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Bankruption: How Community Banking Can Survive Fintech
Community banking can flourish in the face of fintech and global competition with a fresh approach to strategy Bankruption + Website offers a survival guide for community banks and credit unions searching for relevance amidst immense global competition and fintech startups. Author John Waupsh is the Chief Innovation Officer at Kasasa, where he helps spearhead financial product development and implementation across hundreds of institutions. In this guide, he draws on more than a decade in the industry to offer clear, practical advice for competing with the megabanks, direct banks, non-banks, and financial technology companies.
The discussion separates futurist thinking from today's realities, and dispels common myths surrounding the U.S. community banking model in order to shed light on the real challenges facing community banking institutions. It follows with clear solutions, proven strategies, and insight from experts across banking and fintech. All arguments are backed by massive amounts of data, and the companion website provides presentation-ready visualizations to help you kickstart change within your team.
In the U.S. and around the globe, fintech companies and non-banks alike are creating streams of banking services that are interesting, elegant, and refreshing--and they're winning the hearts and minds of early adopters. Not a one-size-fits-all approach, this book offers many different tactics for community banks and credit unions to compete and flourish in the new world.
Analyze fintech's threat to the community banking model Learn where community banking must improve to compete Disprove the myths to uncover the real challenges banks face Adopt proven strategies to bring your organization into the future Community banks and credit unions were once the go-to institutions for local relationship banking, but their asset share has been on the decline for three decades as the big banks just got bigger. Now, fintech companies are exploiting inefficiencies in the traditional banking model to streamline service and draw even more market share, as community banking executives are left at a loss for fresh tactics and forward-looking strategy. Bankruption + Website shows how community banks can be saved, and provides a proven path to success.
The discussion separates futurist thinking from today's realities, and dispels common myths surrounding the U.S. community banking model in order to shed light on the real challenges facing community banking institutions. It follows with clear solutions, proven strategies, and insight from experts across banking and fintech. All arguments are backed by massive amounts of data, and the companion website provides presentation-ready visualizations to help you kickstart change within your team.
In the U.S. and around the globe, fintech companies and non-banks alike are creating streams of banking services that are interesting, elegant, and refreshing--and they're winning the hearts and minds of early adopters. Not a one-size-fits-all approach, this book offers many different tactics for community banks and credit unions to compete and flourish in the new world.
Analyze fintech's threat to the community banking model Learn where community banking must improve to compete Disprove the myths to uncover the real challenges banks face Adopt proven strategies to bring your organization into the future Community banks and credit unions were once the go-to institutions for local relationship banking, but their asset share has been on the decline for three decades as the big banks just got bigger. Now, fintech companies are exploiting inefficiencies in the traditional banking model to streamline service and draw even more market share, as community banking executives are left at a loss for fresh tactics and forward-looking strategy. Bankruption + Website shows how community banks can be saved, and provides a proven path to success.
291 pages, Hardcover
First published January 1, 2016
6 people are currently reading
50 people want to read
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Displaying 1 - 3 of 3 reviews
August 26, 2019
Excellent book on future of banking and what bank leaders should be doing and watching.
January 13, 2021
Background:
John is regarded as a renowned speaker at top FinTech and banking conferences for his ability to balance straight-talk consultation with research-backed ideation.
—————————————————————————————
Succinct Personal Review:
Not only did I have the privilege of meeting John Waupsh at an Ohio conference we hosted last year, but I also had the privilege to grab a few drinks with him in the evening to pick his brain more. At the time, I hadn't read his book, although I wish I had. This book is a great compilation of his ideas and a true reflection of him as a person. He was more than willing to share his expertise with me that night, and I see, now, how many of his peers are willing to share their expertise throughout the book. If you're in the banking industry, I highly recommend picking this book up sooner rather than later.
—————————————————————————————
Less talk, more action…
“My passion for the community banking industry is no secret, but all the passion in the world isn’t enough to return relevance to a dying model.”
“Tradition, habit, and the challenges of organizational culture change across a number of humans in a variety of locations can all reinforce slothful dormancy. There’s comfort in inactivity.”
“Our industry is too diverse, under too much transformation, with too many biases, and too many fortunes at stake to accept one line of thinking as gospel.”
“The future of banking is entertaining to read and lots of fun to listen to or debate at a conference, but it’s also not the best use of time for a banker who needs to drag her credit union or bank across the ever-widening chasm between yesterday and today.”
