Bank Innovation’s Top 5 Stories of 2018
It’s been an interesting year. Bitcoin is no longer enjoying the limelight, non-bank giants like Amazon, Walmart and Google have shaken up the banking landscape and automation has become the norm in various aspects of banking with banks like using it in the backend of credit decision-making and lending.
But which Bank Innovation stories caught the attention of BI’s readers? Below are 2018’s top-five stories to date, in descending order, based on web traffic.
At the beginning of the year, BI posted it trends to watch for 2018. Biometrics, AI in PFM, big data, regulation and rise of cashless society made the list. But, as the year progress, AI was certainly among the biggest stories of the year. Most of the large banks such as Chase with its mobile-first bank Finn, Bank of America with its virtual assistant Erica, Umpqua Bank with its “human digital” Go-To platform have used AI-based technology in launching customer facing products. Of course, this expansive use of AI and big data has enabled increased use of digital banking services, which in turn has promoted biometric-based authentication and mobile payments. And most recently, the Treasury Department publicly endorsed the idea of a “fintech charter,” and the OCC announced it was (re)opening its application for fintech charters.
Every year, Bank Innovation compiles a list of 44 people that have shown ingenuity in digital banking innovation. Think of these people as the movers and shakers of the industry, paving the way with forward-thinking technologies and ideas. The list features innovators ranging from chief innovation officers, such as Lara Druyan, Managing Director, head of innovation at Royal Bank of Canada, West Coast and at major banks to leaders at smaller fintech ventures, such as Sergey Vart, CEO, and Co-founder of blockchain-based startup, Cereal.
Are bank branches still relevant? This seems to be a tough question for banks that have spent most of their existence subscribing to the idea that branches are the best way to interact with customers. That might have been true a decade ago, but things are rapidly changing as customers prefer using a digital platform or ATM to handle daily transactions like deposits, balance checks, transfers etc. Today, many FIs are struggling to understand what role, if any, the bank branch plays in today’s digital landscape. Right now, the general consensus is that brick-and-mortar banks are still necessary for specialized transactions such as loans or financial advice. But with AI-focused lenders and personalized robo-advisors, even those areas seem to be threatened by fintech players, which explains why more than 1,700 bank branches were shut down in 2017 alone, the most since the Great Depression.
The topic of core processors might not be a glamorous, but BI readers are very interested in who the top players are. The market-share leaders at the beginning of 2018 were Fiserv, Jack Henry, FIS, CIS and Finastra among others. Fiserv owned 37% of the market. Second-place, Jack Henry had 17.6%.
The top stories of 2018 so far is a recent story about payment company Square Cash adding direct deposit. Payments has been a hot topic this year. Venmo, PayPal, Apple Pay and the plethora of payment companies have been front stage not just in terms of media attention but also in terms of innovation, new technologies, and customer-centric products and services. The top story is not only reflective of readership interest in Square Cash but also speaks to the growing interest in the payments landscape. The story noted that Square Cash’s adding deposit is significant because, although technically it resembles a prepaid account, it shows banks that nonbank competitors offer the potential for real checking account competition.
