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.
WSJ REPORTS: Core IT vendors building tollways, not highways to bank-owned data
Topics: Fiserv, Jack Henry, Fintech, FIS
How does a $2B 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.
Terminate the Termination Fees: Banks must put an end to outrageous terms
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.
Topics: Contract Negotiations, community banks, Credit Unions, vendor merger, M&A
Community Banks Discovering Advantages of AI, But Can They Actually Acquire It?
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.
Topics: Contract Negotiations, community banks, Fintech, open banking
Impact of Core and IT on Mergers and Acquisitions: Protecting Shareholder Value
The vast majority of middle-market community banks and credit unions will at some point explore acquiring or being acquired because M&As are one of the quickest and most effective ways a bank can scale up, expand reach, and grow. Unfortunately, many of these banks have no choice but to watch lucrative M&A opportunities pass them by because they unwittingly agreed to grossly unfair and inequitable terms in their core and IT contracts.
Topics: Contract Negotiations, community banks, vendor merger, M&A
Global independent investment banking advisory firm Evercore ISI interviews fintech expert Aaron Silva on all things banking. Listen now to Aaron's predictions for the banking industry: bit.ly/SilvaOnEvercore
Topics: Contract Negotiations, community banks, Fiserv, Fidelity, Jack Henry, Vendor consolidation, Credit Unions, vendor merger, M&A, Fintech, open banking
LISTEN NOW: Will open banking change banking-fintech partnerships?
In this comprehensive expert panel discussion at LendIt Fintech 2018, Paladin's Aaron Silva leads a compelling and lively discussion about how financial institutions are navigating the exciting world of fintech. Topics include innovation, opportunities, resistance, analytics, security and much more. Four renowned experts participate in the podcast every bankers should hear. Listen NOW:
Topics: bank events, Fintech, open banking
Your bank is constantly looking for ways to improve its fintech as competition from the big banks steadily increases. Routinely you turn to your current core and IT suppliers for ancillary add-ons like mobile deposit, fraud detection, a CRM or a new EFT card services feature. There are a million options your supplier can up-sell that will improve the current core solution. There probably isn’t an institution in the United States that doesn’t have a quote on someone’s desk waiting for approval.
Cost Control: Ferreting Out Hidden Costs to Improve the Bottom Line
As we enter 2018, it's more crucial than ever for local banks to focus on their bottom lines, and for credit unions to improve member value. The number of banks with less than $100 million in assets has declined by more than two-thirds since 1995 — due in large part to big banks usurping market share.
Topics: Contract Negotiations, community banks, Credit Unions, M&A
New Beginnings: Strategies to Avoid Mistakes of the Past with Core Banking Software Suppliers
It's the beginning of a new year, and that equates to an opportunity for a fresh start. For community banks and credit unions, this means the chance to review what obstacles have held them back from competing with the big banks on a level playing field — and to develop strategies to overcome those hurdles in 2018.
Since 1994, the loan market share held by big banks (financial institutions with assets greater than $10B) has relentlessly increased from 50 percent to approximately 80 percent. This has left community banks and credit unions with less than a quarter of the overall market — an already meager slice of the pie that is steadily shrinking.
So what happened?
Topics: Contract Negotiations, community banks, Credit Unions, M&A