Pub. 12 2021 Issue 1

www.wvbankers.org 30 West Virginia Banker Making a Case for Your Bank’s Fintech Strategy By Adam Thomas, Dixon Hughes Goodman LLP A s banks seek innovation and efficiency, now is a prime opportunity to consider a strategy targeting financial technology (fintech). Evaluating the risk appetite for fintech can be beneficial not only for increasing technology and digital transformation but also to bolster customer acqui- sition efforts. In this article, we will explore business structure options as well as benefits from this alliance. What Does Fintech Mean to Your Financial Institution? Fintech can be hard to define, as the term means something different to each institution. While some think of fintech as technology that they can utilize for their own internal process- es or efficiency models, it can also mean technology to in- crease customer acquisition, enhance customer experience or provide new service offerings. An already prevalent trend that may perhaps be accelerated by the COVID-19 pandem- ic, particularly as many branches remain closed, is the need to target current and new customers attracted to mobile services who are looking for digital banking solutions. Since customer acquisition and retention are important for continued growth, customer experience strategy is crucial — and fintech can enhance that experience by offering cut- ting-edge technology, sleek interfacing and future-focused solutions. The correlation between fintech and customer acquisition can also extend to enhancing the social impact through technology that could ultimately help customers develop good financial habits or help underserved commu- nities obtain access to banking products that may not have been accessible previously. Develop a Strategy Fintech is based on innovation and often disruption, so begin any fintech strategy discussion by first asking how and where you can move away from more traditional methods to digital ones. This process usually starts with the board of directors discussing strategy development and exploring efficiency op- portunities. Consider how you can incorporate thought diver- sity within the board related to fintech, how the bank can help customers save and invest in new and improved ways and how new customers could see advantages to opening an account.