs or physical branches. In addition, PACE says that “feature parity is here. Community banks that introduce features like P2P payments see rapid adoption, and it has never been cheaper or easier to add national bank digital capabilities.”

How FutureBank can benefit community banking?

An Open Banking environment can improve the overall customer experience and third-party partnerships can also become a source of competitive advantage. It can also make the banking process easier for those who have multiple accounts in different banks. Aggregating all those banking operations into one simple application is the best solution for community bankers.

FutureBank is a secure and customizable Mobile and Internet Banking solution with an Open Microservices API that integrates with the most popular Core Banking systems in the world. It will allow each community bank greater flexibility and scalability. We also provide an architectural blueprint and code framework which makes FutureBank the perfect solution for any new FinTech product.

Come visit our booth at the ICBA in Nashville from the 18th of March till the 22nd. We will be exhibiting our FutureBank product. For more on FutureBank, visit getfuturebank.com

References:

Getfuturebank.com. (2019). FutureBank Platform – Secure. Compliant. Simple. Flexible.. [online] Available at: https://getfuturebank.com/ [Accessed 8 Mar. 2019].

Icba.org. (2019). 2019 ICBA Convention. [online] Available at: https://www.icba.org/events/2019-icba-live-convention [Accessed 8 Mar. 2019].

Johnson, J. (2018). Community banks can meet digital banking needs with open banking APIs. [online] RISE with FIS. Available at: https://www.risewithfis.com/Community-banks-can-meet-digital-banking [Accessed 8 Mar. 2019].