The Technology Edge

The Technology Edge

One of the underlining reasons for the merging of large regional banks is to provide a scale of efficiency: less duplication of risk and compliance overhead, coupled with the ability to build greater, stronger & secure sources of technology for its organization and client base.

As I mentioned a couple blogs ago, this trend of regional banks merging is only just beginning. Where will this leave the smaller Community Banks? The answer is at a real disadvantage, especially when it comes to larger institutional clients like public entities and higher Ed & healthcare organizations.

The Technology Edge

Electronic banking, fraud protection security, and near field technology conveniences – just to name a few – are already being offered by the large banks. They have either built these systems internally or partnered up with fintech companies, requiring large sums of capital investment.

Community banks work with third-party vendors in providing some level of technology support. This comes at a hefty price and can be tough to calculate when pricing product offerings, especially for banking services RFPs.

As a result, the trends I see developing over the next couple of years will be:

1) Community banks will primarily focus on retail consumer banking, being managed out of a local branch. Banking will remain local.

2) Technology will be in the forefront of large banks, including the new entities formed by merging banks.

3) Larger banks will continue to partner with fintech companies to innovate new levels of security and the transfer of funds, like blockchain.

At threeplusone®, we remain a leader in tracking the innovation of bank technology and providers. It is important to be aware of these trends and the sources of such technology, so they can be applied where necessary and incorporated into banking services RFPs.

Technology is moving at the speed of light, and the ability to stay informed is essential in making your life simpler for you and those you serve. Contact us at threeplusone® to ensure you’re capitalizing on the efficiencies and gains financial technology can bring you.

Expensive Pieces of Paper

Did you know the average cost of issuing and awarding a Request for Proposal (RFP) for banking services, using internal resources, is… $45,000?

At that cost, the RFP better be worth it!

Expensive Pieces of Paper

In many instances, that’s not the case. What we tend to find are 2016 banking-services RFPs are often trapped in a 1990s template.

Recently, I reviewed a large national banking RFP that had the same wording of ones I’d seen many years ago. In fact, it was a replica of another such organization’s RFP that had been issued several years before. It lacked color, specifics, and data and was serving as a set up for a price war between banks. The real problem is that very few banks will respond to it. The end result will be a ton of money spent with no significant outcome to warrant the expense.

If you are planning to issue a banking RFP, consider the following:

(1) Conduct a liquidity/ banking analysis first that will assess all your organization’s needs, now and well into the future. The more information you can provide competing banks, the more they have to work with in providing a better response.

(2) Create a new RFP format that is fresh, forward thinking, and flexible, making it clear you will consider new ideas.

(3) Limit responses to fewer words and have more in-person conversations. We’ve found paper is not always the best way to determine the right fit.

(4) Address your cash and lending needs both now and in the future; provide a holistic picture. Given new federal regulations, many banks have not been responding to RFPs due to their lack of interest in holding such deposits.

(5) if you hire a consultant to prepare your RFP, make sure you’re not getting a rehash of some other client’s template. Make them do original brainstorming on your RFP and be accountable for the results.

If you decide to issue a banking-services RFP, do it right or else you will be just sending out expensive sheets of paper that will provide little value to your organization or to the banks you want to compete for your business.

If you don’t know where to start or need a fresh perspective, call us. At three+one, we help entities of all sizes evaluate their needs and determine if a banking RFP is right for them. If you’re interested, we can tailor an RFP document for you that is easy to read, reflects and articulates your needs, and is written to get more responses. Our goal is to make the paper your RFP is printed on an asset and not an unnecessary expense.

We Hope to See You at our Upcoming Presentation:

GFOA of SC – October 16 – 19 (We’ll be presenting twice!)
North Country NY GFOA – October 20th

Jamie Dimon is Right on Point

In a country where it’s more in vogue to disagree rather than to agree, I find it very easy to agree with the comments made by Jamie Dimon, Chairman and CEO of J.P. Morgan, in a recent Wall Street Journal article.

Jamie Dimon is Right on Point

While I disagree with Mr. Dimon’s name calling, as a former banker, I do concur that bankers need to find a way work together as one industry rather than pitting one bank against another.

Some may consider size to matter—community banks vs. regional, top-tier banks vs. regional and/or community banks—but to me, one fact is clear: all banks, no matter what their size, are intertwined at the hip. The world of banking is small in many ways, whether by lending to one other, the mobility of talent between banks, or the frequent interchange of services.

While blame may be rightfully placed on the biggest banks for their role in 2008’s financial meltdown, others are starting to point fingers at small banks for creating a potentially new financial bubble with subprime auto loans.

Personally, I am tired of all the open bickering and name calling. It has truly become part of the culture rather than an exception.

A month ago, I talked to the chairman of a local community bank and all I heard were complaints about other banks. Midway through our conversation, I brought up how banks should partner on certain issues, but that fell on deaf ears. The conversation almost immediately reverted to the competitive and predatory practices of other banks.

A common issue that faces banks of all sizes is the monumental challenge of being a bank in today’s financial environment. Successfully serving the public is challenge enough. Then toss in government regulations, unprecedentedly low interest rates, and a demanding client base that always wants more.

Seems to me a common partnership would be a better solution—pointing out all the good that banking does at all levels—rather than stressing what competitive banks don’t offer.

My advice: all bankers to come together, shoulder to shoulder, and act sensibly—as one voice and one industry. Until that day comes, Mr. Dimon, keep voicing your opinion loud and clear. I listened, and others will too.


Co-founder Peter Forsgren presented yesterday and was a panelist during the:
“Current State of Banking Technologies” session at the National GFOA Annual Conference in Toronto.

We hope you were able to see it! If not, we’ve posted our presentation online you can find it here.


Have any questions or comments for the author? Reach out below!

Joseph Rulison
CEO and Co-Founder