President & CEO at @ccgcatalyst years of experience in #banking, #fintech, management, consulting and strategy. Speaker inquiries : ccgcatalyst.com
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Articles by Paul Schaus
The Tokenized Economy Is Here. Banks Are Writing the Playbook.
From global banks to credit unions, financial institutions are racing to convert deposits, payments and assets into programmable digital instruments, and writing the operating playbook that consultants in every industry will soon need to follow. Paul Schaus, Founder and Managing Partner, CCG Catalyst Consulting. In my last article published for Consulting Magazine, I argued that Industrial Loan Company charters (ILCs) were creating a new advisory frontier where banking meets commerce.
The Race for Banking Charters: Why ILCs Can Be a Growth Engine for Advisory Firms
Paul Schaus, CEO and Founder, CCG Catalyst Consulting. As commercial giants like PayPal and Ford navigate the complex path to FDIC insurance, the demand for consultants to bridge the gap between commerce and compliance is skyrocketing—creating a critical need for expertise in risk management, CRA strategy and charter application navigation. Paul Schaus, CEO and Founder of CCG Catalyst Consulting shares his distinct insight into the trend.
The Banker's Technology Playbook
Innovation in bank technology is important for institutions of all sizes. While progress is often concentrated among the largest money center banks, this progress drives trends across infrastructure, operations, and the customer experience that are relevant to everyone. At the boardroom and senior management levels, executives need to understand this and decide how to react to those trends.
What I Heard In Washington
As a Washingtonian who escaped to Arizona after a successful banking career in the nation’s capital to build and scale a consulting firm, I had the privilege to join the bankers from the Western States in DC recently. I attended various meetings with the ABA and regulatory agencies (OCC, FRB, FDIC, and CFPB) as well as a meeting at the White House with Chairman Jared Bernstein, United States Council of Economic Advisers.
Fintech News Issue #256
Top Stories Credit card giant Visa has granted its principal membership to a cryptocurrency company for the first time. The explosion of fintech startups in the last decade has transformed predictions that they would be disruptors to now, partners in banking — a critical element to the next evolution in financial services in the 2020s.
Banking Innovation Push without Cultural Shift is a Failing Formula
Subscribe to The Financial Brand via email for FREE! Banks and credit unions focus more than ever on innovation to stay relevant and profitable, and they are spending more on it, but in some ways, building an innovative culture presents leaders with paradoxes.
Financial Institutions Must Sell Public on AI Benefits or Risk Losing Them
Subscribe to The Financial Brand via email for FREE! Artificial intelligence and automation are starting to help financial institutions’ bottom lines. However, pushing AI usage beyond early adopters to a greater share of the industry will require surmounting a vital obstacle: consumers’ broad lack of trust in AI systems. Part of the challenge is terminology.
Why Customers Switch Banks
Banks are in an unprecedented era of intense competition for customers. Barriers to switching primary banks are lower than ever for both consumers and businesses. Customers are also constantly bombarded with offers from competitors through online, mail, and TV. As the battle for account holders’ dollars and attention heats up, it’s critical for banks to ...Read More
Banks Should Cash In On Cybersecurity
Banks have been at the forefront of cybersecurity for years, investing heavily to protect some of their clients’ most valuable and sensitive information. Such heavy investment in cybersecurity is increasingly the cost of doing business in financial services, but it also presents an opportunity for banks to generate a return on that investment by earning revenue from the cybersecurity solutions they develop.
How to make P2P payments pay for banks
By offering free person-to-person payments, Venmo was able to gain an early edge, and set the customer expectation for free P2P transactions. Since banks have banded together through the Zelle network to take on Venmo in P2P payments, the question of how to monetize P2P transactions has concerned the industry. Banks gain a significant share of their revenue from transaction fees. Naturally they wonder how to monetize a service that consumers have been receiving for free.
Are you really doing omnichannel?
Banks know that customers who use multiple channels are more engaged and generate more revenue for them, but many institutions aren’t building true omnichannel organizations. Over the past few years, as omnichannel has become a trending topic in the industry, many players have zeroed in on the digital customer experience. This focus has come at the expense of more important aspects of the omnichannel model.
3 key tech trends to watch
2017 was an important year in the development and adoption of AI and blockchain, but both technologies remain very nascent, and many challenges remain for financial institutions looking to maximize their potential. In 2018, banks already active in these areas will look to make the most of the major investments they’ve made in these technologies, while others will take their first steps in exploring them.
