Paladin Blog

Bank Worker Productivity and The Technology Imperative

Posted by Chris Nichols, Chief Strategy Officer at CenterState Bank on Sep 6, 2019 1:51:33 PM

Back in the 1980s, there were more banks, smaller banks, and little technology. We were still driving checksaround, there was no online banking, and networked ATMs was the latest in bank technology. At the time, the rule of thumb for bankers was that each bank employee produced about $20,000 of operating profit per year. Since each bank had about 100 employees, operating profit was about $2mm per community bank. In this article, we look at how this equation has changed and what it means for the future.

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Tags: Fintech, Bank Tech Spending, Bank Technology

This Month In Banking: Discussing The Future Of Open Banking

Posted by Paladin fs on Aug 2, 2019 4:06:27 PM

Paladin's CEO, Aaron Silva, recently had the pleasure of appearing on the This Month In Banking podcast by The Kafafian Group. Aaron and the hosts - Sharon J. Lorman, Jeffrey P. Marsico, and Gregg J. Wagner - discussed what the future of banking looks like, industry issues with the Big Three core providers, and the relationship between the two.

LISTEN TO THE FULL PODCAST

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Tags: Fiserv, Jack Henry, Fintech, FIS

Forbes: FIS Retreats Under Pressure From GCC

Posted by Aaron Silva on Jul 18, 2019 12:12:49 PM

In late June, Forbes published an article on FIS recent attempt to unilaterally implement a new security surcharge on a select few of their clients without their permission (FIS has not stated publicly how many were targeted but GCC estimates there were 250-300 guinea pigs). These fees, costing several tens of thousands of dollars per client, were imposed because FIS stated it had recently improved its security infrastructure to address new threats and that they wanted to “partner” with their clients in sharing this expense. No explanation was provided as to exactly what these threats were or why they decided to deploy this tariff [now] and without the consent of their clients, even though each FIS client had already agreed to a security SLA guarantee in their existing agreements.

According to FIS, this security surcharge was justified, and in exchange they would extend indemnification to include the Banks’ client behavior subject to exclusions and Limits of Liability (LOL) already stated within their agreement.  LOL is traditionally woefully inadequate in most standard FIS agreements as it is and so this "benefit" really has no tangible value to a banking franchise. FIS stated that these kinds of security measures are becoming increasingly necessary, as cyber-attacks are growing in popularity and evolving in complexity.


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Tags: Fiserv, Jack Henry, Fintech, FIS

Our 7 Question Test To Prevent Bad Bank Technology

Posted by Chris Nichols, Chief Strategy Officer at CenterState Bank on Jul 2, 2019 10:53:55 AM

The largest problem with bank innovation is that we see or hear about a sexy piece of technology at a conference or at another bank and then acquire it. The new piece of technology ends up solving a known problem but in the process actually creates more problems, and risk, than it solves. It’s called the “Shiny Object Syndrome” (SOS), and it could be sowing the seeds of destruction for many banks. In this article, we look at the seven strategic questions you need to answer before acquiring any piece of technology.

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Tags: Fintech, Bank Tech Spending, Bank Technology

The Most Important Function You Need For A Digital Bank

Posted by Chris Nichols, Chief Strategy Officer at CenterState Bank on Jun 6, 2019 11:12:47 AM

While online account opening and digital lending are great, there is one function that is the most in demand by bank customers, yet most banks don’t think to provide any digital functionality around it. It is the one function that drives up the most cost for a bank and is the most significant reason why bank customers still say they want a branch. Solve this problem, and you start to become a true digital bank. In this article, we look at the data around the problem and how to solve for it.

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Tags: Fintech, Bank Tech Spending, Bank Technology

Here Is What Other Banks Spend On Technology

Posted by Chris Nichols, Chief Strategy Officer at CenterState Bank on May 16, 2019 12:47:06 PM

 One question we always ask is if we are spending enough on technology? After that question, we get confused and mired in the quicksand of financial reporting, finance philosophy and technology strategy. “Technology” is so pervasive that it is difficult to determine what the difference is between spending on “digital” projects versus “analog” projects. For instance, if we upgrade our phone system from dedicated copper to fiber optics that is an analog project but if we convert over to a slower voice-over-IP system is that a digital project? In order to shed some light, we did some research to help banks set their IT budget for next year.

Technology Spending As A Percent of Non-Interest Income

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Tags: Fintech, Bank Tech Spending, Bank Technology

WSJ REPORTS:  Core IT vendors building tollways, not highways to bank-owned data

Posted by Aaron Silva on Apr 13, 2019 1:58:36 PM

The Wall Street Journal published a story about small banks beginning to rebel against the Big Three Oligopoly ("the BTO") of core IT suppliers Fiserv, FIS and Jack Henry - now commanding more than 90% of market share according to CELENT.  I was interviewed extensively by the writers about the ease (or difficulty) of technical access and economic affordability when banks need unfettered access to their data (i.e. for third party fintech partners).  While they are starting to provide access, they're doing it in a way that unfairly monetizes your data to their exclusive benefit.  Here's how.

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Tags: Fiserv, Jack Henry, Fintech, FIS

Negotiating Like a Boss

Posted by Aaron Silva on Mar 12, 2019 9:27:36 AM

How does a $1.6B mutual bank in a small Massachusetts community find a way to drop more than $4.4 million in cash to their bottomline without changing a single IT supplier or interrupting one of their online customers?

Simple. Beginning in 2014 they took the long-game view and intelligent approach to negotiating against their very powerful core IT suppliers and critical technology vendors. BayCoast Bank is run by Nick Christ and was recently awarded the prestigious ICBA National Community Bank Service Award, Grand National Winner, but Mr. Christ has a secret weapon within his ranks - Dan DeCosta their Chief Information Officer. Mr. DeCosta is as friendly as any banker has been created but inside he is a shrewd technologist and businessman that knows how to leverage the power of outside expertise, market intelligence and pricing data with the patience of a tortoise prepared to ultimately beat any other hare.

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Tags: Contract Negotiations, Paladin Success Stories

Terminate the Termination Fees: Banks must put an end to outrageous terms

Posted by Aaron Silva on Nov 5, 2018 2:18:26 PM

Excessive fees create a manufactured barrier to acquiring competitive technology that would help the banking industry survive and flourish. This is an unfair business practice at any measure and may not be legal in many states.

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Tags: Contract Negotiations, community banks, Credit Unions, vendor merger, M&A

Community Banks Discovering Advantages of AI, But Can They Actually Acquire It?

Posted by Alex Lopatine, Managing Director of Fintech Advantage on Sep 10, 2018 3:47:19 PM

The experts agree. Artificial intelligence (AI), the process of machine learning, is exploding and we’re just getting started. According to Gartner Research, AI is the number one strategic technology trend in 2018. The American Bankers Association says AI is one of the top five fintech trends that will drive the next decade of banking.

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Tags: Contract Negotiations, community banks, Fintech, open banking