SEPTEMBER - 20198IN MY OPINIONThe Marvel superhero movie arc beginning over a decade ago consisting of 22 movies has culminated in "Avengers: Endgame" that surpassed $2 billion (as of this writing) in record time. As with any superhero movie, there must be heroes and villains.In the banking industry, this conflict is often seen in traditional banks versus fintech and your physical or virtual street corner probably dictates your take on this tension.On one hand, most traditional banks are slow moving and not as technologically savvy, but provide trust, stability, and safety. On the other hand, fintech companies and digital banks have no physical presence, but do provide convenience, significantly faster iteration, and low fees.Regardless of your stance, consumers are in the driver's seat and change is happening faster than we perceive. Customer preferences, digital banks, and non-bank disruptors are forcing a pace of change in an industry that has historically plodded along. Traditional brick and mortar banks must strike a careful balance to retain existing customers while acquiring new customers that fundamentally value convenience differently.Banks have long been in charge of how customers connect, communicate, and transact business. Existing mature bank customers find value in branch usage with digital capabilities being a strong supplement. Younger consumers do not place the same value on the physical network and look to digital capabilities as a primary decision point. According to Novantas' Customer Knowledge U.S. Shopper Survey (Figure 5), convenience drivers shifted away from branch-centric factors by 12 percent from 2014 to 2018. Many regional and community banks face this dilemma. Banks with large branch systems and mature customer bases, but with minimal digital capabilities and footprints, face uphill battles to acquire new households. While they might have low attrition, they also have low new-to-bank growth rates. Brick and mortar banks need data and an understanding of how the consumer wants to interact. The proliferation of mobile devices is dramatically altering how consumers view and interact with the financial service industry, and By Daniel Dent, SVP, Consumer & Small Business Deposits and Emerging Payments, Capital BankFintech Endgame: Superheroes or Villains?Daniel Dent
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