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.
For 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.
Schoharie County, NY Treasurer, Bill Cherry personally attests to the incredible power of cashvest® in finding new sources of revenue for public entities. Don’t take our word for it; just listen to your colleague in today’s vlog!
It’s Election Day 2019 in the United States and certainly an appropriate time to reflect on the importance of our right to vote in America. This right has been protected and won by the sacrifice and struggle of preceding generations – including the ultimate sacrifice by many Americans.
While we are inundated with political ads and soundbites in this season, both positive and negative, some truthful and others misleading, it’s often difficult to sort through the noise to get to coherent messaging. But more than the individuals for whom we are casting our votes, we are also pulling the levers to steer our nation in terms of policy. And each policy has a financial element to it.
While three+one® remains objective in political terms and does not endorse candidates or political parties, our expertise and company’s efforts are squarely upon helping public entities and higher Ed institutions make the most of their limited resources to provide taxpayers and students the highest value for their hard-earned dollars. The fact is these two areas, public and higher Ed finance, are under intense scrutiny to produce more and more, often with capped or diminishing resources. Sometimes people wonder how resources can be reduced when taxes and tuitions rise, but increased regulations, more inspections from many angles in the age of social media, and mandated requirements (often unfunded mandates) have caused a drain on the economic engines of public entities and centers of higher education.
There has been much political talk about shifting resources and drastically changing taxation, spending priorities, and the way college is paid for in the country. After the Great Recession and its historically high unemployment, we now have historically low unemployment, but historically high deficits. Our overall economic growth should be much higher than it is, also, with an economy running as strongly as ours has in recent years. All things to consider as we move forward. But the fact is that there remains only Monetary Policy and Fiscal Policy to help guide our economy. The Federal Reserve has three tools for Monetary Policy – reserve requirements it imposes on lending institutions, the discount rate (interest rate) it offers them, and the open market operations that impact money supply. Conversely, the President and Congress control Fiscal Policy and its three tools: levels of taxation, transfer payments, and government purchases of goods and services. Ultimately, these are the rudders that steer the economic ship of the country, and our votes determine their direction.
While the tools of Monetary and Fiscal Policy remain the same, what is new is the fintech instruments that can be applied to enhance their efficiency. The liquidity analysis that cashvest® by three+one® offers public entities and higher Ed institutions provides an overview of all of their transactions. It identifies how every dollar in each of their numerous accounts is generating – or not generating – maximum interest. The technology we have devised for these operations did not exist until the recent past; to conduct this level of analysis without these tools would literally have been impossible. Now that they do exist, there is no reason not to utilize fintech breakthroughs. A doctor performing surgery with 1980s methods & technology while ignoring current updates would have his or her license revoked.
We are at an important crossroads in our nation’s history, and we must use our votes to elect those who will embrace the use of fintech advancements that will make our nation as financially efficient, equitable, and strong as the people who have built and sustained this great land from its inception. Proudly exercise your right to vote, America!
While watching the news and catching up on emails the other night, I received an “888” call followed by an urgent text from my bank. It alerted me to fraud on my personal bank account and provided an authorized code and phone number to call. I dialed that number only to receive the same official bank voice/menu I knew from past calls I’d made to the bank.
Being suspicious, I proceeded to call the phone number on the back of my credit card, which was the same voice/menu as in the text message. Finally, having made my way through to customer service, I was advised that the text message was in fact a new type of fraud that the bank was trying to deal with. It had them as stumped as I was—and this was one of the country’s top three banks!
Clearly, the sophistication of fraud through technology and communication is rapidly escalating. The look and sound are so convincing that it’s tough to know what is real and what is fake. If you haven’t yet experienced such fraud attempts, it’s only a matter of time before you will.
So, what can public entities and higher Ed institutions do to protect themselves?
Here are some suggested tips:
1. Today’s phone texts are the new form of robo messaging. They look real and their reference to a link or phone call are only a lure to have you provide personal and confidential financial access to your bank accounts. Never respond to a text by a financial institution. Use it as an opportunity to reach out to your bank or banker and report the potential fraud.
2. If you receive a phone call from someone identifying him/herself as a financial representative looking to discuss a specific transaction or account, ask for his/her name and employee number. Then hang up and call your bank to report the incident and verify if such a person is on the bank’s staff.
