Attending Bank Director’s Acquire or Be Acquired conference in Phoenix, Arizona has become an annual event for the Narmi team. Not only is it a chance to catch some sunshine during the winter months, it’s also a great opportunity to invest in having the right conversations and getting time with the financial institutions looking to grow, innovate, and embrace the future of banking.
And to create space for deeper conversation with these forward-thinking banks and build fellowship outside of general conference sessions, Narmi arranged and hosted a series of events throughout the conference. These events included a welcome happy hour, a wellness hour, a dinner with special guest Ron Shevlin (Chief Research Officer, Cornerstone Advisors), and our annual Phoenix Suns game event.
As we look ahead to our Spring Innovator’s Retreat, these are the 3 main themes that are top-of-mind for digital banking leaders and how we expect them to impact the decisions of forward thinking financial institutions.
Interest rates and the unpredictability of the economy have made bankers pay much closer attention to their deposit growth strategies. New account opening, and the resulting deposits gained from these new customers, is a top concern – especially as the deposit “flight risk” increases with more financial institutions offering higher interest paying products like CDs. Bankers at AOBA understood that this is challenging liquidity, and creating more pressure to address the impact this’ll have on net interest margins as the cost of funds rise.
A positive shift this year, however, is a renewed focus on attracting more digital business clients to grow deposits. We expect this market to remain competitive as more banks implement the technology they need to attract digitally-forward businesses.
Another common theme we heard stemming from the competition for deposits was a recognition that gaining more deposits is only part of the challenge. Once financial institutions have customers in the door, how are they encouraging more deposit and account activity growth?
A big theme the Narmi team was pleased to see gaining more attention this year was how technology can be seen as an incredibly cost-effective way to generate immediate ROI and lay the foundation for scalable growth. While M&A will always be an opportunistic strategy, more C-Suites are seeing the digitization of banking as a top priority for their banks, with more readily available examples showing how technology at scale can yield high returns.
Heading into this year’s Acquire or Be Acquired conference, one topic that’s been top of mind for the Narmi team has been exploring more ways financial institutions can compete for business client deposits. Narmi Co-Founder Nikhil Lakhanpal and Narmi General Manager Taylor Cembalisty moderated two lively discussions with Grasshopper Bank to understand the drivers of its success.
Narmi believes that investing in business acquisition strategies along with the user experience of business digital banking will have the greatest impact on the client experience, and best position your financial institution to compete for new business. To showcase why we believe this to be true, we hosted a discussion with Grasshopper’s Chief Digital Officer Chris Tremont about the role continuous innovation has played in driving business deposit growth.
This discussion explored the evolving competitive landscape for earning business deposits, and ways community financial institutions can out-pace the challengers. To succeed, financial institutions need to embrace what they are best at – ease of doing business – but do so in a digital-first way.
“These are business owners that are consumers too, and they expect an experience where they can get 99% of their banking done without ever having to call, or email us, or walk into a branch.” -Chris Tremont, Chief Digital Officer, Grasshopper Bank
Put another way, financial institutions need to identify the most impactful pain points for business clients, and then target specific technology investments to alleviate them.
Nikhil's General Session discussion with Grasshopper’s Chief Executive Officer Mike Butler gave us the chance to walk through the obstacles that had to be overcome and the decisions necessary to achieve industry-leading success. Together the two leaders further unpacked how Mr. Butler led digital-first changes at Radius Bank, the learnings he was able to apply when growing Grasshopper Bank, and the resulting transformative impact those initiatives had across both organizations.
That discussion resulted in Mike Butler sharing the 3 keys Grasshopper Bank has relied on to unlock growth and digital excellence:
As a digitally-native bank, it comes as no surprise that a strong commitment to digital experiences is crucial to Grasshopper winning and retaining business clients. This commitment doesn’t necessarily mean banks need a large set of digital products, but rather should focus on building great digital experiences for pivotal moments in the business client relationship: “When you think about 500+ business accounts a month being opened that have the same profile that happens in a branch, and you can do it all virtually – in which the client can get that opened in three or four minutes per signer – that's frictionless!”
Support for digital at all levels of leadership has a big impact on a bank’s ability to see a return on investment. Getting there starts with hiring the right talent, and Mr. Butler suggested looking for talent outside of the banking industry: “No matter what strategy you're going to go after, you have to have the right people. You have to have committed people. And when you can create an environment for people in which they don't feel like it's a job, the outcomes are always better than most.”
The idea of partnering with their technology providers means a lot to Mr. Butler and the Grasshopper Bank team. By placing an importance on building a partnership instead of a typical vendor relationship, Grasshopper Bank can narrow their focus on the 3-4 key product experiences they know will impress and retain business clients, and trust that partners like Narmi will support them on that goal: “Once you begin to understand the process of how to work with your technology partner, it does get up and running quickly, but you have to commit time and energy to that. That’s why I call it a partnership versus a vendor.”
Join us in NYC to dive deeper into how modern banks and credit unions utilize technology to beat the competition!
Learn more -> https://www.narmi.com/2023-innovators-retreat
