The American Bankers Association (ABA) and Accenture released a Fintech Playbook for the industry at the ABA convention in Nashville, Tenn.
The playbook is designed to help bankers build and executive a strategic plan to leverage new technologies and remain competitive, ABA said in a news release.
“This is clearly a transformative time for the financial services industry. The rapid convergence of banking and technology is reshaping how banks and their customers interact,” ABA President and CEO Rob Nichols said. “This tool will help banks, particularly community banks, navigate the dynamic field of technological innovations.”
The Fintech Playbook, which will be made available only to ABA bank members, analyzes digital technologies at all levels and in all areas of the business: channels, lines of business, and bank platforms and processes. It also recommends a four-phase approach to implementation.
The playbook describes 18 technologies and, based on an analysis by Accenture, their potential dollar value for banks. It also features a prioritization matrix to help bankers understand the level of potential benefits and the difficulty of implementation for each of the 18 technologies.
The stakes of keeping up with the times are high, ABA and Accenture said in an executive summary for the playbook. Accenture estimates community banks could lose as much as $15 billion of revenues to fintech companies and digital players, nearly 15 percent of the projected revenue pool for all community banks in 2020.
“The potential gain is also staggering, with an estimated uplift in operating income of $20 billion by 2020 for those who adopt financial technologies. This amounts to more than a 52 percent increase,” the summary stated.
The summary cites four drivers of change that are fueling the fintech movement: Customers’ adoption of digital and mobile banking channels, high costs of traditional physical distribution, changing frequency and expectations of customer interactions, and the need to integrate channels to drive a consistent customer experience.
“There is tremendous opportunity for banks in the current wave of digital innovation,” the summary said. “Fintech can be disruptive, but it can also help banks meet changing customer needs, deliver innovative products, reduce costs and deliver exceptional customer service.”
ABA said the playbook was a result of a recommendation made by the association’s Fintech Task Force.
“These teams have been at work for several months, reimagining our role in helping banks connect with millennials and fintech, and I’m proud to share the first tangible result,” Nichols said.
In addition, there will be a landing page on the ABA website, aba.com/fintech, which will house all of the association’s resources, including the playbook, ABA Endorsed Solutions providers and advocacy efforts.