3. Lately there have been a number of scams suggesting that your bank is looking to verify your information to update a “Know Your Client” (KYC) requirement. You may be told that if you do not respond, your accounts will be blocked. A bank would never reach out by text or email to verify your identity or personal information. Rather, they would do so either by letter or in person.
Scammers are using technology to gain access to your information and money. They use approaches that look real, urgent, and threatening. The only way to protect yourself and your organization is to be alert to and cognizant of these attempts.
If you ever have a question or suspect such activity, call your banker immediately. This should be your first level of defense against fraud. If your bank does not respond or provide fraud protection, then it’s time to look for a new bank that does. In today’s marketplace, there is no excuse for a bank to leave you unprotected.
Through rfpPrep® by three+one®, we can help you navigate through the bank and treasury services you should be receiving to protect your organization and the money of those you serve.
The world of fraud looks so innocent and real. Let us help you unmask the fraud and protect those dollars you have a fiduciary obligation to protect.
October has been an exciting month for us at three+one®. Celebrating 5 amazing years reminds us of our passion for giving back to the communities we serve. That truly has been our calling. Together with our public & higher-ed partners, cashvest® by three+one® has helped secure more than $150M in new revenue for your taxpayers & students!
The only question left to answer…Will you be a part of the next 5 years?
The Town of Aurora, New York is located southeast of Buffalo and includes the Village of East Aurora. Its Main Street is famous for its energetic small-town ambiance with specialty shops, restaurants, and historic homes. It may be most celebrated as the home of Fisher-Price, the internationally renowned toy manufacturer.
The Town of Aurora, with a population of approximately 13,000 (2010 census), has an $8.9 million budget (all funds). In August 2017, Supervisor Jim Bach and the Town Board engaged the cashvest® & rfpPrep® services by three+one®, seeking to provide their taxpayers with as much additional revenue/savings as possible.
Supervisor Bach and Assistant to the Supervisor Kathleen Moffat have carried out three+one®’s plan. Over the past twelve months, the Town has achieved $165,820 in realized interest earnings and “soft savings” of $35,902 in banking fees.
Here are some of the ways the town accomplished this substantial spike in additional revenue:
(1) 100% of the town’s cash is earning interest and 79% of all the town’s cash is providing value through a diversified-liquidity strategy that is meeting the 30-day Treasury index. Current investments are earning between 1.89% and 2.15%. Due to the town’s proactive liquidity strategy employing time horizon data and stress-test modeling, the town has a significant portion of cash locked in fixed-income solutions earning 2.10% through October 2020 – something that could not have been achieved without time horizon data and fixed income solutions.
(2) The town does not look at its cash in select “buckets.” The three+one® plan benchmarks all cash on a quarterly basis and helps the town implement a comprehensive liquidity strategy on all cash in order to guarantee all assets are bringing value to the taxpayers. There’s a science behind continually earning while offsetting banking services, ensuring cash flow for A/P & payroll, and strategic liquidity time horizons.
(3) The Town Board revised and updated its investment policy statement and took steps to adopt electronic payment solutions. These steps provided the framework necessary to ensure the safety of public dollars while meeting all legal requirements and maximizing the value on cash. The adoption of electronic payment options: (1) decreased costs, (2) increased float (increased investment potential on funds), and (3) provided increased transparency through online ePayable technology.
The Town of Aurora’s Board is enthusiastic about trying solutions that provide additional revenue to the taxpayers. With proposed AIM (Aid and Incentives for Municipalities) funding cuts in New York, tax-cap limits, infrastructure needs, and abundant taxpayer service essentials, this new income will provide a much-needed boost in revenue.
If you are a town/village/city or school district weighing the options of whether to take advantage of bringing revenue benefits to your entity, consider the size of your budget and identify your year-to-date interest earnings.
Here are some examples of where interest earnings using cashvest® by three+one® should be:
$5 million budget = at least ~$94,860 in income
$19 million budget = at least ~$353,400 in income
$22 million budget = at least ~$409,200 in income
$69 million budget = at least ~$1,283,400 in income
$92 million budget = at least ~$1,711,200 in income
Finally, bear in mind that there is no one solution in today’s public banking marketplace. Be cautious and skeptical of any vendor that suggests a “one size fits all” product; they simply don’t exist. Public entities have different banks, ever-changing liquidity variations, strategic-liquidity amounts of different sizes, varying degrees of experience, and available time horizons.
We’re proud of the success The Town of Aurora has achieved. We stand ready to do the same for your entity.