Looking Outside the Financial Industry

Those within the banking industry are instructed and even rewarded for working with laser-like focus. But this can feel like wearing blinders; like there’s no real outlook for what’s going on in the surrounding world.

What happens when banks and credit unions stop, take stock, and look outside the industry?

Bryan Clagett shared what it means to gain a little outside perspective. Bryan is a strategic leader in the industry, and he most recently drove Geezeo's marketing efforts as their Chief Marketing Officer and investor, helping to sell the company to Jack Henry & Associates in July 2019. 

Since then Bryan has taken up advisory roles at ChannelNet, BLIP, and Nymbus, in addition to running BadAss Banking on a Mission to help banks, credit unions and fintech brands create a better financial services experience for both consumers and business. He is currently the Chief Revenue Officer at Moven.

And his take?

See what’s going on outside the banking world. 

Reflecting on 2020

The beginning of the COVID-19 pandemic threw the entire world into an experiment no one intended to conduct.

And in the banking world?

People were panicked. There was a widespread fear not just the devastating effects of the disease, but also fear of economic collapse. 

Unquestionably, things have been hard for millions of Americans over the last year and a half. But many of the people who were working within banks, credit unions, and FinTechs were worried that not having a physical presence was going to be the end of their businesses. 

Instead, the concept of working from home has gone incredibly well.

As Bryan said, “I think some organizations are stronger because of it even culturally. I think there's been a remarkable amount of productivity that's come out of some of these financial institutions.”

What the banking community found is that this preexisting fear of technology was for naught; implementing technology was actually pretty simple.

“And the bankers are realizing they don't have to have the same physical attributes they always had. They actually can survive in a digital world.”

While industry professionals are spending less time in airports and on the road meeting face-to-face, this also equates to less downtime and less travel time. Some folks find that they are even more productive than they were before. This, however, presents some new challenges according to Bryan:

“The harder challenge is how to make those interactions quality-oriented, right? It's not just a quantity issue, but if you're a sales guy, sometimes your success is measured on your visibility out in the market and how many prospects you're actually visiting, that's really not a good metric necessarily. It's the quality of the engagement that counts and ultimately, the impact that you have, meaning, ‘Are you driving sales?’”

Financial change-makers can’t necessarily meet over a round of golf just yet, but they can make connections digitally; there can be a shift to a much more efficient way of doing things, but it takes a different mindset and a different operational model.

It means looking for new opportunities that might not have ever been considered before.

And truthfully?

Maybe it’s time to let go of spending four or five hours on the golf course, where one can only really interact with a handful of other people.

Perhaps there’s a way for work to have even more impact on more people moving beyond the fear of limitation shared by the financial world at the onset of the  COVID-19 pandemic.

Staying Relevant in 2021 and Beyond

This idea of finding new, meaningful ways to connect with others all links back to the idea of engagement banking. 

How does the financial service industry stay highly contextual and highly relevant? 

Bryan shared that no matter the format, this is the way to make lasting connections. “Whether you have a physical or a digital experience, as long as you're contextual and relevant, it will be a meaningful engagement.”

He continued. “That is what will drive the success of financial services. It's not whether or not you've got a new bank sign out in front of your branch, it's not whether you've got a large market presence, which is often defined by not just your market itself, but the number of locations in a market. If you're actually out there leveraging data and building experiences that are meaningful, you're going to succeed.” 

Banks and credit unions are learning new tricks. They aren’t looking for traditional new hires anymore. Instead, they are hiring digital natives, people who understand engagement from a much more holistic point of view. Because of this digital shift, Bryan explained, “There's a cultural impact or evolution that might be occurring in light of COVID, or it could just simply be because technology is advancing so quickly.”

Whatever the reason, the idea of attracting, recruiting, and retaining talent for digital growth, means that hires are coming from new places; they’re coming from outside the traditional reach of the industry to gain a different, more proactive perspective. 

And speaking of new perspectives, banks are starting to embrace new perspectives and even new forms of currency: cryptocurrency and Bitcoin. 

Some non-traditional financial banks like MassMutual and Prudential are planning to potentially start offering Bitcoin.

What’s more?

The number one firm searched on Charles Schwab's website last week was Bitcoin. Even with a volatile currency like Bitcoin, things are really starting to take off. 

While it’s undoubtedly the younger generations that are looking into cryptocurrency, there’s cause to pay attention. As Bryan shared, “There's going to be a lot that happens in a short period of time.” And the industry, which has relied on commodities for far too long, may be in for a rude awakening. 

Especially in a zero-interest rate market, bankers have to find new ways to make a profit. The financial services industry will continue to search for ways to become more efficient and deliver products in a better, more meaningful way. This means new income streams and new revenue streams. 

Finding a Way Past Traditional Viewpoints

Considering new revenue streams in the financial services world raises a lot of questions.

Does the future lie with services like financial coaching? Subscription-based models or apps that might work well for a FinTech brand? 

The key here is finding a way to create longer-term value for consumers. And now is the time to discover ways to accomplish this, then spring into action.

How can banks and financial institutions do this?

Bryan answered, “I think the first thing is to look outside the industry, don't rely upon just your trade associations to educate you.”

He went on to hypothesize that financial health is going to take a more prominent role than ever before, which may lead to an increased financial health regulatory environment.

And while this may not stifle the ability for banks to advocate the way they might like, it will create new opportunities for financial institutions to distinguish themselves from their competition, even during an uptick in regulatory challenges. 

Now is the perfect time to look past a traditional banking model and consider collaborating with FinTech as a service platform; now is the time for the worlds of FinTech and FinServ to collide: 

“With all the evolving opportunities that exist with BaaS—banking as a service, APIs, the open banking movement that we're in, there are many opportunities for banks to really diversify the products and services that they offer.”

Now is the time to take action; to find new, relevant products and services to bring to market—ones that can help financial institutions turn a profit. 

One traditional viewpoint that needs to fall by the wayside? That the FinTech industry is in direct competition with FinServ.

FinTech is not a threat to banks and credit unions. It’s an opportunity to find meaningful, relevant services. Bryan explained. “I think we're victims in the industry of a commoditization mindset. If we view banking as a commodity, what inspires us to be different? Right? We tend to look within our own industry inspiration. That's a mistake.”

It’s about going back to zero, starting over, and looking past industry expectations and limitations to find the new opportunities that are available. In this way, financial brand leaders can break free from the past, deal with change in the present moment, and eliminate some of the widespread industry fears that might be holding them back. 

But it all starts with gaining a fresh, new, outside perspective. And it requires starting from the ground level.

Embracing Risk and Making Change

Does going back to the drawing board or working from a new perspective to implement new, innovative tools and processes include some element of risk?

Yes.

But without risk tolerance, there’s no room for growth. Financial leaders need the latitude to try new things. It may take meeting with leadership to get them to understand the importance of risk tolerance. It’s about taking a proactive stance, which is bigger than just boosting loan promotion or selling more commodities. 

Shaking things up comes with an element of risk. But it also means taking a proactive stance and meeting and engaging with customers where they are. It means banking with purpose. When financial leaders stop, take stock, and look at what’s going on beyond just the financial services industry, it becomes easier to find meaningful change. To see the forest through the trees and discover the bigger picture.