A robot with the Euro coins, piggy bank and safe on the table. 3d illustration.
OBSERVATIONS FROM THE FINTECH SNARK TANK
In the movie All The President’s Men, Woodward and Bernstein meet their informant in a parking garage and are told: “Follow the money.”
If you want to know which technologies are hot in banking, you should do the same. The truly “hot” technologies in banking are the ones that financial institutions invest in—which are not always the ones the pundits talk about.
What’s Hot For 2020?
At the end of the past six years, Cornerstone Advisors has surveyed financial institutions to find out where their technology dollars will go in the coming year.
In the new What’s Going On in Banking 2020 study, the top five technologies for 2020 are: 1) Digital account opening; 2) P2P payments; 3) Video collaboration/ marketing; 4) Cloud computing; and 5) Application programming interfaces (APIs).
1) Digital Account Opening
Digital accounting opening (DAO) is the most popular technology for the third year in a row, with a third of banks and credit unions expecting to add new or replacement systems in 2020. An additional 46% plan to modify or enhance their existing DAO systems, up from the 39% who said they would do so in 2019.
The continued focus on digital account opening begs the question: Why can’t banks get digital account opening right?
There are a number of reasons but the primary cause is ineffective process design.
Many banks approach the account opening process from a regulatory compliance perspective. It actually takes very little information to get an account open. Banks should redesign the process to allow for the simplest account opening and funding possible—and then work on reducing risk and meeting regulations.
2) Person-to-Person (P2P) Payments
Roughly three in 10 institutions plan to select a new or replacement P2P payment tool in 2020. That percentage is down from the 35% who planned to do so in 2019. But the number of banks and credit unions looking to enhance or modify their P2P payment capabilities rises from 25% in 2019 to 40% in 2020.
This is good news for Zelle.
According to a study from S&P Global, Zelle is now the P2P payment provider in 21 of the 25 largest US banks—with two more planning to launch Zelle. In the next 45 largest banks, 21 are Zelle banks, with two more coming on shortly.
If more banks and credit unions adopt Zelle—and then follow PNC’s lead and shut out Venmo by locking out Plaid—consumers will increasingly find Zelle to be the most convenient P2P payment option to use, causing some switching behavior.
Consumers may not be thrilled about it—but it’s hard to imagine that they’ll switch banks as a result of it.
3) Video Collaboration/Marketing
This technology is new to Cornerstone’s study and enters the charts with a little more…
