7 ways banking providers must simplify before skinny fintech disruptors eat them alive
As Amazon, Google and other outsiders sharking the edges of the banking industry, traditional financial institutions need simplify and narrow their scope. Listen to this former fintech exec who switched sides to join a large credit union as he argues why banking providers can't afford to be good at everything. Here are his seven suggestions to help you identify your unique strategic strengths and build on them.
Traditional banks and credit unions spend way too much time trying to tackle so many problems that they can’t become truly great at any one thing. By contrast, take one of the most successful disruptors, PayPal. PayPal began as a company that just moved money between two accounts securely. Years later, at around a $106 billion market cap, PayPal continues doing the same thing — moving money between two accounts.
It might be doing a little more than that at this point, but PayPal became exceptional at moving money between two accounts and built a great business and brand around that.
Key Question: What does your financial institution do exceptionally well?
Granted, most financial institutions aren’t trying to be PayPal. But financial institutions that lack a niche — an area of focus that they’re really good at — will crumble.
Just Imagine the world five years from now. Amazon — along with many other large brands — has already rolled out its financial services arm. In five years, 60-80 million Americans will be Amazon Prime members. Let’s say 10% adopt an Amazon Checking account. That’s on top of those that are already flocking to Amazon’s amazing credit card.
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