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A convergence of financial and market components presents group banks with new alternatives for innovation and progress as they appear to the brand new 12 months.
By Charles Potts, ICBA
The fintech panorama is shifting. Investments in new firms have slowed, valuations that some early-stage firms commanded final 12 months are ratcheting again, and monetary know-how suppliers are tightening their proverbial belts. Whereas difficult for some, this convergence of financial and market components presents group banks with new alternatives for innovation and progress as they appear to the brand new 12 months.
With group banks finalizing 2023 budgets, now is a superb time to reevaluate present enterprise partnerships and contemplate whether or not partnering with extra or completely different fintech suppliers would higher meet the financial institution’s and clients’ wants.
For group banks which have but to begin evaluating digital options and suppliers, now could be the time to behave. Present market shifts have created a purchaser’s market, placing group banks in a good place to renegotiate contractual phrases and turn out to be extra selective of their supplier selections.
As group banks leverage these market benefits, they need to contemplate partnering with suppliers that bundle their companies and options to satisfy clients’ calls for. For the previous few years, fintechs have labored to handle particular challenges or niches, making a siloed method that resulted in a number of resolution suppliers and platforms, creating pointless friction for group banks and their clients.
In response, group banks, like $779 million-asset Lead Financial institution in Kansas Metropolis, Mo., have begun investing in fintech suppliers that may arm them with the capabilities to bundle their companies and streamline processes. We see this similar development taking part in out in bigger monetary establishments as properly. Earlier this 12 months, Financial institution of America introduced its new tremendous app, which facilitates bundling a number of options underneath one umbrella.
On this time of financial uncertainty, group banks even have a chance to remind their clients of their presence, worth and stability. By way of partnerships with strong resolution suppliers and a eager deal with attending to clients’ wishes, group banks cannot solely improve buyer loyalty however carry new clients into the fold.
Digital banking options stay a main focus for ICBA, mirrored in initiatives resembling our famend ThinkTECH Accelerator program, which we’re bringing in-house in 2023. We’re excited to take the following step on this journey to construct extra complete programming geared toward additional addressing the rising wants of group banks and the purchasers they serve.
Think about the chances and embrace the alternatives earlier than you. Seize the second to discover innovation.
Charles Potts (charles.potts@icba.org) is ICBA govt vp and chief innovation officer