
Community Banks And Digital Banking


Michael Bryan, SEVP, Chief Information Officer, Veritex Community Bank
Community banks under $15B in assets are in a real dilemma with the Digital Banking subject, period. The Board hears mention of it and inquires. Most of the C- Suite has heard of Fintech but has no idea what it really is or how to pursue it. The banks IT department is compromised of infrastructure personnel keeping the lights on and servers spinning. The banks legacy core vendors are mostly silent regarding Digital strategy. If a legacy core vendor does have a modern Digital offering, the product is likely to be 10X more than they are paying today for mobile banking or online account opening.
“We must hire bankers who understand customer service and how to minimize friction with simple banking processes”
Community banks have depended on the IT department to lead technology initiatives and it has become to large for small IT departments to manage. Personally, I believe IT is infrastructure. Servers, desktops, switches, routers, printers. My goal for IT is to simplify the compute landscape. Centralized servers and data storage in a managed data center with redundant utilities and ISP’s. Failover in a different managed data center either complete failover or disaster recovery as a service (DRaaS). Telephony in the cloud and SDWAN for location failover. Core Banking outsourced or banking as a service (BaaS). Once you remove all of the location servers and consolidate servers in data centers the compute landscape becomes simple and easier to manage. I also recommend print as a service (PaaS) to move printer service tickets to a third party. For me this is IT.
Cyber and Information Security belongs in Risk. This group requires independence from IT to adhere with FFIEC guidance and auditor/examiner recommendations. IT remediates the audit findings; Risk enforces the compliance. Network Security should be outsourced to a reputable third party whom stays abreast of the threats that change minute by minute.
This leaves the question “who in the bank is responsible for Digital Banking strategy”? Consumer Banks should look internally at who can move the bank past web and mobile banking and see the nearterm strategy of online account opening and online Consumer/Small Business Lending. Fintechs are all over this space and now awarded charters for these purposes. Banking as a Service (Baas) has opened doors to Fintechs to white label their Consumer apps and utilize Community Banks for servicing. Online Consumer Deposit and Loan onboarding will be widespread in the next three years. Digital vendors have many implementations in their delivery queue and are months out for new implementations. Commercial Banking from an online account opening and online lending perspective are moving at a slower pace. The legacy core vendors and Fintechs focused on Consumer apps and a few vendors are in the Commercial space. As we witnessed the PPP loans utilizing commercial and small business customer portals for document exchange, this enabled these channels to begin the Digital journey. By end of 2020 several other Fintechs will have commercial online account opening. The commercial lending Digital channel has been around for the past two to three years, however very few community banks have taken the step to take it online
For me these are not technology strategies, these are banking strategies. We must allow our customers to onboard and borrow online. This is more about the customer experience and enabling self service in a very intuitive and easy environment. Like purchasing an airline ticket, groceries, making dinner reservations and now we can purchase a car online and it will be delivered to our home.
We must hire bankers who understand customer service and how to minimize friction with simple banking processes. Technology is the enabler and people make it happen. Community banks must make this a large part of their banking strategy and really get involved with these initiatives.
ON THE DECK
Featured Vendors
Claim Connect IQ: A Digital Marketplace that Connects Insurance Professionals with the Best Service Providers
FastTrack Disability Risk Management Solutions & Services: Robotics Driven Claims Adjudication Processes
EDITOR'S PICK
Essential Technology Elements Necessary To Enable...
By Leni Kaufman, VP & CIO, Newport News Shipbuilding
Comparative Data Among Physician Peers
By George Evans, CIO, Singing River Health System
Monitoring Technologies Without Human Intervention
By John Kamin, EVP and CIO, Old National Bancorp
Unlocking the Value of Connected Cars
By Elliot Garbus, VP-IoT Solutions Group & GM-Automotive...
Digital Innovation Giving Rise to New Capabilities
By Gregory Morrison, SVP & CIO, Cox Enterprises
Staying Connected to Organizational Priorities is Vital...
By Alberto Ruocco, CIO, American Electric Power
Comprehensible Distribution of Training and Information...
By Sam Lamonica, CIO & VP Information Systems, Rosendin...
The Current Focus is On Comprehensive Solutions
By Sergey Cherkasov, CIO, PhosAgro
Big Data Analytics and Its Impact on the Supply Chain
By Pascal Becotte, MD-Global Supply Chain Practice for the...
Technology's Impact on Field Services
By Stephen Caulfield, Executive Director, Global Field...
Carmax, the Automobile Business with IT at the Core
By Shamim Mohammad, SVP & CIO, CarMax
The CIO's role in rethinking the scope of EPM for...
By Ronald Seymore, Managing Director, Enterprise Performance...
Driving Insurance Agent Productivity with Mobile and Big...
By Brad Bodell, SVP and CIO, CNO Financial Group, Inc.
Transformative Impact On The IT Landscape
By Jim Whitehurst, CEO, Red Hat
Get Ready for an IT Renaissance: Brought to You by Big...
By Clark Golestani, EVP and CIO, Merck
Four Initiatives Driving ECM Innovation
By Scott Craig, Vice President of Product Marketing, Lexmark...
Technology to Leverage and Enable
By Dave Kipe, SVP, Global Operations, Scholastic Inc.
By Meerah Rajavel, CIO, Forcepoint
AI is the New UI-AI + UX + DesignOps
By Amit Bahree, Executive, Global Technology and Innovation,...
Evolving Role of the CIO - Enabling Business Execution...
By Greg Tacchetti, CIO, State Auto Insurance
Read Also
Hybrid Work Has Forever Changed The Need For It In Ramboll
How T-Mobile brought an Un-carrier approach to tech hiring
Every Changing Labor Force
Great Expectations: Balancing the diverse needs of a city in a...
"Discovery and Delivery" - An Approach to IT Workload Balance
Are Data Centers Forgotten Among Digital Trends?
