Four Revelations from Money 20/20 for Financial Institutions

Larky just returned from the annual Money20/20 conference where “DISRUPTIVE” was the word used over and over to explain the relentless, rapid innovation happening in the financial services ecosystem. The number of new companies, products, and services was both daunting and inspiring.

What struck me most about all of these new options was that they laid bare the commodity aspect of financial services. Larger companies (like Apple, Google, Facebook, Wal-Mart) and lesser known companies (like LoopPay, Remitly, Wealthfront, Thanks Again, and are all offering financial services that were once restricted to the domain of old-line banks and credit unions. To compete, big banks are heaping huge investments into mobile and online technologies.

With all of those players taking a piece of the pie, will there be any pie left for your community-focused bank or credit union? What is a community bank or credit union to do?

1. Give the people what they want!

The speed of change and the urgency to act should not spell impending doom for community FIs. On the contrary, the opportunities are greater than ever to add value to your account holders and wow them with the same level of technology, delight, and innovation as Apple or anyone else.
Here’s one thing we learned from a long dinner with smart banking executives: your brand has tremendous value; it just needs to stand for more and offer more. People want to be loyal to their local FIs. They’re rooting for their credit unions and community banks. They want them to succeed. They want to stick with you, but they need to see the same level of value and delight that they see from high-tech giants, start-ups, and big banks. They need to see more value

So give them what they want.

First, think like a start-up and “get out of the building”. No, no – I don’t mean that you should move your FI into a garage like Bill Gates or Jeff Bezos did. I mean that you should simply ask people – in person, on the phone, on the web -- what they think of you, your offerings, your branches, and the future of money. Find out why 50% of your account holders are not sure they’ll have the same primary account in 6 months [1]. And find out why they’re buying 50% of their financial products from someone other than you [2].
Then, get creative and give them cutting-edge technologies, whether you develop them yourself or leverage third-party technologies. Think “beyond the branch.” Financial services can now happen anywhere for a consumer, and your FI needs to be there whenever you can help.
Yes, this all sounds daunting and expensive, but it doesn’t have to be. You can develop simple tools that solve big problems and add significant convenience. And you can do it through partnerships with innovative companies (like yours truly).
Low rates and “member-owned” won’t keep people loyal for long, but they’re willing to give you a lot of leeway if you show them that you’re adding value and building an FI of the future.

2. Local is king.

As mentioned above, a smaller, community brand can have tremendous value. People root for local businesses, and credit unions and community banks are seen as “the good guys” and “the home team.”

Consumers want to support local FIs and local businesses, and they want their money to stay in the community. Thankfully, your brand is inherently linked to your community, and that’s a powerful tool. The big banks can only pretend to be interested in keeping money local, and consumers can see through the illusion.

Whatever you can do to deepen the connection between your brand and your community will also strengthen the bonds between your brand and your customers. Companies like Larky are offering platforms that encourage consumers to bank, spend, and fund local businesses and charities. Successful community banks and credit unions are using these platforms to rally their audience (and their money) around local business and community causes.

Big banks are trying to keep up by appearing as small and local as possible. Believe it or not, Wells Fargo is still building more branches, but they’re smaller and more personalized. They’re using 1:1 marketing and customer service techniques, so consumers will stop thinking of them as a mega-bank.
Here’s another example - Bank of America has offered “Free Museum Weekends,” where their cardholders get free admission to 150 museums across the country on the first weekend of every month.
What are some ways your institution could work locally to help people explore their communities and build your own brand? If you want more ideas, call us!

3. Context is queen.

If “local is king”, then context is surely queen. At Money20/20, everyone talked about customer engagement in “context.” This means your FI can anticipate a customer’s needs and desires by using attitudinal, situational, and behavioral cues, and then you can deliver the right information to that customer at the right time and place.
Companies at Money2020 were using contextual engagement in every way - from targeting better discounts to streamlining in-store shopping to helping consumers invest their money more wisely. This all makes sense because most purchases are made within 10 miles of home. Additionally, 86% of consumers search for a coupon or discount before shopping. So why not offer them a local merchant discount before they have to go looking? If you want to know more about how we can help you with this, read this article.

4. Apple Pay is a big deal, but it's not the only deal.
A panel of experts at Money 20/20 agreed that Apple Pay is a game changer that will lead the charge into mobile wallets. However, those panelists also said that Apple Pay is only on iOS (so far), and 75% of smartphones are Android phones. Plus, Apple Pay will have challenges at point-of-sale since most merchants don’t yet have NFC-compatible readers.
Dekkers Davidson, the chief of Merchant Commerce Exchange (MCX), the consortium of retail giants including Wal-Mart and Target, offered some very concrete use cases for convenience such as seamless payments at drive-thru restaurants, express checkout lanes in stores, and paying for gas inside your car (though you still have to pump yourself, darn it!). It’s coming early next year and it would be a mistake to discount the persistence and power of MCX retailers.
The head of SoftCard (formerly-named ISIS) and the CIO of Subway showed us how SoftCard will be the preferred method of payment at 26,000 Subway franchises by offering special deals and discounts to SoftCard users.
These and many other mobile wallets on the horizon are poised to take over in years to come, and they will constitute the majority of payments under $100. It will become mission critical to ensure that your members choose your card as the default card in a mobile wallet. One way to ensure that is to "not" focus on the wallet, but focus on the card. Attach value to the card program (such as compelling discounts from local merchants) so that users want to make your card their default card, no matter what mobile wallet or payment mechanism they choose.

Larky is a mobile loyalty platform that amazes and works to keep members happy and loyal.  To learn more, visit or email us at


1. CapGemini EFMA, World Retail Banking Report 2014

2. Bain & Company, Customer Loyalty in Retail Banking 2013

Posted on November 11, 2014 by AndrewB - No Comments

Topics: Financial Institutions, Events