Are You Prepared for the Banking Revolution?

Are You Prepared for the Banking Revolution?

Residents of Rochester, NY, like me, remember all too well when Eastman Kodak discovered the new world of digitized photos, which was revolutionary compared to actual film. As both forms of photography were compared, Kodak management decided to stay with the use of film as their standard product given stronger profit margins over digital. We all know where that led. The companies that developed and brought digital to market—in ways we never thought possible—flourished, especially when quality digital cameras were added to smart phones.

Similarly, the landscape of banking is changing at a rapid pace—and in ways that we would have never imagined.

Let me be clear, the way we bank in the future will not be the same as we know it today. The type of banking institutions will change as did the companies in the world of digital photography.

Apple CardFor starters, who would have imagined a few years ago that tech giants Apple, Google, and Facebook would enter the world of banking? Who would have foreseen the revolution of blockchain technology? Changes like these could mean a shift away from brick-and-mortar bank branches. Many traditional banking services andinstitutions could very well change beyond our imagination.

I fully expect the largest banking institutions will play a major role in this revolution. However, they will have to be strategic, forward thinking, and open to change. A perfect example is Goldman Sachs’ role in managing Apple’s new credit card. Personally, I questioned why an institutional-oriented bank would have agreed to roll out, qualify, and manage retail clients; it just seemed to be a mismatch, which has proven to be the case.

On the other hand, combining the forces of Google and Citibank does make sense to me, given their similar retail focus. Working together, they anticipate offering checking accounts to Google clients next year.

Names that are now appearing in the financial marketplace are not the ones we’re used to seeing as related to banking services. Similarly, a dozen years ago, who would have ever guessed Apple would make the number one device used in taking pictures?

It should be noted that more and more millennials, who make up over 84 million of the US population, would prefer to bank with Amazon, Apple, Facebook and Google over a traditional financial institution, if such an option was available. This in stark contract to the way baby boomers and Generation Xs conduct their personal banking today.

The way we bank is going to become far different than we know it—and at a cheaper cost. How the Fed and bank regulators deal with these changes is going to be interesting to watch.

At three+one®, we’re poised to help you navigate through the anticipated changes in banking. Our liquidity and treasury analysis programs, coupled with rfpPrep®, can help you become aware of how changes will affect you and your organization. This will be reflected in both the institutions you deal with, and how your taxpayers/students will transact with you.

While the world of banking will likely change significantly, the team at three+one® will be consistent, always committed to proactive and forward-thinking technology, liquidity analysis and customer service.

New rfpPrep Site Launch!

New rfpPrep Site Launch!

We are excited to share with you the launch of our new rfpPrep® website!

 

rfpPrep® is the first-ever digital RFP (request for proposal) for public sector & higher-ed financial services.

Reduce the RFP process time by 75% while evaluating financial services options for your entity using an error-free & fair bidding platform. rfpPrep® is an entirely online tool for your needs in BANKING, INVESTMENT, MERCHANT SERVICES & E-PAYMENTS.

Visit rfpPrep® by three+one® to learn how this tool can work for you.

 

There’s No One Way

There’s No One Way

There’s no one way to manage cash. Different banks, investment advisors, and financial advisors have their own approaches and perspectives in the management of short-term cash.

However, there is one essential in managing short-term cash: to manage all cash as a revenue-generating asset. You must keep in mind that cash is not linear, but rather multi-dimensional, with different purposes, both in time and value.

Cash Management

Cash is multi-dimensional, with different purposes, both in time and value.

The ability to capture the ebbs and flows of all cash is in the data. Cash patterns are similar to human behaviors since humans are the ones who are conducting the timing of transactions. The genuine need for cash is often far different than when you thinkyou need it. The patterns detected through the data will show actual needs vs. assumed ones.

The cashvest® platform by three+one® is the first of its kind in the public and higher Ed marketplace. It looks at every individual banking transaction, thus detecting the flows of cash through an entity’s financial systems, and then matches it as the cash flows through your bank’s systems. It’s through cashvest® that patterns surface, enabling unparalleled liquidity management. This level of data puts the power of managing your cash in your hands and the financial institutions that manage your cash.

The strength of liquidity analysis and data leads to a greater precision of knowing when you need cash and how to best maximize its value in the marketplace.

Yes, there are different methods to managing cash. But now there is one definitive way to identify all of your cash’s investment potential. That is cashvest® by three+one®.

Confidence in the Data

Confidence in the Data

It’s already happening! Banks and advisors are setting expectations with clients for more upcoming rate cuts by the Federal Reserve. These will lead to lower deposit rates and yields on short-term cash for next year.

As mentioned in prior blogs, you shouldn’t fall into the trap that lower interest rates mean that the value of cash cannot be a valuable revenue-generating asset. 

three+one Banking Consumer Rates

The right data will enable you to plan on making more interest income next year.

A number of public and higher-Ed institutions keep more cash than necessary on the sidelines, so liquid that the cash becomes dormant. Doing so leads to a lost opportunity in creating or preserving interest income.

There are three steps you should take to make more interest income on your cash, even in a declining interest-rate environment.

First, have a liquidity analysis performed by three+one®. Keep in mind that a liquidity analysis is far different from a cash flow analysis. Looking at all financial transactions from an entity’s perspective—and comparing each transaction that flows through its financial institutions—will lead to valuable data for all parties involved. The more information you have when you actually need cash, not just when you think you need it, will create a level of confidence as you seek to put all cash to work.

Second, the time horizon of short-term cash will allow you to understand the value of cash in the marketplace. All cash has value, whether for a day or for two or more years. Having the confidence to make the decision is a matter of having the necessary information at hand. Our proprietary cashvest® platform can provide you with all the data you need to manage your cash, while also providing a road map to your financial institutions, with sound advice in the management of deposits or investments.

Third, trust the data. While short-term interest rates may rise or fall, the ability to leverage the time value of your cash will allow you to capture or preserve interest income on all cash. In doing so, you should have confidence in what the data is telling you. The ability to have accurate information at your fingertips will allow you to make timely investment decisions with your financial institutions, while always having access to cash when it is needed.

This is the time to start preparing for next year. Let our cashvest® platform provide you with the accurate liquidity data necessary to put all of your cash to work. You’ll be taking advantage of the time value of all cash and preserving your interest income.

Having the right data will enable you to instruct your financial institutions on the steps you plan to take to make more interest income next year. That’s better than having them tell you to expect lower-interest earnings.

cashvest® by three+one® is here to help you demonstrate that kind of confidence.