Opportunity or obstacle? This is the decision bank and credit union leadership have almost daily, especially in the face of emerging technology trends.
That was the topic of our latest educational webinar, “Core Marketing Update: Disrupters Are Changing Bank Technology.”
During the hour discussion, David Saylor, the founder of Genesys Technology Group, LLC, touched upon the changing banking landscape. He demonstrated how the fintech industry disruptors typically thought of as strictly challenges or threats could be opportunities to deliver technology that consumers demand. While at the same time–also open additional revenue streams.
Millennials and Gen Z Accepting of Digital Banking Technology
Take, for instance, attracting a younger demographic increasingly turning to non-traditional institutions for their banking needs.
According to a 2022 Cornerstone Advisors report commissioned by FICO, the percentage of Gen Z, Millennial, and Gen X consumers in the United States that consider a digital bank their primary checking account provider has more than doubled, to 12% of customers since 2020. In fact, only 25% of Gen Z consumers use a megabank as their primary checking account source.
“Millennials and Gen Z are more likely to use digital banks for their primary checking accounts than a community bank or a credit union,” said Saylor. “I believe we have an opportunity over the next three to five years not to let this prediction come true. In fact, I think we can change our sales; we can change the way we think about our technology and the way we think about managing our key strategic high-risk vendors.”
And by adopting the technology, the big three, Fiserv, FIS, and John Henry, are providing to neo-banks and fintech companies, credit unions, and community banks will be able to position themselves as local with the power of the digital universe.
“Our technology landscape is changing, and it’s all because of the neo banks,” he told the audience. “There are about 60 neo banks and 10,700 fintechs, and they all need microservices, and who is better to provide those in the US market today than the big three.”
Banking Technology Provides Opportunity for Banks and Credit Unions
And this shifting landscape is opening opportunities for community banks and credit unions to work with fintech companies and provide more services for customers and members—as long as their core technology gets up to speed.
“Fintechs cannot tolerate the legacy systems that we’re shackled to. They need flexible open systems that support innovation speed and are developer friendly,” said Saylor. “We can’t say that about the systems we deploy today, but they’re paving the way to microservices.”
Watch an on-demand version of this webinar to learn how embracing emerging technology can help transform community banks and credit unions into a digital finance landscape.
If you’d like to learn even more–check out our previous webinars here.