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CBA LIVE Event Overview, Part 2: Data, Fintech, BNPL in the Spotlight

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As noted in the first article in our CBA LIVE 2022 Overview series, Naehas had two of their team members on site for the retail banking industry’s major annual event in early March. With over 70 sessions, more than 1200 attendees, top-notch expert speakers and former CBA Presidents sharing expertise, insights and implications of a fast-changing industry, there is plenty to share. With thanks to Senior Director Brent Plow and Managing Director Michael Bedard, here’s the additional insight they felt worthy of sharing with industry insiders.

Among the many featured speakers were CBA President & CEO Richard Hunt, who, as noted in the initial overview, was given a proper sendoff as he prepares to retire this summer. His leadership on all fronts over the past 13 years was recognized for the vision and value he brought to the industry, its membership and the annual events in which he played a vital role. The hard work was evident in the high-quality presenters, and featured speakers, including Michele Lee, Wells Fargo, N.A. Regional Banking Executive, CBA Board Chair, David Silberman, Former CFPB Acting Deputy Director, & Former CFPB Associate Director for the Division of Research, Markets, & Regulations, and the CBA Past-Presidents who gathered for a popular Meet the Presidents panel discussion.

Hot Topics: Digital Transformation, Data, Privacy & more

The prevalence of the industry’s digital transformation seemed to top the charts among the major trends and technologies being discussed at CBA LIVE. While this was no surprise to Plow and Bedard, they observed a welcomed and growing sense of urgency among CBA members. This matches what industry leaders have been driving toward in recent years, according to Plow. As representatives of platform technology solutions purposefully-built for financial services institutions, he and Bedard are responding to questions from banks either just starting, or needing to begin the process of, enterprise-wide digital transformation.

On this topic, and responding to evolving consumer demands, Broadway Bank’s David Bohne offered this:

“The great thing about our business is that it’s a meritocracy and it starts with the customer. The customer is looking for us to perform for them every day and night. […] I think that now the scale is available through our technology partners [to deliver a top digital experience] while still providing that local flavor.”

“Digital is clearly the new imperative,” said Plow. He and Bedard sensed a forward-thinking change in the way retail banks are preparing to meet the new needs of customers, stakeholders and regulators. The challenges of scalability, compliance and emerging regulations call for increased attention to industry innovations that address this enterprise-wide drive to digital.

Deep Dive on Data

Another key focal point the Naehas team noticed: data. Of the many sessions that offered valuable insights and expertise, one program stood out to Plow and Bedard for its analysis and insight. In the session, “Leveraging Data Analytics to Drive Hyper Personalization,” Jeff Keltner, Senior Vice President of Business Development at Upstart, reinforced what Naehas executives and CBA past presidents have been seeing as a growing area in need of attention and care.

Keltner reinforced that for banks to earn consumers’ business and loyalty, they need to provide highly personalized experiences in three key areas: outreach, offers, originations process. Focusing on the value of data, he discussed the protection, leverage and use of it. As Plow observed, this area will be one of growing significance for banks moving forward, considering increasingly cybersecurity and privacy concerns.

“Data is the lifeblood of any digital organization, and being able to leverage it is the key to winning in the new era,” said Keltner. On the issue of offers, he noted, “The right offer must include presenting the best possible product and the best possible pricing for consumers…as consumers are increasingly rate shopping.”

Commenting on the Origination Process, Upstart’s Keltner offered this: “Consumers now expect a low-friction digital experience and are willing to pay a bit more in interest for it…Upstart has seen more than 60% of loans start on mobile devices; having an optimized mobile experience is crucial to keeping these customers.”

These strategic points are particularly pertinent to the work that Plow and Bedard do in collaboration with finserv clients looking to up their personalization game. They work in partnership with digital transformation and customer experience experts, such as Capgemini and others, as seen in our Resource Center to meet finserv’s needs and solve for common pain points of hyper personalization.

Focusing on the customer experience is a core function of the cloud solutions Naehas offers. The Naehas team coordinates industry specific platform solutions that address the growing demand by banking institutions to deliver the right message at the right time on the right platform to land and expand relationships. Getting personalization right is critical to getting and staying competitive.