AI-driven banks must start with fundamentals
Artificial intelligence has been among the hottest topics in banking in 2017. Nearly all of the biggest financial institutions have made a major announcement around new AI applications this year. This is not all hype—few industries are as vulnerable to disruption by AI as banking. That’s because banking is a process- and data-driven industry. AI tools are ideal for leveraging data to optimize processes.
Chatbots create new fraudster bait
Make no mistake about it: Facebook wants to replace your apps. All those mobile apps crowding up your smartphone screen should be banished and replaced by chatbots, according to the tech giant. That’s the pitch Facebook has delivered to companies across various industries looking to improve their customer engagement. Many companies are buying the pitch—there are now more than 100,000 bots in Facebook Messenger that allow companies to take orders and answer customer inquiries.
After the acquisition, it’s all about customers
Bank executives contemplating a merger or acquisition must evaluate a variety of factors before deciding to move forward with the deal. But what is often left out of the decision-making process is the impact on customers. How will the merger or acquisition affect relationships with customers? How can the combined organizations do a better job of retaining customers and building loyalty by reassuring them during the merger and acquisition process?
Multilayer biometrics to be next-generation authentication
The proliferation of smartphones and the onset of mobile payments has brought biometrics to the forefront of security for financial transactions. This is a natural progression forged by the migration of more banking activities to mobile devices that are growing more advanced and equipped with more types of sensors that can accommodate biometric authentication.
The real promise of real-time payments (it's not the fees)
At least 30 countries have either implemented a real-time or near-real-time payments system or are in the midst of implementing or planning one. In the U.S., the Federal Reserve is leading a multiyear effort to develop a faster payments system, while The Clearing House and fintech giant FIS announced plans in May to run a nationwide real-time payments system pilot during the first quarter of 2017. Big banks are also trying to stake their claim in offering faster payments.
Are you watching the right fintech players?
The growth in alternative lending over the last few years has been driven by data. Alternative lenders are using new types of data for determining creditworthiness to target borrower segments that have been underserved by banks, including small businesses. Banks started pulling back on small business lending during the financial crisis, and bank loans of less than $1 million to small businesses have yet to recover to pre-recession volumes.
The Truth About Core
Why aversion to conversion is bad for your bank. Other than the words "financial meltdown," the two words that strike the most fear in bankers are "core conversion." Yes, I'm talking about the multi-year, multimillion-dollar projects that most bank technology professionals won't touch with a 10-foot pole. It's not just the project length and cost that bankers fear. It's also the perception that a conversion to another core vendor would put the bank in the regulatory spotlight.
Regulators Should Force Fintechs to Protect Consumers
When looking at the new competition arising from fintech companies, many bankers understandably feel that they are at an unfair disadvantage. Banks must deal with a constricting regulatory environment, but regulators don’t always apply the same standards to fintech companies. So bankers have lobbied regulators to take a more aggressive stance towards their new competitors.
New regulatory territory for CFPB: Data security
The CFPB’s action against online payment provider Dwolla – its first action related to data security – is a game changer. The CFPB zeroed in on Dwolla for deceiving consumers about its data security practices and the safety of its online payment system. The bureau ordered the Des Moines, Iowa-based Dwolla, an agent of the $65 billion Houston-based Compass Bank and $2.7 billion, Waterloo, Iowa-based Veridian Credit Union to pay a $100,000 penalty and fix its security practices.
What millennials really want
A banking robot. A refrigerator that manages finances. Synchronized billing. Deposits automatically distributed into categorized accounts. Taxes filed automatically. Those are just a few of the features that millennials told us they expect from the bank of the future. Sound far-fetched and unrealistic? Perhaps, but consider the transformations that are occurring in other industries outside of financial services.
5 questions: Are you ready to offer a mobile wallet?
If you offer your customers a bank-branded mobile wallet, more than half (51%) would be likely or very likely to use it.
Don’t Trust Your Future to Your Core Vendor
Rather than wait for innovation to come from their core vendors, banks need to stake out their own vision for the future. It’s become too easy for small and medium-sized banks to depend on innovation coming from their core vendors. Most of these institutions have limited resources for developing their own solutions; and whatever dollars they can throw at new innovations are dwarfed by the amounts that the big banks can commit.
Legacy Systems Prevent Banks From Delivering on Digital Promises
While the giants of the digital world are achieving new successes on flexible architectures, banks are falling further behind on their legacy systems. Legacy systems are one of the biggest barriers keeping banks from imitating the digital experiences provided by the likes of Apple, Google, and Amazon. These companies deliver more personalized services faster than banks can, and the competition among them means they have to constantly refine those experiences and deliver them more quickly.
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