2017 Banking Trends: Banking is Shifting to Online and Mobile – Even in the Commercial Space
Chuck Garcia, Director of Commercial Deposits and Treasury Management at Associated Bank, sees the digital space as being fertile ground for growth and new opportunities for commercial banking in 2017.
Trend: Mobile Making its Way to Commercial Banking
Retail banking consumers have long been adapters of mobile devices to make their banking lives easier. Now, the same flexibility people have in the personal banking realm is making its way to commercial banking.
"I think you're seeing it already in certain areas," Garcia said. "I can speak for our bank, mobile type of payments, doing transactions over mobile devices as security improves, getting balances, so many of the things that consumers utilize today, remote deposit via your cell phone, things of that nature, very much are finding their way into the commercial market."me activity in this economy through infrastructure through tax reform through regulatory reform, we might see that inflation move and that interest rate move up maybe 50, 75 basis points next year."
Associated Bank's commercial clients are clamoring to make full use of digital offerings, Garcia notes.
"They're more demanding (that the bank serve these digital capabilities), I'd say," Garcia said. "As technology changes, the expectations are (that) you change along with it. Certainly consumers are that way, but I'd say they're less likely to move and more slow to move, because they're so intertwined with their banks." Garcia said commercial clients will make that move to another institution if their needs aren't being met."
Trend: Continuing to do More Online (And Securely)
According to Garcia, meeting clients where they are – which increasingly is online – is essential.
"I think the use of the internet continues to just be wide open," Garcia said. "I think exploring different ways to send information, initiate transactions, communicate with your clients, be they consumer or commercial, it continues to be wide open, and exploring those and securing that environment too is very, very important to us."
Determining what each client desires is critical to best serving them, Garcia asserts.
"I think it depends on the client needs and what their wants are," he said. "Some people want to look across the table and believe that you're listening to their needs, and I think that's a very, very important element. For some subset, they just want to interact on email. And so I think being able to provide different channels for people to communicate with you and being able to adjust and adapt to that is something that is, for a bank our size, is really, really critical. We really have to be able to hit on all fronts."
What about commercial money transfers via mobile?
"I think the advent that we're all a little cautious on is money movement," Garcia said. "In particular in my case, I will tell you as it relates to corporates and commercials, actual money movement from Bank A to Bank B is still a bit of an unknown territory. Some banks offer it. I think that's an arena you need to be very concerned and careful about. But I think it's coming. And as security continues to improve, I think you'll see that become more prevalent in the marketplace. (It's) very prominent today in the consumer market."
For Garcia and his team, security is paramount.
"The corporate to corporate type of payments, it is happening … (but) in our particular case we're moving pretty slow on that front, just because of the hacking and the security elements." Given time, Garcia said this will definitely be the future.
"I think that will become pretty mainstream in the coming years," he said.
Trend: Financial Technology
"The FinTechs are getting a lot of play," Garcia said. "… I think it's an interesting environment for banks. Very large banks. I saw JPMorgan just invested in a couple of organizations recently. Very large banks are beginning to either partner or acquire those, because of the technology they're able to bring in immediately is significant."
"I think the FinTechs are definitely a disrupter in consumer and in the commercial markets, and I think they'll continue to be. I think they can move much more quickly than we as financial institutions can."
Trend: Social Media
Social media will continue to provide channels for disseminating information and conducting conversations. Garcia notes it's important to be careful using social channels.
"The utilization of social media can flame out very quickly," Garcia said. "I mean, if you do something inappropriate, for example, it can catch fire very quickly because people can spread a lot of information very quickly. Conversely, you can use it to your benefit and if things are going well or you have a particular thing that you did well for a client, it can also have a very positive influence."
"Especially in the consumer pace, utilization of Twitter (and) Facebook I think is more apt to be utilized," Garcia said. "I think in the corporate market, LinkedIn is certainly an element where people connect more professionally."
Garcia and his team work hard to stay on top of the trends clients are latching onto.
"You have to be prepared to understand trends. It's really key in a product organization," Garcia said. "We are responsible for that on the commercial side, in my unit. It's really important to not focus not just on today, but what are the trends coming down the line. What are the technologies that you need to invest in. it's a balance not to get too far ahead of that curve, because you might invest in things that don't become mainstream in the marketplace. But you have to be prepared to adjust to trends and what people's desires are."