44 MAY / JUNE 2018 The Money 20/20 conference1 prides itself in bringing together companies of all sizes and backgrounds: from multibillion dollar financial institutions, to fintech start-ups working out of their garages, and everyone in between. As a first-time attendee last fall at the world’s largest and most wellknown payments conference, I spoke with seasoned vets on what I could expect. “Wear comfortable shoes” and “get ready to be overwhelmed” were the pieces of wisdom bestowed on me. Comfortable shoes turned out to be a hot tip, as I navigated through the 11,000 attendees, 4,000 minutes of content and a 1.8 million-square-foot exhibit hall filled to the brim. By the end of the four-day conference, my pedometer logged me as having walked almost 30 miles. While the size of the conference is staggering, the sense of being overwhelmed was different than what I expected. It came less from the sheer size of the conference and more from how quickly the industry is moving – including the litany of cutting-edge things you feel you should be doing (and are not), and wondering if it is too late for community banks to remain competitive in payments. The clock is ticking, but here are three reasons why it’s not too late for community banks to disrupt payments: 1. Fintech DNA. While community banks seemed to be underrepresented at Money 20/20, their spirit loomed large. Echoing throughout conference sessions were fintechs that passionately described their focus on underserved markets, customer experience and making a difference in individuals’ lives. Despite what may appear to be differences on the surface, fintechs and community banks share the same DNA. Because of this, you’ll find many of them more willing to partner with community banks. 2. Agility. The adage of “the bigger they are, the harder they fall” may not necessarily apply, but larger conglomerates can find it more difficult to innovate quickly. While there is an obvious scale advantage to being larger, enacting change proves challenging when dealing with legacy systems and hierarchal bureaucracy. Community banks may still be reliant on legacy systems as well, but have the competitive advantage to adapt quickly, tailoring offerings specific to their unique customer base. With cost of technology continuing to drop, the latest products, services and features are no longer reserved for only a few organizations. 3. Better together. Representing 13 percent of assets,2 community banks together continue to be a big piece of the pie, but the gap is closing fast. That power in numbers comes from acting as a distributed network of unique organizations with a common purpose. Unifying for shared services that allow for independence, scale-open architecture will allow community banks to remain both competitive and individualized. The payment’s landscape may look completely different in five years, but there will be a place for community banks in the picture if they act now by partnering with organizations that share their common interests, allowing innovation to take root and transform their institutions, and by investing in ways to enhance their key differentiators. When looking at the future, don’t get overwhelmed – get a pair of comfortable shoes. HB 1Money20/20 USA 2017 took place Oct. 22-25, 2017, in Las Vegas. The event bills itself as being for “innovators and leaders focused on disruptive ways consumers and businesses manage, spend and borrow money.” 2Federal Deposit Insurance Corp., Historical Community Banking Reference, Download Data File: 2017 to 2017, fdic.gov/regulations/resources/cbi/data. html Robert Jarosinski First Vice President of BankCards & Payments Bankers’ Bank RJarosinski@ BankersBankUSA.com Bankers’ Bank is an associate member of the Indiana Bankers Association. Article author Payments Disruption It’s not too late for community banks OPERATIONS / TECHNOLOGY
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