Posts Tagged ‘Innovation’


Well that’s so fitting.  The US Women’s Team pulls off a victory in one of the most exciting World Cup games ever and USAA is the #1 Place to Work in IT.  It’s nice to see a financial institution is on top just when you thought the financial services environment was lagging.  What’s even more surprising is they’re #1 for the second year running.

USAA has long been considered an innovator in financial services.  The fact that they are also an awesome place to work is no surprise.  If you give techies an environment where they can continually learn and try out new ideas, great things can happen.  USAA seems to have it figured out.  If you take care of your employees, they will in turn take care of your customers.

In an environment where we hear of banks and credits closing every week, USAA is giving 18% performance bonuses to all 22,500 of their full-time employees.  Notice, it’s not just the executives and top salespeople that are being rewarded.  USAA recognizes that every one plays a part in making the company successful.

They must be doing something right, because every USAA customer that I know is very satisfied with the company.  They also have had accounts there for a number of years.

Typically, you hear executives talk about being like Bank of America, Wells Fargo, or Citi.  USAA, on the other hand, has been laser focused with taking care of the financial needs of our armed forces personnel.  They go to great lengths to make the experience as easy and painless as possible.

USAA understands that this is a service business.  It’s also reflected in how they treat their employees. Hopefully other bank and credit union executives will begin to look at USAA as a model to emulate.

Photo from Denver Post

Are You Winning?

Lately I’ve seen a lot of posts bemoaning the lack of innovation in the bank and credit union industries.  I do agree that companies such as industry outsiders Apple, Google, Square and BankSimple seem to be leading the industry disruptions.  But there are companies, such as Ally, TD Bank and USAA, that are also innovation driven.

One thing that I’ve noticed about these three companies is, they all seem to be customer-centric.  While every bank and credit union talks about their great service, these three seem to back it up.  USAA and TD Bank especially seem to offer products that allow their customers to bank the way that is most comfortable to them.  Unlike their peers, these institutions don’t follow the crowd.  They lead the crowd and let everyone else pay catch up.

This follow the crowd mentality has always been something that has bothered me.  Especially when you realize that following everyone else is what brought us to this crisis in our industry.  But I think there are other issues at play here.  In the past, bankers were the ones that controlled the flow of money.  Without much work on their part, bankers could just wait for customers to come to them with requests.  Now, with disruptive technology, one does not have to rely on a bank to get access to capital.

I believe this “wait and see” approach is one reason there has been a lack of innovation in banking.  Here’s one example: everyone tends to agree that mobile banking will play an integral part in the future of banking.  But I’ve seen comments on blogs where executives were reluctant to offer mobile alerts because it will reduce NSF fees, so they were just holding off on mobile altogether.  Not very customer-centric is it?  Never mind that offering mobile alerts could drive up customer acquisitions and increase income.  They’re more focused on the “potential” loss of fee income.  But as competitors begin to offer mobile, they reluctantly look to add the service.

Now, the biggest reason for the lack of innovation?  That would be fear.  Particularly, the fear of losing entrenched power.  If you think about it, most bank and credit union executives view IT as a cost center.  Therefore, they don’t look at it as a competitive advantage.  Also, they don’t understand it, and really don’t want to understand it either.

Over the last few years, there have been articles about the purpose of physical branches changing.  Branch traffic has been steadily declining for years.  This means that the opportunities for cross-selling have gone down also.  But online usage is trending up.  Which means online account openings, bill pay, mobile, and other online services are also trending up.  Also, customer acquisitions are cheaper online.

So in order to survive, the people that currently have the power have to deal with those IT people.  Which means they’d have to give up power.  But more importantly, if the branch isn’t as important and online is, what will their future purpose be?  They don’t know that much about online banking, but they know a whole lot about branch banking.  Better to keep their head in ground and ignore the change that is happening around them.  Just maintain the status quo at all costs.

We all know that people that ignore change and try to stay the same are just spectators.  Spectators aren’t in the game.  If you’re not in the game, that means you can’t possibly be winning.  Which means you’re losing.

Andera Launches SDK

January 20, 2011 1 comment

We were one of Andera’s first customers for their online account opening product. So far, the experience has been really good. They’ve always been open to suggestions and have a pretty quick turnaround. Well now they’ve released a SDK for their web services. While listening to the presentation, I could just imagine the potential uses.

A few that they mentioned dealt with verification of identity, credit and funding sources. This functionality could open doors for even better loan and account applications. With mobile becoming a bigger priority, being able to tie into these services could be a boon.

Some other examples they gave dealt with the gaming and travel industries. You could tell that they’ve put a lot of thought into this. The GUI for service looked really cool also.

I’m looking forward to working even closer with Andera in the future.