digital banking conference

5 Keynote Takeaways from the 2018 Digital Banking Conference

If you couldn’t make it to beautiful Austin, TX for American Banker’s Digital Banking Conference 2018, you’re in luck!  We prepared a quick summary from some of the most interesting keynote speakers at the conference right here for you!

The Future of Digital Banking

A report by Oracle showed banks are using different approaches to drive their digital strategies and deal with competition from fintech companies. The report explores four key digital strategies that banks have been using with varying success:

  • Launching a digital brand – This involves positioning a new brand differently from the existing one, or developing a set of processes that enable the new digital brand to compete in a different way. Digital brands focus on simplicity of design and ease of use through digitization.
  • Digitizing all processes – This is an area where traditional banking organizations can compete with fintech firms by pushing to digitize both front-office and back-office processes, including customer onboarding, originations and relationship pricing.
  • Modernizing the digital UX – The need to enhance the digital experience of key customer-facing processes includes use of HTML5, responsive design, full support for all mobile devices, the integration of the Internet of Things, and open APIs.
  • Launching new digital capabilities – When looking at new capabilities, organizations should consider delivering it completely outside the scope of their current mobile app, such as money movement functions, mobile wallets or the use of data as “currency”.

There has been a long-term, secular trend towards consolidation in the banking sector. The total number of banks dropped by 4,810 between 1994 and 2016.  There are a number of factors driving this trend:

  • Higher fixed regulatory costs – Basel III and Dodd-Frank Act added expensive requirements such as stress testing as well as additional compliance functions, notably around Bank Secrecy Act and anti-money laundering, plus overall consumer compliance.
  • Extended period of low interest rates – Bank margins fell to 3.02% at one point in 2015, the lowest average net interest margin since 1984 according to the FDIC.
  • Technological and financial innovation – Those that can’t afford to maintain their technology edge get acquired.

This is a huge opportunity for both banks and technology vendors.  Any banks that can manage to achieve 100% paperless onboarding will have a tremendous advantage in the market.  It’s also the main reason why there were so many companies selling digital account opening software at the conference.  Whichever ones get the most traction can sweep up a lot of market share.

Across Europe, retail banks have digitized only 20% to 40% of their processes; 90% of European banks invest less than 0.5% of their total spending on digital. As a result, most have relatively shallow digital offerings focused on enabling basic customer transactions, according to a report by McKinsey & Company.

There was a lot of discussion on my Twitter feed about whether or not this was true.  Terry Cordeiro brought up the point that UK-based Metro Bank is considered a challenger bank that is trying to upend the “Big 4” (Barclays, HSBC, Lloyds Banking Group, and Royal Bank of Scotland Group).  Metro has opened branches and plans to continue until they have 200 to 250 in Greater London.

Brett King responded (also via Twitter) that that Metro Bank was “technically pre-Fintech licensing – traditional charter. New bank, not challenger as per licensing models”.

“Technically, yes. But it’s still a new bank challenging old banks. Different operating model,” Cordeiro replied.

“My point was about economics,” King continued. “VCs don’t support branch deployment because of scale and acquisition costs being terrible thru physical networks. Metro cost of acquisition ÂŁ200, Monzo ÂŁ15-20.” Which seemed like a very strong point to me.

Cordeiro finished up the exchange with, “Don’t disagree with the economics of onboarding. Interesting to see how fintech challenger banks will make revenues from basic current accounts.”

Winning Digital Strategies

A conversation with Bank of America’s Chief Operations & Technology Officer Catherine Bessant.

Bessant believes that AI will make or break banks, either through its misuse and resulting reputational damage, or by gaining operational scale and increasing the ability to recruit critical technology talent going forward.  (See Will AI be an Advisor’s Best Friend or Worst Nightmare?)

I believe Bessant was referring to her technology team, but the analogy is still valid. Are other banks treating their staff like cogs in a machine or are do they consider each to be an individual innovation engine that should be cultivated and helped to grow?

Gavin Michael

Gavin Michael is head of technology for global consumer banking for Citi. Michael was named American Banker’s Digital Banker of the Year in 2016 when he was still at JP Morgan.

A third of Millennials don’t believe they will even need a bank in the future and five million of them do not have a checking account, citing distrust of banks as the reason.

So for Citi to manage to attract significant numbers of younger customers to their mobile app is an achievement.

Digital payments are expected to reach a record 726 billion transactions by 2020, according to a recent study:

“Curiously, though the number of transactions continues to rise at a rapid rate, the average USD value per transaction has decreased slightly, as digital establishes itself as a growing rival to cash for low cost purchases.”

Michael also reported that Citi saw a 25% increase in mobile users in 1Q’18.

Messaging will become the digital battleground of the future as more apps launch their own financial services that compete with their partners’ offerings. If customers can check their balances and send payments through Facebook Messenger for their Citi accounts, they can also do the same things for accounts at Chase or BofA. Yet Facebook gets to keep the eyeballs (for advertising) and any revenue share from the partner banks.

A survey by networking giant Cisco Systems predicts that total Internet traffic will surpass 3 Zettabytes by 2021 and over 80% will be video.  1 Zettabyte equals a million petabytes.

Global banks have an advantage to offer that can gain them access to key partnerships in growing markets. Scale, access to capital and technical and human resources that can be applied to support them that startups just cannot match.

US banks are doing everything they can to squeeze themselves into the Chinese market. Citi’s deal with Tencent’s WeChat can help them gain a foothold in consumer loans considering WeChat’s tremendous base of over 1 billion users. Since WeChat is connected to almost every aspect of consumers’ daily lives, Citi could benefit greatly from becoming the primary source for small business loans as well as mortgages in China.

A very cool example! I wish NJ Transit gave credits if their trains were late! They would probably go broke if they did.

A common example of poor U/X design is a dashboard or client portal that looks more like the cockpit of a 747 than an intuitive user experience.  This is especially true of bigger software vendors after they have been in business for 10+ years and built up a dominant market share.  They usually wind up with a hodge-podge of features and functionality with a menu system and client experience to match.

Startups that build software that does just one thing but does it elegantly and very well will always find space to sell against the dominant players.

I think this will happen even sooner than they’re predicting. Asia consumers have consistently shown a higher predilection for adopting services delivered or coordinated through digital channels.

Product Demos


As someone who has bought and sold a few cars privately, this sounds like something I would use. Anything to make it easier to handle the paperwork and transfer of funds.

There were a number of useful tools that consumers could use to alert them of updates in conditions or other changes in condition that require their attention.

I was thinking the same thing! If Alexa can’t manage future payments in a reasonable manner, then why use it at all?

Now we know why Venmo is a more user-friendly solution.



The Wealth Tech Today blog is published by Craig Iskowitz, founder and CEO of Ezra Group, a boutique consulting firm that caters to banks, broker-dealers, RIA’s, asset managers and the leading vendors in the surrounding #fintech space. He can be reached at