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Paul Davis

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Reflecting on Key Challenges & Opportunities in 2022

Posted by Paul Davis on Dec 27, 2022 12:10:35 PM

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Over the past year, SRM's experts have shared dozens of blogs, providing insight into industry-relevant topics.

We've covered a wide range of themes, including fintech trends, crypto, lending and deposit strategies, critical regulatory headwinds, and ESG programs.

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Topics: Fintech, Vendor Contract Negotiation, Interchange, Buy Now Pay Later, Digital Assets, Overdraft, credit card competition act

Why Staffing, Tech Upgrades Matter with 2023 Budgets

Posted by Paul Davis on Nov 9, 2022 11:14:00 AM

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Budgeting season for 2023 is slowly wrapping up as banks and credit unions forecast revenue opportunities and looming expenses.

 

Financial institutions are considering future interest rate hikes, regulatory oversight, and increasing personnel and operational costs, among other things. The bigger picture is that client retention and recruitment will be critical to long-term success – invest now to ensure you’re ready to compete. 

At SRM, we urge banks and credit unions to take a hard look at third-party contracts as they plan for the new year. There are also other considerations that should be made as you prepare for the future.

 

This year, we polled some of our experts, asking them to highlight areas that merit extra attention. Here are some highlights from their responses.

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Topics: Fintech, Automation, AI, Digital Assets, customer retention, ITM, Staffing

CFPB’s Buy Now, Pay Later Stance Should Comfort Banks, Credit Unions

Posted by Paul Davis on Sep 22, 2022 11:21:00 AM

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Banks and credit unions interested in offering Buy Now, Pay Later (BNPL) services should be pleased with the latest report from the Consumer Financial Protection Bureau (CFPB).

Many FIs have been reluctant to dive into the popular consumer offering, largely due to uncertainty over the regulatory environment. SRM asserted in a recent report that banks and credit unions have the experience and tools necessary to handle regulatory scrutiny.

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Topics: Payments, Vendor Contract, Buy Now Pay Later, BNPL, CFPB, Credit Cards

OCC Order Serves as Blueprint for Banks, Credit Unions Working with Fintech

Posted by Paul Davis on Sep 9, 2022 11:32:00 AM

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Banks and credit unions have a new roadmap for handling fintech partnerships.

The Office of the Comptroller of the Currency (OCC) just issued a written agreement to Blue Ridge Bankshares instructing the Charlottesville, Va., company to improve how it pursues and monitors fintech relationships.

The agreement comes months after the OCC raised issues with Blue Ridge’s ($2.8 billion-asset) proposed merger with FVCBankcorp (the deal was ultimately terminated). While the specific issue was never disclosed, there was speculation it had to do with Blue Ridge’s fintech dealings.

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Topics: Payments, Fintech, Vendor Contract, BaaS, Regulators, BSA

Inflation, Rate Hikes & Falling Consumer Confidence: Brace for Uncertainty

Posted by Paul Davis on Jul 26, 2022 11:19:00 AM

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Banks and credit unions must prepare for some consumer payments and credit quality turbulence.

Consumer prices rose by an astounding 9.1% by June from a year earlier – a 41-year high – causing the average American to spend roughly $460 more per month than they did a year ago, according to Moody’s Analytics Senior Economist Ryan Sweet.

Inflation has led the Federal Reserve to get aggressive with interest rates, including a 75-basis-point hike earlier this month. There is talk the Fed could opt for an unprecedented 100-basis-point increase in light of the June data.

Rising rates could deal another blow to consumers already facing higher costs for goods.

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Topics: Payments, Consumer Spending, Credit Cards, Mortgages

Why the Time is Right to Hire Instead of Acquire

Posted by Paul Davis on Jul 19, 2022 11:17:00 AM

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Many financial institutions have decided now is a better time to hire talent rather than buy another bank or credit union, enter new markets, or add business lines. The proof is in several high-profile recruiting announcements from small and midsize financial institutions.

