In Part Two of a Four Part Series, John Baird, CEO of Vouched, drills down into the growing number of opportunities that technology is bringing to Community Banks. You can read the first article here: https://www.bankingexchange.com/news-feed/item/10057-ceo-of-vouched-speaks-on-banking-technology-and-is-optimistic-about-community-bank-opportunities?Itemid=639
John Baird, CEO of Vouched, has an optimistic message to banks and credit unions of all sizes: Technology will continue to lower the cost of implementation of services and level the playing field. In an interview with Banking Exchange, Baird explained, “Technology is much more nimble now, the costs of implementation and management continue to drop, and the opportunities to innovate have never been greater.”
Baird explained, “There’s more low-hanging fruit today because the systems not only cost less, they’re far easier to plug in, they’re faster, and you can scale up or scale down as needed.”
To take advantage of this shift, financial institutions should not outsource all technology functions. “Banks need to understand how to manage digital product development, and the challenge is not to outsource so much that you miss massive opportunities,” he said. “When the Buy Now, Pay Later concept was created in Australia, it was not this massively sophisticated business, but in seven years it was acquired by Square for $29 billion. Afterpay should have inspired a thousand Community Banks to create financial products that were very similar and to create regional or even national powerhouses. Banks, after all, understand credit.”
That doesn’t mean a Community Bank needs to go out and hire an entire engineering team. “Get three solid engineers, focus them on a single project, make it successful, and then scale it.”
Partnerships between Community Banks and Fintechs are a strategy for building a breakout tech team. Baird said, “At the end of 2021, Banks and Fintechs were largely perceived as enemies. But Fintechs today should be much more willing to do partnerships with Banks. I would encourage Community Banks to go out and find a Fintech partner that is amenable to letting a banking partner have a lot more influence. It’s going to be for the better for everyone.”