CEO Message: The Uberization of Banking

I am reaching an age where I am starting to work on my bucket list, things I want to do or places I want to see before I ‘kick the bucket’ as they say. I crossed one of those items off my list last month by traveling to Europe for the first time in my life.  I spent an entire week in Paris, France.   As the trip grew near, I found myself becoming anxious about the potential obstacles.  What about the language barrier and not understanding my server or being able to read a menu or street signs? No problem – I downloaded Google Translate to my Smartphone.  It translates any language both ‘from’ and ‘to’ on the fly in text and voice. You could even hold your phone over text like a menu and have it translate the language. That solved that major concern.

My wife and I consider ourselves kind of amateur ‘foodies’.  Besides seeing all of the points of interest and tourist attractions, we wanted to really experience the Paris restaurant scene.  We had heard so much about it. With only a week in Paris and over 8,000 restaurants, we weren’t sure where to start in making some early selections. While ‘Open Table’ is my go to app in the US for making dinner reservations, it is not widely utilized by the restaurants in Paris. What I did find before traveling to Paris was the Yelp app. I always thought of the Yelp app as the application only for business and restaurant reviews. What I discovered is that it had really morphed beyond that in recent years. In Paris, I could use Yelp to search for restaurants by type of food, read reviews and see the menu.  If I liked what I saw, I could book online or call to schedule my reservation. It had maps to guide you by walking or by vehicle.

I solved my anxiety over possible language barriers and maximizing our restaurant experience by the use of my smart phone apps Google Translate and Yelp. What about transportation around Paris? I took one look at the Paris metro train map and nearly had a panic attack. It showed a maze of train lines crisscrossing all over Paris. I am a Midwesterner from Kansas where everything is above ground and laid out in one mile square sections. The Paris Metro looked way too hard for me so I quickly dismissed it as a transportation option. What about just using Taxi’s? Unlike just hailing a taxi cab in New York City, the streets of Paris are so narrow that you must use designated pickup locations.  I learned these are sometimes difficult to locate. How about just calling a cab? That involved searching online for a list of taxis and their phone numbers and placing an expensive international call.  Payment after the ride meant dealing with currency for the ride and tips. It might have been okay but sounded like this was going to be a hassle every time we wanted to go somewhere. My son, a millennial that lives in the Kansas City urban core in a Loft with minimal need for a car, told me to use Uber. I had never used Uber but certainly had heard a lot about it in the last couple of years. He convinced me to download the Uber app and load a credit card into the app along with my email address. I used the Uber app no less than 20 times in the week I was in Paris. With a push of a button I had a ride in no more than 3 minutes and when I reached my destination,  I simply opened the door and jumped out. An email receipt of the trip was received in minutes.  Uber, I learned, was far easier than finding or calling a taxi and the cost was about the same as taxis.

Having a Smartphone and using apps like Google Translate, Yelp and Uber made my trip to Paris a trip of a lifetime; one I could easily and effortlessly enjoy.  Because the apps eased my anxieties and made my life easier, I became not only a customer, but an evangelist to all my friends and now you. Which leads me to the point I want to make in all of this; technology has no doubt changed how we live and interact in this world. Uber has disrupted the taxi business. Amazon has disrupted traditional brick and mortar retail.  Airbnb is beginning to disrupt the lodging business.

What is on the horizon that will disrupt the banking and lending business? I suppose anything that can make banking less painful for a consumer or business customer has the potential to be disruptive. Sure mobile banking, online bill payments along with remote deposit capture are strong moves in that direction for both retail and business customers, but these are just a good start. Have you seen the TV ads for Rocket Mortgage by Quicken Loans? It certainly leaves you with the impression you can apply and be approved for a mortgage loan with the push of a button on your Smartphone and do everything online.  I am not sure who will emerge to totally disrupt banking and business lending.  I am betting that as I write this article, the planning, strategy and execution are already underway to do so. In October last year I touched on the non-bank lenders that are emerging for the online funding of business and personal loans. All are trying to disrupt the market with the use of technology. No clear winner has emerged but eventually I believe one will.

In April 2016 the Wall Street Journal published an article ‘The Uberization of Banking’. You can Google it to read the entire article. In the article it talks about FinTech and SoFi. SoFi is looking to disrupt lending by moving it all to the Smartphone. Very much the same as Uber , Amazon and Airbnb have already accomplished.

Finally, I want to pull of this together into a conclusion. I hope you don’t find this too much of a stretch, but I will try to make my point. My point is that you cannot deliver an ‘Uber’ experience to a prospective or existing loan customer on a foundation that involves tools or applications that are not integrated.  Lack of integration leads to inefficient internal processes and workflow. Tools and processes that worked or were designed in the 80’s and 90’s are likely as relevant today as the Yellow Pages phone book.  One shows up my door step each year and goes directly to the recycle bin. It’s time to pitch them and become more relevant in order to compete and thrive.

If you follow me, you know that I am a long time evangelist of the banking and business lending industry.  Specifically the need to combine both asset risk management practices and internal credit and loan administration in an approach that leads to a sound lending culture delivered efficiently. This is a requirement for growing your loans competitively but doing so in a sound manner to minimize loan exposure. Most financial institutions involved in commercial or agricultural lending have done a great job keeping up with delivering new retail type technologies I mentioned earlier to keep and attract customers. However, I will estimate that most institutions in the U.S. have not adequately addressed their internal credit and lending administration functions.  Maximizing efficiency in these areas while managing credit risk delivers a better experience to loan customers and prospects. We developed the Square 1 Credit Suite back in 1996 for this very purpose. You are a customer of Suntell and already know this. For those that are not, consider ‘Uberizing’ your internal lending credit and loan administration in order to give your prospective or existing loan customers an ‘Uber’ experience.

We appreciate your business and loyalty!

Duane Lankard
Suntell CEO

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