Getting Technology Right, with Danny Payne

April 27, 2023

  • Fintech is a highly competitive space. But one vendor can’t be everything for everyone. Sometimes collaboration between competitors is the best solution.
  • Community FIs must acknowledge the power of data. Leveraging it is the only way to stay competitive and provide services that meet accountholder
  • The pandemic sped digital transformation, but it also showed us the importance of the human touch.

Technology providers clearly play an important role in the ongoing success of all community financial institutions. Community FIs couldn’t do what they do without technology. But does the responsibility of the tech provider end with simply providing sound software? Not according to  Danny Payne, Sales Director – Digital Experience at Jack Henry.

Payne is a board member for the Association for Financial Technology (AFT) and firmly believes that cooperation among fintechs is essential for their individual success. According to Payne, as the number of community FIs continues to drop, fintechs must work together to help ensure that the industry thrives. Some FIs will keep pace; others won’t. Tech providers should help the survivors succeed, noted Payne.

In this episode of The Digital Banking Podcast, Payne also discussed the importance of data and how understanding user preferences helps community FIs provide services and offer apps that meet or exceed the needs of their accountholders.

Payne and host Josh DeTar also explored the next generations of accountholders and how community FIs can approach them. They also looked at how the pandemic sped up digital transformation yet also made us realize the importance of in-person interaction.

The Future of Fintech and Financial Services Lies in Cooperation

Community financial institutions need to choose products and services suitable for their operations. However, no one vendor can do it all. When vendors work with each other for the common good of their customers, everybody wins with smoother implementations and better integrations. This is the driving mission of the Association for Financial Technology, or AFT, of which Payne is a long-time member.

”I’m so passionate about it, the idea that everybody can put aside the competitive spirit of what we’re trying to do in the industry and learn from each other, through sessions and education to figure out and make sure that we’re pointing in the right direction,” said Payne.

‘Not only should we be doing this or doing that, but how are we helping point banks and credit unions in the right direction for the competition they have in the market? How are we making sure that we’re sharpening our saw so that we’re giving them the tools to be competitive out in the landscape they’re dealing with?”

Let’s Talk About First App Concept and Embedded Finance

“Top of wallet” has long been the goal of financial institutions with credit card portfolios. In the digital space, “top of wallet” translates to “first app,” i.e., which financial app is the consumer’s go-to app?

”Open your phone and start counting how many places require you to put in your bank or credit card information to move some funding over to that app to purchase or do something that creates a money movement situation,” suggested Payne.

“Don’t just ask your users how they like your app,” he added. “Instead, see where the money they take from your app goes. Once you determine that, you’ll be better positioned to change and upgrade your app, so your users don’t have to use 10+ apps, each for a different finance activity.”

That’s one use case for embedded finance—a single app with as many capabilities as possible to meet your users’ specific needs. On the flip side, though, you can’t add so much functionality that users become overwhelmed by all their options. Strides are being made in the area of hyper-personalization, wherein each user can turn on only the app features they want and turn off the rest.

”It’s a struggle, and it’s not something you’re going to be able to solve overnight,” noted Payne. “But it’s something that every CEO of every bank and credit union should be trying to wrap their minds around. How do I get these customers? What services can I offer my customers that are going to bring them back to me?”

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