You have to think like a banker: What is going to be this thing that I can offer that doesn’t necessarily exist—that hook to grab customers?” -Mary Wisniewski

The future of banking is now. It’s time to move beyond the bank–fintech feud and find ways to work together to provide something new to improve the customer experience. Something that is both fresh and functional. By working together, innovation can be achieved across the board.

Mary Wisniewski, Senior Editor at Bankrate, joined the Banking on Digital Growth Podcast to discuss today’s innovative banking trends and how banks can collaborate with fintechs to achieve something new to continue moving the financial industry forward. Mary is deeply in tune with the world of finance and offers a treasure trove of sage advice on the future of fintech and banking.

Banking Trends: Where They Were and Where They’re Going

It’s no secret that the financial industry is a bit slow-moving.

Many of the trends we are seeing now and will continue to see have been years in the making. Open banking, for example, is not necessarily new, but it has only recently started to gain momentum. In previous years, there was this sort of battle or feud between banks and fintechs over data and how it was accessed and shared. Banks were essentially being accused of blocking access to data, and their excuse was that they knew that they would be held liable if something went wrong. They didn’t feel that what a lot of the fintechs and digital brands were trying to do was safe.

But now, as analytics and data sharing have grown and become more popular, a lot more financial brands are considering this new way of banking. They better understand how it all works now and have seen the benefits and are thus willing to take the risks.

Older ways of obtaining data weren’t necessarily that reliable, but now, as technology and our capabilities have advanced, data sharing is much more secure. And so now, this sort of crescendo effect is happening—things have been building up to this point where we’ve hit critical mass and can really start moving things forward.

A newer trend that we are only just now starting to see take effect are the niche digital bank brands that are forming for specific communities. Instead of just generalized banking, there are now these companies that are opening up and gearing their services towards a very specific group of people.

Stretch, for example, is an early-stage startup that provides banking services for the formerly incarcerated. It’s very unique and interesting, but the more you think about it, the more you realize the genius of it because it’s actually something that is needed.

Another one is Nerve, which is a banking app for music creators. It’s built to handle the unique financial needs of songwriters, producers, DJs, instrumentalists, etc.

There are so many of these niche micro-financial brands popping up, and this is where banking is headed and what current financial brands would do well to keep an eye on. It’s all about collaborating with digital and data brands to create these very unique and specific opportunities for customers to enhance the experience and better meet their needs.

How Bank and Credit Unions Can Learn From These Trends to Propel Themselves Forward

Though this trend in banking is headed towards new brands specifically targeting niche audiences, it is not to say that existing brands need to start becoming exclusive. If you already offer services to a wide range of customers, you don’t want to backpedal and narrow down your offering to a limited group of people.

The thing that brands can take away from these trends is that it's all about focus and positioning. It’s about going into the market with more intention. As James Robert suggests, think of it like fishing. You can go out into the ocean and drag your net around, hoping that you’ll catch something along the way, and you probably will. Or, you could go to very specific fishing holes where you can guarantee you’ll catch a lot of one kind of fish. And you could just do that, but it’s better to do both.

The open ocean is still good because it offers you the potential to collect a more diverse range of fish, and you never know what you might catch—it could be something great, or it might not. That’s just how it works. But you can also use those fishing holes to bring in something very specific to fill in the gaps.

Of course, this analogy might not work for all brands. It depends on the size of the bank. But the general idea is that it’s less about banks narrowing themselves down and more about finding ways to focus their efforts that are more meaningful to the customer. Continue to provide your usual offerings but also look for new ways to grow your business and reach new customers.

General digital banking is not really a trend anymore; it’s been commoditized. Even no-fee banking, which was once a big deal, is now nothing new. These are still great things to offer, but they are starting to become the norm. So to move forward, brands need to start thinking like a banker. As Mary put it, brands need to ask themselves, “What is going to be this thing that I can offer that doesn’t necessarily exist?”

Brands should still offer all of the normal, standard things, but they also need to start brainstorming and focusing on ways to position themselves in the market to offer something new. It needs to be something that will hook and grab your customers. If you are generally good at getting your brand’s name out there, you can also start to offer solutions to particular problems so you can start capturing new audiences to help you grow.

The Power of Collaboration

One way to detach from the old and start thinking of the new is to start looking into open banking or collaborating with fintechs to create new opportunities.

The more access to data a brand has the more options they have at their fingertips. And using an app that pulls in or shares data with digital brands or even other banks and fintechs is one way to go about this.

