Bankruption Index

BANKRUPTION INDEX

How will your institution weather next few years?

What made community banks and credit unions successful in the past simply doesn’t cut it anymore.

Once the go-to destination for relationship banking, financial institutions have become bloated, outdated, ego-driven, know-it-all, do-it-all, whiny, tired, over-regulated, customer experience nightmares – but, that’s the easy part to fix. The days when community institutions could purposefully stay behind the curve and still come out on top are gone. Cutting-edge fintech companies are winning the hearts and minds of early adopters and everyday Americans alike by providing fresh new banking solutions that address consumer needs before they even have to ask.

Welcome to the bankruption: a turning point when community banks and credit unions must realize that doing business the way they’ve always done it is actually the riskiest move for the fate of their enterprise. The bankruption requires leadership of traditional FI’s to shed their ingrained thinking, invest in tools that improve efficiency and increase scale, discuss uncomfortable changes to strategy, and simply try new methods.

To compete and flourish in the new fintech world order, it’s all about shifting your mindset – and, perhaps, aspects of your strategy.

Get listed on the Bankruption Index and discover if your FI and your leadership team have what it takes to transition to the new world, or if you’ll get left behind in the pile of bankers stuck in their old ways. Along with your results, you’ll receive insight for how to improve your strategy to survive and thrive in the fintech revolution. The only thing holding you back is inaction – let’s get started!

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1. How important is physical proximity to the success of your organization?

Somewhat. We’re re-evaluating all of our branches now, but we still rely on them to deliver the majority of our new accounts and loans. Most of the applications we receive digitally are poor quality, but we do hope one day for the digital branch to take off.

Not at all – today, it’s all about well-placed digital interactions with our customers. Our board and our regulators understand this.

Very. Physical proximity to our community is our No. 1 leverage over our competitors.

I have been unsuccessful convincing my board and/or regulators to expand our definition of community beyond our local geography into the digital landscape.

2. How important is physical proximity in the delivery of your services?

We prefer people to come in to our branches because we don’t feel comfortable relying on our digital services

We're working towards getting our digital services delivered faster online, but it's still easier if a customer comes in

I need to sit and have coffee with someone opening a mortgage or any other account for that matter

We deliver our services how and when the account holder wants them. They can open and be decisioned on a loan digitally within seconds or come into our branch, meet our people and enjoy the free popcorn

3. As a rule of thumb, does your institution stay “behind the curve” to mitigate risk and lessen unnecessary expense?

Risk avoidance is the name of the game! We are typically the last institution in our market to announce particular technologies or services

We often test and roll out new applications to better serve our accountholders. We actively go after partnering with startups and or beta test from our existing vendors to try out new ideas

We have a policy of only adopting new products after they have been endorsed or tested by plenty of other FIs. Our market doesn’t notice if we’re a few years late in delivering the latest technologies or products, anyway

We don’t purposefully stay behind the curve – things just move so fast, and we have a very small team - it’s hard to keep up!

4. How many banking/financial services industry association events did you attend in the past year?

3-4. I find the conventions a valuable source of education

5 or more. My dance card is full from all the conventions I frequent! Sometimes, I’ll send others from my team to expand their minds, as well

1-2. I researched a few industry events, but day-to-day operations just got in the way of actually attending them

None. I view these industry events as a waste of time and money

5. Do you have a succession plan in place for your institution?

We have a succession plan in place for all key staff with named “next generation” teammates who are actively being groomed for their new roles with continuous training and regular reviews

Our key staff does not plan on retiring any time soon

There is no need for a succession plan right now, but we will put one in place when the time comes

We have key staff replacements named but have not built a plan around it

6. To what extent do your board members hinder the success of your financial institution?

A bit. Some are slow to embrace new methods or technology, but they’re gradually coming around to learning about the new realities of banking. Hopefully soon, we can have a serious discussion about fintech competition

Zero. Their willingness to evolve with the times is the rocket fuel for our forward trajectory. Some of them even push me to think in new ways!

A lot. They seem interested in hearing about new threats rather than new opportunities in technology, data driven market, etc. I have hard time getting them to commit our institution to adapting to the new world

Every step of the way. Our board members are stuck in the past – and holding the entire institution back there with them

7. What level of influence does consumer research have on your services and product offerings?

Expert. We run everything through the lens of the consumer experience first to determine what they need before they even know they need it

We use a combination of primary and secondary research to gain an understanding of what we need to be offering

My institution only relies on face-to-face interaction to inform our services

Zero. I recognize the importance of consumer research, but we don’t invest in it to keep costs low. We mainly just watch what other FIs do, see if the offering is successful, then consider it in the next budget cycle

8. How many outside vendors does your institution partner with to achieve competitive advantage of scale?

A few– it’s much easier to rely a few vendors versus juggling many at once

Several – we actively attempt to keep our vendor list small, but we are still interested in best of breed offerings, and will break from the “single vendor” mentality to get the best for our FI

One - we have a strict policy to use a single vendor for all of our accountholder services

Many – we utilize the expertise of several outside partners in all areas of our business

9. What marketing techniques are you using in your strategy to promote your institution?

We’re incorporating contemporary tactics, but we’re not sure how to measure our efforts

Our marketing plan included data driven 1:1 marketing

Currently we’re participating in traditional techniques because we are weary of allocating our marketing budget toward new methods

We don’t advertise

10. How does your institution view using digital alternatives in place of human interactions?

Reducing redundancies is a vital part of implementing technology for our business

We believe it could be more efficient, but the leadership team is afraid it could hurt our organization

We’re open to it but we’re reluctant to replace human interaction in some instances because accountholders rely on it

Nothing can truly replace real, human customer service in banking

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