How to Leverage Fintech to Grow Your Bank Joshua Juergensen, Principal, CliftonLarsonAllen LLP Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor. 2017 CliftonLarsonAllen LLP
AGENDA 1) What is Fintech? 2) State of Fintech today 3) Are Fintech s really stealing my customers? 4) How to leverage Fintech to grow externally 5) How to leverage Fintech to grow internally 6) Where to go now?
WHAT IS FINTECH? Companies that use new technology and innovation with available resources in order to compete in the marketplace of traditional financial institutions in the delivery of financial services. Financial technology companies consist of both startups and established financial and technology companies trying to replace or enhance the usage of financial services of existing financial institutions.
o Rapid Growth STATE OF FINTECH TODAY o Fintech and related startups now outnumbers Banks o Significant increase in funding, although slight decline from 2015 to 2016 o 87% that have partnered with Fintech cut costs o 54% have actually increased revenue o Significant shift in strategies from both Banks and Fintech
STATE OF FINTECH TODAY Copyright CBInsight.com
STATE OF FINTECH TODAY VS
IS FINTECH REALLY STEALING MY CUSTOMERS? o Easy Answer: Yes 7
IS FINTECH REALLY STEALING MY CUSTOMERS? 8
IS FINTECH REALLY STEALING MY CUSTOMERS?
IS FINTECH REALLY STEALING MY CUSTOMERS? 10
IS FINTECH REALLY STEALING MY CUSTOMERS? o Easy Answer: Yes
IS FINTECH REALLY STEALING MY CUSTOMERS? o Easy Answer: Yes
IS FINTECH REALLY STEALING MY CUSTOMERS? Complicated Answer: Some are, some aren t take advantage of opportunities with those looking to partner! o Fintech needs Bank customers, Banks need their technology o Fintech needs to utilize the low-cost funding of Banks o Banks have regulatory access Fintech needs is this changing? o Legacy systems are broken from the point of being able to do new things, but they're perfectly OK for what they're already doing - Suresh Ramamurthi American Banker article
HOW TO LEVERAGE FINTECH TO GROW EXTERNALLY Does a digital lending platform make sense for your bank?
HOW TO LEVERAGE FINTECH TO GROW EXTERNALLY o Improved customer relationships o Leverage personal relationships and networking opportunities with millennials o Investment opportunities o Invest in technology!
HOW TO LEVERAGE FINTECH TO GROW EXTERNALLY
HOW TO LEVERAGE FINTECH TO GROW EXTERNALLY o Cross River Bank Teaneck, NJ o $561M as of 12/31/16, $771M as of 6/30/17 o Received $28M in venture capital funding $2.4B Originations 3.1% ROA 28% ROE $12.3M NI as of 6/30/17 14.1% Leverage 0% Non-Accrual 36% Efficiency
HOW TO LEVERAGE FINTECH TO GROW EXTERNALLY
HOW TO LEVERAGE FINTECH TO GROW EXTERNALLY Plan for Retirement!
HOW TO LEVERAGE FINTECH TO GROW EXTERNALLY
HOW TO LEVERAGE FINTECH TO GROW EXTERNALLY
HOW TO LEVERAGE FINTECH TO GROW EXTERNALLY What is missing here?
HOW TO LEVERAGE FINTECH TO GROW INTERNALLY o Strategic alignment between governance, senior management, and operational staff
HOW TO LEVERAGE FINTECH TO GROW INTERNALLY o Data Analytics - Public data is now easier to access and analyze
HOW TO LEVERAGE FINTECH TO GROW INTERNALLY 25
HOW TO LEVERAGE FINTECH TO GROW INTERNALLY o Leverage Millennials!
WHERE TO GO NOW? o Consider startup accelerator programs to connect with Fintech o Don t be afraid to have preliminary discussions o Poll your customers to see what services they are looking for o Utilize millennials within your organization to lead the charge
QUESTIONS? Joshua Juergensen, CPA Principal CliftonLarsonAllen LLP 612-397-3261 Joshua.Juergensen@claconnect.com