Institutions want to begin their digital transformation strategy and acquire the benefits of virtual banking but they don’t know where to start. This presentation discusses the technological and contractual barriers that await, and discusses what other banks are going to solve these problems. Includes examples of omni-channel banking, mobile first and basic functions of a virtual bank.
2. 2
AARON SILVA
CEO of Paladin fs & The Golden Contract Coalition
Professional Negotiator & Industry Disrupter
$108 Million in Merger
Value Accretion
$346 Million in
Cost Reduction
138 Wins / 0 Losses
Paladin Blue Book
Launched June 2016
Group “Offensive”
Negotiations
100+ Institutions
$500 Billion + 30 years
IT Contract Negotiations
3. 3
The world has changed rapidly,
with technology advancing our
society in countless ways
Unfortunately, the financial services
industry, especially retail banking,
hasn’t really kept up
That finally changes now
A CHANGING LANDSCAPE
4. 4
SMALL TO MIDSIZE BANKS ARE UNDER SEVERE PRESSURE
Smaller banks are being squeezed by big banks, big tech and fintech
In a Year of Tremendous Growth
Community Banks have Underperformed
Relative to Midsize and Large Banks
Large Banks Dominate FinTech Investment
8.74%
13.20%
15.75%
18.56%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Community Banks S&P 500 Midsize Banks Large Banks
HOW CAN COMMUNITY BANKS COMPETE AGAINST SCALE, CUSTOMERS AND TECHNOLOGY?
Information redacted due to confidentiality limitations. Please request full version by filling out the form,
or contact Paladin @ info@paladin-fs.com
5. 5
ANTIQUE SOFTWARE AND INFRASTRUCTURE
5 Core IT suppliers with a combined market cap of $90 billion own the banking technology industry.
Lack of innovation combined with
are crippling smaller financial institutions - who really have no choice
Long implementation processes Ridiculously high fees Long term, one-sided contracts
Fintech companies have difficulties to integrate to the legacy stack This can be addressed without converting to a new core
6. 6
DEFINE “FINTECH"
Disruptive –
competing with banks
Collaborative
”friendly” - enhancing
banks
Legacy – Fiserv, FIS,
Jack Henry, etc.
Over 10,000
companies worldwide
Larger banks are actively
investing, incubating,
partnering
Smaller banks counting on the
core vendors to innovate
VC/PE investment
continues to grow
7. 7
COMPETITIVE TECHNOLOGY “CHASM” IS LARGE
Friendly FinTech is moving to fill the IT CHASM created by Legacy Core & IT
Loan
Origination
Systems
Robot
Process
Automation
Online
Banking
Artificial
Intelligence
Advanced
Payments
Mobile
Banking
Decision
Intelligence
Block
Chain
Voice
Banking
Chat
BOTs
Crypto-
Currencies
IT CHASM
8. 8
IT CHASM
COMPETITIVE TECHNOLOGY “CHASM” IS LARGE
Friendly FinTech is moving to fill the IT CHASM created by Legacy Core & IT
Loan
Origination
Systems
Robot
Process
Automation
Online
Banking
Artificial
Intelligence
Advanced
Payments
Mobile
Banking
Decision
Intelligence
Block
Chain
Voice
Banking
Chat
BOTs
Crypto-
Currencies
9. 9
CORE IT CONTRACTS AND TECHNOLOGY
INTENTIONALLY LIMIT FUTURE COMPETITIVENESS
RESULT:
SMALL INSTITUTIONS ARE UNABLE TO COMPETE
WITH LARGER COMPETITORS
N
O
O
PEN
APIs
Information redacted due to confidentiality limitations. Please request full version by filling out
the form, or contact Paladin @ info@paladin-fs.com
10. 10
CORE IT CONTRACTS AND TECHNOLOGY
INTENTIONALLY LIMIT FUTURE COMPETITIVENESS
RESULT:
SMALL INSTITUTIONS ARE UNABLE TO COMPETE
WITH LARGER COMPETITORS
Alternative Competitive Suppliers
Fintech Suppliers & Solutions
Incentives for Innovation (The IT GAP)
Fair Market Pricing
Information redacted due to confidentiality limitations. Please request full version by filling out
the form, or contact Paladin @ info@paladin-fs.com
11. 11
WHERE CAN A BANK START THEIR FINTECH PLANNING?
Omnichannel Mobile-first Specialty / Niche Failure
12. 12
THE OMNICHANNEL VIEW
IoT Devices
Voice-Enabled (Alexa, Google, Siri, etc.)
Wearables
Mobile/Tablet
Desktop/Online
Social Media
ATM/ITMCall Center
Messaging/Chat
Text/Chatbot
Relationship Manager
Branch Teller
Third-Party Partnerships
13. 13
THE MOBILE-FIRST VIEW
IoT Devices
Voice-Enabled
(Alexa, Google, Siri, etc.)
