The Financial Brand Insights - Winter 2021

These technology companies can no longer be ignored. For instance, JPMorgan Chase CEO Jamie Dimon shows in his latest annual shareholder letter how, over the course of just a decade, Big Tech has ballooned from $0.5 trillion to $5.6 trillion, payments companies have ballooned from $0.1 trillion to $1.2 trillion, and private and public fintech companies have ballooned from being essentially non-existent to $0.8 trillion — all of which are encroaching on traditional banking. In addition, consumer sentiment is changing quickly, particularly in the wake of the Covid-19 pandemic. To illustrate, the percentage of consumers who say they trust banks and credit unions most to handle their financial needs plummeted over the course of one year, while the same period showed large gains for tech companies. Over the past year, people often had no choice but to use digital banking products, and their habits changed as a result. As we illustrate in our Ultimate Guide to the Top 2021 Bank Challenges, 87% of consumers say they visit their financial institution’s branch less often than they did before the Covid-19 pandemic, while 89% say they use mobile banking more often. The shift to digital banking has accelerated faster than anyone anticipated. So if you decide you’re just going to hold off on moving your financial data strategy forward, or just coast along where you are today, you might be surprised by how quickly technology companies move ahead to meet customer demands. ALMOST 90%

REASONS Financial Institutions Can’t Let Mergers Stall Innovation

By MX

The number of banking mergers and acquisitions worldwide rose dramatically in the last year, from 619 in 2019 to 1,316 in 2020, according to Statista . And even though the number of bank mergers in the United States has generally slowed since the 1980s, the total number of banks in the U.S. has dropped from more than 18,000 to less than 5,000 today — overwhelmingly because of mergers and acquisitions. Anyone who’s been involved in one of these mergers knows that the process can throw individual projects into disarray and even paralysis. You have a clear line of sight into how to implement a certain technology at your bank or credit union, and then — boom! — suddenly you don’t know how the team you’re working with will sit with your decisions, much less how you’ll sit with theirs. What if your systems don’t align? What if someone has a totally different idea about how to proceed? What if your budgets are focused on completely different things? Despite the difficulties inherent in any merger or acquisition, it’s critical to not give in to paralysis when it comes to your data strategy. Here are three reasons why: 1. Your NewCompetitors Won’t Wait For You You can be certain that your competitors won’t wait around for you to figure out your financial data strategy — especially new competitors from technology companies, which are used to moving quickly. In the past, this wasn’t as pressing an issue since for the most part people didn’t have extensive choices about where they banked. They generally had to choose whatever institution had branches nearby. But today, anyone can search for a banking product — mortgages, payments, deposit accounts — on their phone and immediately see dozens of results on the first page alone.

There was a time when pausing tech projects because of a merger was probably a good idea. No longer. In fact, quite the opposite is true now. Banks and credit unions that don't forge ahead may rapidly lose ground to tech-oriented competitors that cater to very different consumer expectations. It could be difficult to recover from such a setback.

of people are visiting branches less than they did before Covid. And equally as many are now relying on mobile banking.

THE FINANCIAL BRAND INSIGHTS WINTER 2021