New Players Gain Industry, and Regulator, Attention

With such dramatic change in the retail banking industry over the past several years, Plow and Bedard were not surprised to see new players in financial services gain attention. There was growing consensus that fintech, crypto and Buy Now, Pay Later enterprises are now common banking industry partners, and more mainstream than even two years ago. The consumer trends, innovations and implications of this new normal continue to be of keen interest by executives, regulators and service providers, all of whom will define the pathways ahead.

FinTechs Find a New Normal

Financial technology companies, or fintechs, are now part of the new normal, noted Plow.

“The lines between fintech and banks are blurring, and I think it has to be this way,” said Plow. He added, “Banks are becoming more digital and, as such, becoming technology companies, as they need to reach their consumers and delight their customers through a transparent, easy, digital-first type of approach and service. Fintech companies are coming from the tech side, but fast approaching the question of ‘How do we disrupt some of these traditional banking services (checking accounts, credit cards, savings accounts, wealth management pieces?’ and that requires them to become banks, so the two are going to collide.”

He and Bedard both see these transitions in a positive light, noting the opportunities to create operational efficiencies, improve the customer experience, and better manage compliance with automation that technology delivers.

Notably, during the Meet the President’s panel, one of the speakers, SoFi Bank President, Chad Borton acknowledged the major changes. He commented that while years ago their advertising was focused on the premise that they were not a bank, that has clearly shifted. Now, as noted by the Naehas team, while fintechs may still be considered disruptors, they are transitioning to becoming a bigger part of the evolving industry. As such, there was definitely interest in leveling the playing field from a regulatory compliance standpoint, as clarified in recent CBA statements.

“I agree with [the call for fintechs to assume federal oversight], and I welcome the challenge,” said Borton during the panel discussion. He added, “I think there are many benefits about being a bank. I think people should walk through the front door, become a national bank, and live on a level playing field.”

This coincides with growing pressure on Buy Now, Pay Later (BNPL) and cryptocurrency firms to begin preparations for the nearly certain emergence of a range of regulations ahead.

At the Intersection of BNPL and CFPB

All eyes and ears were on the topic of “the new CFPB’ and the role regulators will play in protecting consumer data and ensuring guardrails are in place.

Plow cited a number of recent related announcements in the news which the industry is watching closely. As noted in a Forbes article in early March: TransUnion, one of the three main consumer credit bureaus in the U.S., began including data from Buy Now, Pay Later (BNPL) companies in consumer credit reports in Feb. 2022. The news came shortly after Equifax, a competing credit bureau, announced a similar initiative.

Crypto Compliance Enroute

The CBA LIVE event shed light on the fast growth of the cryptocurrency segment. As Plow sees it, the consensus is that once regulations are put into place, crypto will only get bigger, and continue its upward trajectory to become a more prominent player, in the industry and around the world. President Biden’s Executive Order was issued on the final day of the CBA Live event. Bedard noted that those companies will be wise to expedite their regulatory readiness.

The Road Ahead: Resources, Relationships and Revenue

With a successful CBA LIVE event done, and done well, retail bankers seem to have a clear understanding of the challenges they’ll be tackling as the industry continues to evolve. The focus on digital transformation, first and foremost, will require bank marketing, operations, IT and digital services teams to forge new pathways to relationships and revenue.

As was clear among the sessions and speakers at the event, gaining a competitive edge will require attention to several important areas of need in this new normal. First, an enterprise-wide embracing of as-yet untapped innovations and platform solutions. Secondly, learning about, and leveraging, best practices, identifying the best partners with whom to collaborate to meet their unique needs is fundamental to future success. No one is going it alone. Making change is a heavy lift no matter the size, style or age of the institution. Third, expediting the process of digital transformation to meet customer needs is the final step in this critical trifecta.

Succeeding on each of these fronts will drive growth for the institution, delivering strong ROI, while ensuring the industry as a whole rises to a higher standard of service.

To this end, team Naehas is committed to continuing its legacy of leadership, by providing a Resource Center of actionable insights and innovations. From case studies to webinars, high-level expert panel discussions and solutions briefs, vendor selection criteria checklists, and these blogs, take time to acquaint yourself with ways our industry experience can be of service.

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