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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.
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, co
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.
cashvest®: A Public Treasurer’s Best Tool
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!
Power of the Ballot Box
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!
FinTech Security Alert: They’re Out There
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.