CapStar Financial Holdings in Nashville, TN, will expand outside its home state for the first time after hiring a First Horizon banker in Asheville, NC. Encore Bank in Little Rock, AR, will move into Boulder, CO, after recruiting a former market president at Great Western Bancorp.

IC Federal Credit Union in Fitchburg, MA, hired former Avidia Bank executive CarrieAnne Cormier as its chief operating officer. Citadel Credit Union in Exton, PA, hired a team of bankers from Santander Bank with plans to launch a business banking division in August.

Columbia Banking System in Tacoma, WA, and Western Alliance Bancorp in Phoenix, AZ, are entering Salt Lake City after recruiting bankers from large competitors such as Bank of America, U.S. Bancorp, and Zions Bancorp.

Banks are also going after talent to grow or add new lines of business. RBB Bancorp in Los Angeles hired three bankers to beef up its Small Business Administration lending. Encore hired a banker to build a business banking community association.

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Topics: Acquisitions, Loan Growth, Mergers, Hiring, Regulation

How to Firewall Risk in a Buy Now, Pay Later Product

Posted by Paul Davis on Jul 6, 2022 11:14:00 AM

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 In our recent report, we made the case that banks and credit unions consider Buy Now, Pay Later (BNPL) as part of a holistic suite of payments products.

While a study from IntraFi Network found that four out of five small banks and credit unions are reluctant to get into BNPL, SRM believes that traditional FIs have the infrastructure to handle compliance requirements from agencies such as the Consumer Financial Protection Bureau.

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Topics: Payments, Buy Now Pay Later, BNPL, Credit Union Vendor Contracts, Bank Vendor Contracts, Point-of-Sale

CFPB Poised to Shake Up Competition for Consumers

Posted by Paul Davis on Jun 8, 2022 10:01:00 AM

CFPB Poised to Shake Up Competition for Consumers

Several initiatives by the Consumer Financial Protection Bureau (CFPB) seem poised to increase competition between traditional financial services providers and fintechs.

An effort to regulate nonbanks has gained support from banks and credit unions. Still, the CFPB’s plan to make it easier for consumers to move accounts will pressure traditional financial institutions to offer more products and better services.

These initiatives are coming when the agency is scrutinizing overdraft and nonsufficient funds (NSF) fees, the CARD Act, and the terms and disclosures of Buy Now, Pay Later (BNPL) offerings – the latter a topic SRM recently wrote a report on.

All signs point to the need for banks and credit unions to buckle up in coming months. These expected changes will likely bring fintech even more into the mainstream and raise the stakes when it comes to recruiting and retaining clients.

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Topics: Payments, Fintech, Regulations, Credit Union Vendor Contracts, Bank Vendor Contracts, CFPB

What Investors Want to Know About Your Tech Strategy

Posted by Paul Davis on Jun 2, 2022 11:02:00 AM

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In a recent conversation with a Colorado banker about tech strategies, he mentioned a looming investor meeting. He was putting together an overview and was trying to decide the best way to proceed.

"These are the people who provide the underlying support for what we're doing, so I want to make sure they know the road we're on will provide the value they want," he told me.

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Topics: Digital Banking, Vendor management, Cryptocurrency, Digital Assets, Banking-as-a-Service

Fintech is Redefining Community Banking

Posted by Paul Davis on May 2, 2022 9:30:00 AM

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Fintech is helping a growing number of banks and credit unions reconfigure the communities they serve.

Historically, financial institutions have focused on clients based on geography, be that a neighborhood or city for banks or a local company or industry for credit union membership. Over time, those boundaries became more fluid as banks entered new markets and credit unions expanded their fields of membership.

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Topics: Fintech, Vendor Contract Negotiation, Cryptocurrency, Bank Vendor Management, Credit Union Vendor Management, Segmentation, Banking-as-a-Service, BaaS

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