“When does the thing you’ve always done become the riskiest thing you could do?”
“The most important thing you can do, however, is evaluate all options, and then quickly execute.”
“The consumer is the change agent; fintech is the feedback.”
—————————————————————————————
Excerpts on banking trends…
“We shouldn’t let history be our guide to the future, but if one were to look in the past, one would find a very similar cycle of branch closures between 1989 and 1995, just prior to a boom in branch growth between 1995 and 2009.”
“If one bothered to research the data behind aforementioned stats, one would find that nearly the same number of institutions disappeared the six years preceding 2007 as the six years following.”
“Simply put, the operating model for most organizations is too costly to remain competitive into the future as is seen clearly in the efficiency ratio trends over the last 20 years.”
“We’re wired to measure, mitigate, manage, and minimize risk, and we develop policies and procedures to establish and spread best practices to ensure consistency and predictability.”
“They compare themselves to their peer group and get a false sense of security, because disruption is happening around the edges of the industry, where the game is being changed and the measurement bar is being raised.”
“But sometimes these life-changing scenarios can become the soul-jerking awakening that we all needed. The worst situation can turn into a good indeed, with the right attitude and strategy.”
“Disruption does not necessarily mean that the entire industry and all of its current participants will cease to exist. Disruption innovation changes the game by creating new markets and new relationships between organizations and individuals, and that is already happening.”
“The real problem with retail banking today is the requirement of human engagement.”
“All this, when new data sources, predictive analytics, artificial intelligence, machine learning, risk models, and user experiences have all begun to make lending and investing vastly more efficient on all sides of the transaction, but are shunned as alternative models by community institutions and their regulators.”
“Digital convenience enjoyed by American consumers is trend.”
“Any prediction toward the ‘big’ future will prove itself true at some point in the horizon of time, but we should not confuse that far off world with today’s – or even the next 10 years’ – reality.”
“After all, given a long enough time horizon, futurists are never wrong – just early.”
—————————————————————————————
Excerpts on thought-process changes…
“With each of these point solutions, reliability was the forethought, scalability was an after-thought, conversion was the nastiest thought, and integration was a naught-thought.”
“Associations will need to evolve their practices, policies, and procedures to reflect the new pace of change in the world of compliance, fintech, and consumer expectation.”
“Or perhaps a better question, how much risk does the expensive branch network impose on a small institution where faster, cheaper, more efficient, and more easily accesses methods of services (mobile banking) are pervasive?”
“Thankfully, inflection points such as bankruption require the established players to shed the ‘what got us this far’ thinking, invest in tools that improve efficiency, and increase scale, discuss uncomfortable changes to strategy, and, simply, be inspired to test new things.”
“By working hard to be transparent with users who want to be on the bleeding edge of their banking experience, community institutions can experiment and evolve, and not be left in the cold.”
“Transparent, quick to respond, and very sociable, our bank needed all of these qualities to become who it is today.”
—————————————————————————————
Excerpts on strategy…
“These days, well-timed, well-placed, well-modeled informed digital interactions build relationships, trust, and understanding. This all but ensures any strategy relying solely on physical proximity is a liability.”
“Today’s successful community financial institutions demand strong skill sets and coordination across technology, marketing, analytics, et. al., who must all be speaking the same language.”
“Rather than going after business held by the large, established banks, challengers are finding niche markets not well-served by the big players, targeting them, developing a specific product or service to meet their needs, and, typically, relying on digital delivery.”
“The successful community banker of tomorrow knows that data drives understanding and therefore happier accountholders, and adopting an omnichannel strategy is a big step forward for today’s siloed and branch-laden financial institutions in the United States.”
“The most successful banks will be focused on collaboration, agility, innovation, analytics, and above all on going beyond digital and transforming into becoming a Cognitive Bank.”
“It’s important to sift through the hype, rationalize the data, and test within market to determine if you are dealing with a feature or a valuable product.”
“By seeking empathy, becoming hyperlocal, taking innovation seriously, and collaborating, financial institutions at least have a chance.”
—————————————————————————————
Excerpts on collaboration and partnership (within your organization and with third-party providers)…
“… as data and knowledge get further commoditized and mechanized, the most important people on your team are those skilled in the art of human collaboration and team building.”
“.. by simply nurturing the best talent, it attracts more of the best talent because smart, hard-working people like to work with other smart, hard-working people.”
