Welcome To
The Bottom Line

SRM Perspectives on Key Industry Trends

Durbin 2.0: Creating Clarity or Confusion?

Posted by Myron Schwarcz and Keith Ash on Aug 17, 2021 9:30:00 AM

Durbin_Blog_Image[57]

Rumor is that a further tightening of the Durbin Amendment is on the near-term horizon for card issuers. The most concrete evidence is the Fed’s May request-for-comment on regulations for debit routing of online transactions.

The Fed wants to clarify the regulatory requirement that at least two unaffiliated payment card networks must be enabled for all debit card transactions, including card-not-present (CNP), and card-issuing banks and credit unions will be held responsible. Some terminology will also see standardization.

While the Fed positioned its query as a “non-substantive clarification,” many of the 453 comments submitted so far express a belief that the proposal, if enacted, would have a significant impact on issuers. Meanwhile, bankers are entering a period of uncertainty as they closely monitor the situation for implications to P&L.

Read More

Topics: Payments, Vendor Contract Negotiation, Durbin Amendment, Regulations

Apple Pay Later | Will Card Issuers Respond in Time?

Posted by Myron Schwarcz and Larry Pruss on Aug 10, 2021 1:30:00 PM

Apple_Pay_Blog_Image[62]

If there were any lingering doubts about the potential impact of the buy now, pay later (BNPL) installment credit model on card economics, Square’s recently announced $29 billion acquisition of Afterpay likely put them to rest. Nonetheless, we see Apple’s plan to enter the fray with a feature built into Apple Pay as the more significant near-term concern.

Though much is still unknown, the unofficially dubbed “Apple Pay Later” could potentially be more threatening to card issuers than existing BNPL products. It could also further complicate the Apple - bank/credit union/debit issuers relationship, which could already be described as “frenemies” at best.

Read More

Topics: Vendor Contract Negotiation, Bank Vendor Management, Credit Union Vendor Management

The Equation to Boost Account Growth

Posted by Bob Koehler & Tim Keith on Aug 4, 2021 9:30:00 AM

AccountBoost_Blog_Image[87]

It’s an inconvenient truth - the timing of customers’ financial needs don’t always align with balance sheet strategy or marketing campaigns. Due to the pandemic, banks and credit unions were flooded with an unprecedented level of deposits but faced muted demand for the loans that put these funds to work.

Although no one has a silver bullet to synchronize customer needs with portfolio strategy, there may be an equation. SRM’s latest white paper, How Financial Institutions Can Boost Account Growth to Move with Changing Margins, offers a disciplined approach to being present when customers are “in-market” as well as a “growth equation” to boost account growth performance.

Read More

Topics: Lending, Marketing, Revenue Growth

New OCC Fintech Charter Gives Challengers & Neobanks A Competitive Edge

Posted by Paul Davis on Jul 22, 2021 9:15:00 AM

OCC_Blog_Image

In recent years, challenger banks, neobanks, and other fintech startups have intensified their efforts to compete as financial services providers. Now, regulators have renewed interest in shifting the odds in their favor.

By obtaining a new specialized charter through the Office of the Comptroller of the Currency (OCC), new competitors may gain strategic advantages over more conventional banks and credit unions.

Here is a closer look at some legal and regulatory developments which could determine just how entrenched fintechs will become in the payments system – and how competitive they can be with core banking products and services.

Read More

Topics: Payments, Fintech, Digital Banking, FDIC, Challenger Bank, Neobank, Growth Strategies

SRM Mid-Year Trends 2021 | Banks & CUs Perform Balancing Act

Posted by Paul Davis on Jul 14, 2021 9:30:00 AM

Mid-Year-Trends_Blog-Image

SRM recently released its list of 2021 midyear trends that banks and credit unions should monitor during the second half of this year. Naturally, these developments didn’t appear out of thin air – our top-performing project managers and experts make it their business to examine and spotlight those topics which carry the greatest strategic impact for payments and financial services.

In this post, SRM shines a light on some big acts we’ve long anticipated will draw attention by the millions, billions, and trillions.