Wearables
Mobile/Tablet
Social Media
Desktop/Online
ATM/ITM
Call Center
Messaging/Chat
Text/Chatbot
Relationship Manager
Branch Teller
Third-Party Partnerships
14. 14
THE 8 BASIC FUNCTIONS OF A VIRTUAL BANK
Transactional
Account Opening
Account Maintenance
Education
PaymentsTreasury Management
Problem Resolution
Lending
16. 16
Location Type Self-Service Branch Co-Tenancy Branch RM Production Office Wholesale Branch Automated Branches Flagship Branches
Percentage of Portfolio 10% 15% 20% 10% 35% 10%
Summary
Non-staffed locations with
signage for core metro or
remote areas that bankers
can staff appointment or
on a rotating schedule.
Café-style branches with
co-located other tenants
such as coffee shops,
professionals, shipping,
marketing firms,
technology or other.
Ground or low floor
office focused on
commercial loan and
deposit production.
Non-public branch target
cash intensive businesses.
Located within malls,
airports, retail centers
and office parks.
Similar to today’s
traditional branch but
with a smaller footprint,
universal teller platform
and enhanced tech.
Full-service branches
in metro and
suburban markets.
Percent Retail Focused 90% 90% 10% 0% 50% 30%
Avg. Size (sq. ft.) 250 500+ 1,000+ 1,500 2,000 3,500 to 5,000
Annual Direct Cost to
Operate
$55,000 $60,000 $560,000 $170,000 $550,000 $1,300,000
Universal Bankers (FTE) 0 0 1 0 3 4
Sales Staff 0.2 0.5 3+ 0 1 4
VIP Area No No Yes No No Yes
Accessibility 24/7 Extended hours Standard hours Not open to public 24/7 + Extended hours 24/7 + Standard hours
Interactive Tellers 1-3 1-3 2 No 3-5 3
Product Training Area No Limited Limited None Full Full
Interactive Video Wall No At high traffic locations No No Yes Yes
Cash Recyclers No No No Yes Yes Yes
Merchant Lockers Yes Yes Yes Yes Yes Yes
Other Elements
1-2 offices or meeting
rooms to be used by
bankers or remotely made
available for customer use.
Split rent and
increased traffic.
No transactions except
at ITMs.
Focused on treasury
management and remote
commercial support.
Operationally supports
wholesale, RM Production
offices and co-tenancy
branches.
Operationally supports
wholesale, RM Production
offices and co-tenancy
branches.
Largely self-service Educational focused
Largely, specialty industry /
product focused
Information redacted due to confidentiality limitations. Please request full version by filling out the form, or contact
Paladin @ info@paladin-fs.com
18. 18
FINTECH ADOPTION AND
INNOVATION PLANNING CHECKLIST
Educate your executive team and board of directors.
Assess your technology stack.
Determine where fintech can help.
Develop a 3-5 year fintech innovation plan.
Restructure Core & IT deals, improve access to
fintech. Reduce dependence on legacy suppliers.
Repurpose cost savings toward fintech initiatives.
Execute. Stick with it.
BRANCH TRANSFORMATION
PLANNING CHECKLIST
Restructure Core & IT contracts to improve access to
competitive Fintech suppliers.
Repurpose cost savings toward Fintech initiatives.
Build / buy data warehouse to create abstraction layer.
Develop 3-year roadmap to migrate 80% of
customers to online and mobile.
Reduce owned branches and increased use of leased
locations.
Develop a 10-year plan to alter your location portfolio.
Information redacted due to confidentiality limitations. Please request full version by filling out
the form, or contact Paladin @ info@paladin-fs.com
19. 19
BE THE LION
NEVER let your trust for
a vendor get in the way
of your critical thinking,
business sense and
fiduciary responsibility.
Your vendor will NEVER
volunteer something that
benefits you more than
them – you have to
know what to ask for.
NEVER go into a
multi-year, multi-million
dollar negotiation
without doing your
research and having
hard market intelligence
in your pocket before the
negotiation!
20. 20
NO COST, NO RISK CONTRACT & INVOICE ASSESSMENT
EMAIL US
Call Us: 877.746.4859
info@paladin-fs.com
3 Current Invoices
+ Contracts
Completely
Confidential
No Cost
No Obligation
21. 21
ALEX LOPATINE
Managing Director, Paladin Fintech Advantage
Fintech Visionary and Expert
Twenty years of international business experience in finance,
banking and technology recognized as a visionary strategist in fintech
and banking. Educated in the U.S. and Switzerland, speaking three
languages has lived in five different countries.
Managing Partner of Park Capital
Executive Chairman of Wysh
Executive Chairman
of Blockchain ShiftCo-Chair of the Florida
Blockchain Foundation
Former CEO & Founder of Nymbus
First Cloud-based Core Supplier in U.S.
Option 1
22. 22
FINTECH ADVANTAGE
RESEARCH
BEFORE CONSULTING
$0 Benchmarking Session with Alex Lopatine
Discuss Core, IT
and Fintech barriers
you may be facing.
What are other
franchises
like yours doing?
Outline high-level
Fintech strategy.
Ask me anything!
