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Dispatches from the Community Bank Conference: There’s Disruption, and Then There’s Fear

Theodore Iacobuzio |

Interesting time at the American Bankers Association Community Bankers Conference: the presenters are all talking about innovation, while the attendees are all talking about regulation, and not in a good way.

That’s a bit of an exaggeration, because the ABA has done a very good job of including regulatory sessions of some substance among other Conference events. In fact, one Iowa banker told your agent at lunch yesterday that he walked out of one such session with “the crap scared out of me,” though that was perhaps not the ABA’s intention.

Community bankers here in Orlando are not shy about admitting that they’re feeling a bit under it. On one side they say they’re undergoing a whole new level of regulatory scrutiny; on the other they say they feel they may not be able to keep pace with technology—especially mobile—they’re hearing so much about.

That made the presentation of Fred Brothers, EVP of strategic innovation at third-party processor FIS Global, especially interesting. He listed the six new financial trends that could change the face of banking and payments:

1)      Mobile everything

2)      The convergence of physical and digital channels (showrooming, e.g.)

3)      Rewards and loyalty as competitive necessities (with special emphasis on merchant-funded rewards)

4)      Data as the new normal for relationship banking

5)      Embracing the underbanked

6)      Mobile as the enabler for community banks to re-enter the consumer lending, payments and merchant acquiring businesses

The last was especially interesting, since, as noted, it ran counter to what many bankers would tell you over coffee or lunch—that they feel simply outgunned in technology by the big banks. But think about it: just a couple of Brothers’ examples – (3) and (6), merchant-funded rewards, and devices like mobile point of sale card readers from Square, iZettle, and Intuit -  don’t need big bank muscle to work. Community banks may have an opportunity, if not an edge, after all.

Topics: Payments Strategy

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