“Research and data are great, but having the people who live and breathe this stuff every day is a whole new ball game.”
“Partnering with established fintech companies and startup companies can be an effective way to scale expertise and to ensure your institution evolves with and for your accountholders overtime.”
“The sophisticated skills and software offered by third-party providers are quickly becoming must-haves for future success, security, and reliability.”
“Partnerships mean you don’t have to do all the work and shoulder all the expense yourself.”
—————————————————————————————
Excerpts on being customer centric…
“The days of being everything to everyone are over. We must all choose to be one thing to someone before we are nothing to no one.”
“If you are relevant to everyone, you are likely relevant to no one.”
“Words like value and customer service have to be defined on the customers’ terms, not ours, and we have to pay more attending to what they do than what they say.”
“A successful pivot requires customer-obsession and in-depth knowledge of the customer journey.”
“Behavioral data should be as aggressively pursued as financial data.”
“The banking model for the future will be customer-centric as opposed to being driven by products and services. This model will be enable an information-driven and value-centric relationship as opposed to being based on the bank’s needs.”
“… teaching clients something, rather than matching products to their needs, is the most effective approach to sales in all industries.”
“You can’t change a human, but you can alter his environment and his experience.”
“The path to success in the future of the banking industry for community banks and credit unions is competing on customer intimacy.”
John is regarded as a renowned speaker at top FinTech and banking conferences for his ability to balance straight-talk consultation with research-backed ideation.
—————————————————————————————
Succinct Personal Review:
Not only did I have the privilege of meeting John Waupsh at an Ohio conference we hosted last year, but I also had the privilege to grab a few drinks with him in the evening to pick his brain more. At the time, I hadn't read his book, although I wish I had. This book is a great compilation of his ideas and a true reflection of him as a person. He was more than willing to share his expertise with me that night, and I see, now, how many of his peers are willing to share their expertise throughout the book. If you're in the banking industry, I highly recommend picking this book up sooner rather than later.
—————————————————————————————
Less talk, more action…
“My passion for the community banking industry is no secret, but all the passion in the world isn’t enough to return relevance to a dying model.”
“Tradition, habit, and the challenges of organizational culture change across a number of humans in a variety of locations can all reinforce slothful dormancy. There’s comfort in inactivity.”
“Our industry is too diverse, under too much transformation, with too many biases, and too many fortunes at stake to accept one line of thinking as gospel.”
“The future of banking is entertaining to read and lots of fun to listen to or debate at a conference, but it’s also not the best use of time for a banker who needs to drag her credit union or bank across the ever-widening chasm between yesterday and today.”
“When does the thing you’ve always done become the riskiest thing you could do?”
“The most important thing you can do, however, is evaluate all options, and then quickly execute.”
“The consumer is the change agent; fintech is the feedback.”
—————————————————————————————
Excerpts on banking trends…
“We shouldn’t let history be our guide to the future, but if one were to look in the past, one would find a very similar cycle of branch closures between 1989 and 1995, just prior to a boom in branch growth between 1995 and 2009.”
“If one bothered to research the data behind aforementioned stats, one would find that nearly the same number of institutions disappeared the six years preceding 2007 as the six years following.”
“Simply put, the operating model for most organizations is too costly to remain competitive into the future as is seen clearly in the efficiency ratio trends over the last 20 years.”
“We’re wired to measure, mitigate, manage, and minimize risk, and we develop policies and procedures to establish and spread best practices to ensure consistency and predictability.”
“They compare themselves to their peer group and get a false sense of security, because disruption is happening around the edges of the industry, where the game is being changed and the measurement bar is being raised.”
“But sometimes these life-changing scenarios can become the soul-jerking awakening that we all needed. The worst situation can turn into a good indeed, with the right attitude and strategy.”
“Disruption does not necessarily mean that the entire industry and all of its current participants will cease to exist. Disruption innovation changes the game by creating new markets and new relationships between organizations and individuals, and that is already happening.”
“The real problem with retail banking today is the requirement of human engagement.”
“All this, when new data sources, predictive analytics, artificial intelligence, machine learning, risk models, and user experiences have all begun to make lending and investing vastly more efficient on all sides of the transaction, but are shunned as alternative models by community institutions and their regulators.”
“Digital convenience enjoyed by American consumers is trend.”
“Any prediction toward the ‘big’ future will prove itself true at some point in the horizon of time, but we should not confuse that far off world with today’s – or even the next 10 years’ – reality.”