Read More

Topics: Digital Banking, Vendor Contract Negotiation, Bank Vendor Management, Credit Union Vendor Management, payment trends, Voice Assistants

Despite Crypto’s Correction, No Change to Fundamentals

Posted by Larry Pruss on Jul 8, 2021 10:00:00 AM

CryptoCorrection_BlogImage[90]

Bitcoin has lost half of its value since reaching an all-time high mid-April. Although one might think this setback would cast a pall over a gathering of cryptocurrency enthusiasts, the overall tone of Coindesk’s Consensus conference in late May remained constructive and upbeat.

For those keeping their eyes on the prize, these two paths are not contradictory. Crypto’s long term value proposition hinges on its adoption as a means of exchange, not its volatile pricing as a speculative asset class. And there’s no sign of slowing down among large financial institutions and scrappy entrepreneurs creating trading and custody platforms and expanding payment capabilities for digital coins. These are the areas where banks and credit unions of all sizes need to take note.

Read More

Topics: Vendor Contract Negotiation, Bank Vendor Management, Credit Union Vendor Management

How FIs are Exploring Fintech

Posted by Paul Davis on Jun 30, 2021 9:36:00 AM

Fintech_Blog_Image[40]

Financial Institutions (FIs) have long had a curiosity regarding fintech.

There were concerns that these digital disruptors would create more competition for traditional financial services providers (without as much regulatory oversight), but banks and startups are starting to embrace opportunities to collaborate.

Conversations about partnerships between FIs and fintech intensified in the wake of the coronavirus pandemic, as scores of consumers and businesses became digital converts and there was a greater need to make day-to-day tasks easier (and safer) for those customers.

Read More

Topics: Fintech, Digital Banking, Online Lending, M&A

Pandemic Impacts to Consumer Banking Behavior | SRM Academy Survey Analysis

Posted by Pete Bainbridge & Jehan Sherjan on Jun 23, 2021 9:39:39 AM

SRM-Blog-Harris-Poll-Image

In 2020, SRM conducted three surveys to shed light on the financial services industry’s approach to navigating the pandemic. Our March and June surveys focused on bank and credit union executives’ responses to COVID-19 and their strategies for delivering uninterrupted service to customers.

Six months into the pandemic, we further rounded out the picture by commissioning leading research firm Harris Insights and Analytics to collect data directly from US consumers. This survey assessed how their banking habits had evolved since global lockdowns began, and how they might continue to change in the future. The results were further analyzed by SRM’s Europe-based Data Analytics team, which specializes in consumer behavior and loyalty insights.

The findings revealed some important differences by segment with key insights for go-forward digital banking strategies.  

Read More

Topics: Digital Banking, Consumer Behavior, Virtual Assistants, Intelligent Automation

Defining Decentralized Finance (DeFi) | What It Means for the Future of Banking

Posted by Larry Pruss on Jun 15, 2021 9:30:00 AM

DeFi_Blog_01-1

Traditional financial institutions are facing a new wave of crypto-enabled payments disruptions, and many don’t see it coming. Even so, lending as we know it is about to change.

In a recent post, I stressed the importance of banks and credit unions preparing for rapidly emerging financial technologies like CBDCs (central bank digital currencies) and DeFi. This post will take a closer look at what DeFi means for banking as we know it, and encompasses borrowing, lending, investing, payments, and digital wallets.

Read More

Topics: Fintech Vendor Selection, Decentralized Finance, Lending Consulting

Digital Banking Dispatches from the Beach | On Shoring Up Your Virtual Identity

Posted by Rob Coile on Jun 6, 2021 9:15:00 AM

Robs_Blog_Image-01

It’s not surprising commerce continues to migrate to digital channels across all sectors and that the pandemic has pushed further the already speedy digital banking trend. In the FI world, consumers rely on their bank or credit union’s virtual branch to navigate real-life decisions.

A recent family trip to Florida’s gulf coast reminded me of how much importance customers put into “What it says on the website.” We visited an area decimated by Hurricane Michael the year prior; although it remains a beautiful destination, the storm’s impact was still evident. Some businesses only had websites left standing, as we soon came to learn.

Read More

Topics: Digital Banking, Vendor management, Process Optimization

Subscribe to our blog

Recent Posts

Posts by Topic

see all