Going forward, some of the biggest and brightest ideas and opportunities can come from banks and fintechs working together. The banker and the fintech mindset are different, and while this sometimes leads to clashing and friction, it’s also what can help financial brands propel themselves forward. If you’re stuck in an old way of thinking, you’re not going to be able to come up with these great ideas and experience growth.

But, if banks and fintechs can learn to work together, their two differing viewpoints can complement one another.

There are still so many opportunities to explore. Even though digital banking isn’t necessarily new anymore, there are new ways that it can be used to benefit the customer. There are still plenty of people out there that don’t have what they need, and if banks and fintechs put their brains together, they could come up with newer and better solutions to solve these problems.

Take Stretch for example again. They are providing their customers (the previously incarcerated) with job leads from companies that will hire people with criminal records. And that is their hook. It’s not just banking services; it’s also a service that provides a solution to a very specific problem for a specific group of people.

Financial brands need to start thinking like that.

What hasn’t been done? How can it be done? How can we put our name on a new corner of the market that’s never been seen or done before?

Banks need to ask these questions and consider working with fintechs to help come up with a solution.

It doesn’t even necessarily have to be a partnership with a fintech company. Banks can partner with any brand to offer something new. Financial health, for example, is a hot topic. People know that their physical and mental health is important, but many are starting to realize the toll that financial stress can take on our minds and our bodies as well. So banks could start looking into partnerships with gyms or other health and wellness brands to promote better financial health and wellbeing.

Potential Roadblocks That Could Hold Financial Brands Back

Of course, when considering the future and how to create something new, it’s always a good idea to be mindful of potential roadblocks or challenges that may arise along the way. There is always something that could prevent us from moving forward and making progress. And it’s better to plan for that and know what challenges you might face as opposed to ignoring them and waiting until they are staring you in the face.

There are the usual roadblocks: delayed timelines, budget issues, or projects being entirely thrown out. And that’s normal. It’s important to prepare for these things and understand that sometimes things just don’t work out the way you planned. It’s the bureaucracy of it all—sometimes getting stuck in the bureaucracy and day-to-day tasks just happens.

James Robert suggests reading a book Humanocracy. It offers insight into how to break free from the bureaucracy that often holds financial brands back from moving forward and making progress.

He also suggests another book called Open Strategy. It helps brands open their minds and teaches them to understand that strategy happens at all levels; it doesn’t just come from the top.

Brands need to be more willing to listen to what everyone has to say—particularly the customer. Finding solutions and getting around roadblocks isn’t always about the internal ideas but is about listening to what people are saying and thinking on the front lines as well.

To break free from the bureaucracy, brands need to create space and time to dig in and think about what they’ve done, what has worked and what hasn’t, what they can do differently, and what the customers are specifically saying they need. It’s about giving yourself the time to just sit and think through it all.

And, of course, that’s not easy. There are a lot of distractions these days. It’s easy for financial brands to get caught up doing the same things over and over again because it’s hard to find that time and space to think of something new and to give it the time and attention it needs.

The key is to try to make it a habit of dedicating a certain amount of time each day or week or month to brainstorming without distractions.

It’s essential for financial brands to find those moments to disconnect—to review their day or their week—to think about what works and what doesn’t, and to plan and strategize for something new. This is the best way to get those creative ideas flowing and to get a better idea of potential roadblocks and how to navigate them.

Next Steps: Staying Focused to Deliver Something New

One of the best ways to move forward and change old habits is to set a challenge for yourself. This is an excellent opportunity for financial brands to push themselves and discover new ideas. And that challenge can be along the lines of challenging yourself every week to look into a new fintech.

You could set up a google alert for fintech and just scan through the headlines and then pick one that stands out. It doesn’t have to be something too involved. Keep it simple; otherwise, you won’t do it. But set up an alert or pick a fintech of the month to focus on. And then you can get together as a team to study and analyze that fintech for the month. Maybe you even have multiple teams studying a couple of different fintechs each month.

And then, every month or every week, whatever works best for your company, everyone on the team will set aside a few minutes to share what they’ve learned. It doesn’t have to be a long meeting—just a brief update. But this challenge will help you get into the habit of learning new things, which will help your brand become more flexible and adaptable, and open to new ideas and opportunities.

This is also a great way to learn about what ideas are already out there and which ones aren’t so you can come up with something new. The goal is to be the first mover on something new. You want to be the one to corner the market on something before anyone else does. And getting into the habit of researching fintechs and trends can help you get a better idea of what’s been done or what’s being done or in the works.

It’s a very practical exercise or challenge that can help banks and credit unions move forward. You need to continuously learn, think, do, review, and repeat to make something happen.