“After all, given a long enough time horizon, futurists are never wrong – just early.”
—————————————————————————————
Excerpts on thought-process changes…
“With each of these point solutions, reliability was the forethought, scalability was an after-thought, conversion was the nastiest thought, and integration was a naught-thought.”
“Associations will need to evolve their practices, policies, and procedures to reflect the new pace of change in the world of compliance, fintech, and consumer expectation.”
“Or perhaps a better question, how much risk does the expensive branch network impose on a small institution where faster, cheaper, more efficient, and more easily accesses methods of services (mobile banking) are pervasive?”
“Thankfully, inflection points such as bankruption require the established players to shed the ‘what got us this far’ thinking, invest in tools that improve efficiency, and increase scale, discuss uncomfortable changes to strategy, and, simply, be inspired to test new things.”
“By working hard to be transparent with users who want to be on the bleeding edge of their banking experience, community institutions can experiment and evolve, and not be left in the cold.”
“Transparent, quick to respond, and very sociable, our bank needed all of these qualities to become who it is today.”
—————————————————————————————
Excerpts on strategy…
“These days, well-timed, well-placed, well-modeled informed digital interactions build relationships, trust, and understanding. This all but ensures any strategy relying solely on physical proximity is a liability.”
“Today’s successful community financial institutions demand strong skill sets and coordination across technology, marketing, analytics, et. al., who must all be speaking the same language.”
“Rather than going after business held by the large, established banks, challengers are finding niche markets not well-served by the big players, targeting them, developing a specific product or service to meet their needs, and, typically, relying on digital delivery.”
“The successful community banker of tomorrow knows that data drives understanding and therefore happier accountholders, and adopting an omnichannel strategy is a big step forward for today’s siloed and branch-laden financial institutions in the United States.”
“The most successful banks will be focused on collaboration, agility, innovation, analytics, and above all on going beyond digital and transforming into becoming a Cognitive Bank.”
“It’s important to sift through the hype, rationalize the data, and test within market to determine if you are dealing with a feature or a valuable product.”
“By seeking empathy, becoming hyperlocal, taking innovation seriously, and collaborating, financial institutions at least have a chance.”
—————————————————————————————
Excerpts on collaboration and partnership (within your organization and with third-party providers)…
“… as data and knowledge get further commoditized and mechanized, the most important people on your team are those skilled in the art of human collaboration and team building.”
“.. by simply nurturing the best talent, it attracts more of the best talent because smart, hard-working people like to work with other smart, hard-working people.”
“Research and data are great, but having the people who live and breathe this stuff every day is a whole new ball game.”
“Partnering with established fintech companies and startup companies can be an effective way to scale expertise and to ensure your institution evolves with and for your accountholders overtime.”
“The sophisticated skills and software offered by third-party providers are quickly becoming must-haves for future success, security, and reliability.”
“Partnerships mean you don’t have to do all the work and shoulder all the expense yourself.”
—————————————————————————————
Excerpts on being customer centric…
“The days of being everything to everyone are over. We must all choose to be one thing to someone before we are nothing to no one.”
“If you are relevant to everyone, you are likely relevant to no one.”
“Words like value and customer service have to be defined on the customers’ terms, not ours, and we have to pay more attending to what they do than what they say.”
“A successful pivot requires customer-obsession and in-depth knowledge of the customer journey.”
“Behavioral data should be as aggressively pursued as financial data.”
“The banking model for the future will be customer-centric as opposed to being driven by products and services. This model will be enable an information-driven and value-centric relationship as opposed to being based on the bank’s needs.”
“… teaching clients something, rather than matching products to their needs, is the most effective approach to sales in all industries.”
“You can’t change a human, but you can alter his environment and his experience.”
“The path to success in the future of the banking industry for community banks and credit unions is competing on customer intimacy.”
This entire review has been hidden because of spoilers.
February 12, 2018
A wildly informative history of banking in the United States, with a hopeful outlook for consumer experience. From this consumer: shame on you mega banks, and good luck, community financial institutions!
A wildly informative history of banking in the United States, with a hopeful outlook for consumer experience. From this consumer: shame on you mega banks, and good luck, community financial institutions!
A wildly informative history of banking in the United States, with a hopeful outlook for consumer experience. From this consumer: shame on you mega banks, and good luck, community financial institutions!
Displaying 1 - 3 of 3 reviews