Pub. 9 2019-2020 Issue 2

6 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S www.coloradobankers.org FEATURE ARTICLE Fintech Innovations Transforming the Financial Industry Landscape BY ANDREW RUSSELL PRESIDENT, SOUND PAYMENTS A s recent members of the Colorado B a n k e r s ssociation, I wanted to introduce my team and share some thoughts as a long-time executive in the industry – having sat on the other side of the table for many years! In the upcoming months, you will meet Cesar Rivas who is our company representative for Colorado and resides right inDenver. However, my door is always open – I love conversations about technology and banking. I havewitnessed (and been a part of) the gradual change of how a bank operates and the unnecessar y physical presence of users to execute transactions. Today, the means offered by fintech and innovators have inter rupted the traditional way in which financial products and services are used. Digital technologies are driving change in the financial services i n d u s t r y . To d a y ’ s d e m o g r a p h i c s , sophisticated and global customers,areinsearchof banking services through omni-channel platforms. Today’s businesses are a lso in search of an omni-channel banking platform that constantly evolves and interconnects new capabilities such as facial recognition, online/mobile banking, payments, e-commerce, full service remote capabilities, applications development, bill pay, payroll, credit, etc. The importance of streamlining processes in the financial industry has warranted the need for innovation in technology and how we communicate. Affirmation of the shift from traditional banking to fintech solutions is based on information reported in the EY Fintech Adoption Index 2017. This study, which considers 22,000 users in 20 developed and developing markets, reports that approximately 33 percent of the sample under study uses two fintech services (EY Global, 2017). The areas in which a higher demand of use was reported list banking payments and transfers (50 percent), followed by insurance (24 percent), savings and investment (10 percent), loans (10 percent) and financial planning (10 percent). The overwhelming amount of applications offered to a targeted client base provides evidence of the demand in the market. Fintechreports anacceleratedandsustainable growth in the last four years due to an increase in demand and the advantage and the ease of use technology provides consumers and financial institutions alike. On other hand, bank networks became conspicuously overgrown during the expansion years, and having a large branch distribution network was seen as a winning strategy. Today’s reality is that foot traffic is substantially down. The question becomes, how can banks reduce branch distribution network expenses without harming the brand and client acquisition rates? First, the leadership needs to change the past and traditional banking format to a flexible and Agile model that includes reduced traditional branch banking, small satellite access, Kiosks, and Online/Mobile access. Second, the leadership needs to make the tough calls in eliminating the least profitable branches and offering alternate accessibility to the client base. Third create a corporate culture of continuous improvement that focuses on developing efficiencies, improving processes, reducing costs, and achieving growth. Today’s evolving demographics show that customers are willing to switch – and even pay a premium – to move to a financial institution capable of offering high-value, digitally enabled services. Many financial institutions are not