CHAIRMAN’S C O LU M N
Embracing Fintech
Opportunities Jim Cargill
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Chairman
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Arkansas Bankers Association
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hen the fintech boom began about a decade ago, the prediction was that these startups might have been sounding the death knell for traditional banks.
While a few of those fintech companies did appear to have that goal in mind, what has emerged is a clear need for innovation on the traditional banking side and a clear opportunity for collaborations that would leverage the best of both worlds and lead to powerful partnerships. Banks have a broad base of loyal customers with long-standing relationships. Banks have earned trust by investing in local communities, but consumer preferences are evolving as technological advances impact everything from shopping to entertainment to banking. So, while customers largely trust and rely on community banks, they also yearn for the digital capabilities that fintechs can offer. I think most banks realize the most valuable assets of any organization are its people. Partnerships between banks and fintechs grant access to the other’s expert staff without the expense of hiring more people. This is a universally shared benefit. However, there are benefits that favor one entity more than the other. For banks, the top benefits include: • Access to tech talent that can otherwise be difficult to recruit and retain • The ability to offer digital banking features to customers quickly • Lowered capital expenditures • Enhanced brand reputation • Increased access to younger customers 4
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FALL 2021
“I think most banks realize the most valuable assets of any organization are its people. Partnerships between banks and fintechs grant access to the other’s expert staff without the expense of hiring more people.” For fintechs, the top benefits include: • Exposure to the large number of bank customers • The ability to scale quickly to reach new markets and customer segments where banks already operate • Access to the deep knowledge of banking partners and their experience navigating the complex regulatory environment of the industry Many community banks gain access to fintech talent and solutions indirectly through their core processing partners. Others entertain multiple fintech presentations and opportunities in order to partner directly with those who can offer the solutions most needed. Regardless of the journey, the result is that banks are making rapid advancements in meeting their customers’ desire for digital banking conveniences and this is one way that
we will continue to be the most preferred and trusted providers of financial services. Through the ABA’s Endorsed Vendor Program, we all have access to the resources and expertise we need to adapt to the rapidly changing landscape of digital transformation and consumer behaviors and preferences. Whether it’s embracing interactive teller machines as a lower-cost, convenient way to offer face-to-face service, feature-rich mobile banking apps, digital delivery of mortgage loans, or advanced online treasury management capabilities, all of us in the “traditional” banking field need to understand that rapid change is happening. Instead of being worried about how fintechs might disrupt our industry, we need to embrace how we can work together with them to succeed in the new digital age. Being prepared and having strong partnerships will insure the long-term viability for us all.
