When it comes to fintech publicity in the banking sector, it would seem that the big boys are getting all the coverage. Goldman Sachs with their highly successful Marcus brand, Citi’s interesting customer innovation-driven CANVAS initiative, and Wells Fargo’s Greenhouse mobile banking experience, their new robo-advisor Intuitive Investor and cardless ATM initiatives – these are where all the publicity is being garnered. Behind the scenes, though, community banks are pushing forward with their own fintech initiatives, aimed at small- and medium-sized businesses (SMBs). According to a recent FIS survey, these customers are increasingly frustrated by the offerings availed to them through large financial institutions. This opens the doors for both marketplace lenders and community banks (and credit unions) to step in and scoop up that business with superior products and services, and that is being driven by innovative adoption and development of fintech offerings. It’s great to see the doors reopening for smaller banks through smart use of financial technology to win new customers. This is a trend we’ll be watching and rooting for in 2018 and beyond.
“With big banks pulling back from small and medium-sized business (SMB) lending in the wake of the global financial crisis, the market was ripe for someone else to fill the credit gap. Enter: alternative lenders.
While marketplace lending platforms and alternative finance players first surfaced to compete with traditional financial institutions (FIs), many large banks have now realized that collaborating with these companies is the way to better service SMBs — and without the added investment in developing proprietary systems.
As this trend unfolds, though, there is another player in the small business lending space that still stands to disrupt the industry even if it isn’t grabbing as many headlines.
Community banks approved 49 percent of SMB loan applications in November, according to the latest data from the Biz2Credit Small Business Lending Index.
“Small banks process a lot of [Small Business Administration (SBA)]-based loans and, according to recent figures released by the agency, the current fiscal year has already seen a record amount of SBA lending,” explained Rohit Arora, Biz2Credit CEO, in a statement.
But small business lending is only one part of the banking puzzle. SMBs demand access to robust solutions, from mobile banking to advisory services.
According to FIS’s “Performance Against Customer Expectations (PACE)” report, released last July, SMBs are becoming increasingly unhappy with the options they’re offered at large FIs, and it’s causing them to consider switching providers. Here, again, lies another opportunity for community banks to fill the void…”
Full Story at Pymnts.com