It’s been a busy couple of weeks in the world of finance, featuring two major conferences. April 1-3 marked the tenth annual conference of the Consumer Bankers Association (CBA), and the LendIt Fintech USA Conference took place April 8-9. We make it a point to attend both of these conferences each year. It gives us the opportunity to learn the latest in both traditional banking and fintech.
Not Just Technology. Effective Technology.
Innovation has long been a focus of the conference, and innovation within the banking industry is increasing at a rapid pace. Fifty percent of payments are now “real-time,” and financial services companies are embracing a culture of change. Many of the conference presentations and discussions focused on effective technology.
Our colleagues at Bridgeforce presented on effective technology change management within organizations. They shared that a whopping 70 percent of tech projects fail to deliver the business value expected. This is mainly due to integration issues and users trying to replicate existing processes rather than thinking about how the technology could improve (or even eliminate) processes. Bridgeforce recommends rewriting the story by having a strong vision, designing based on outcomes, involving middle management and users, and aligning processes to the technology (not the other way around).
Highly-respected financial services industry veterans spoke on how to use technology more effectively. They urged getting out of the habit of designing “big-bang” or “all-or-nothing” projects. Instead, they suggest focusing on what will drive the best value for your business.
Advanced Technology Improves Collections
In the field of collections, the Telephone Consumer Protection Act (TCPA) was a hot topic (although I could have said that for the past nine conferences as well since the TCPA has been a hot topic since its inception). There are still arguments about what “automated” dialing actually means. In addition, there are currently five bills in Congress that would amend the TCPA. Regulations and how they can encumber technology use has been a popular topic of discussion at other conferences this year as well. Katabat CEO Ray Peloso recently covered other telephone trends, namely the continued erosion of telephone landlines, and the importance of embracing omnichannel as a result.
A case study on collections was presented that further proved the many benefits of technology to those in the field. The study showed a 20-30 percent improvement in collection performance when machine learning was used for behavioral segmentation. In addition, providing better self-service options for delinquent customers brought a 5-10 percent improvement in capacity.
We continued to learn and share the following week at the annual LendIt Fintech USA conference. The conference highlights innovation in the explosively expanding fintech market.
Preparing for a Recession
Collections, and specifically digital collections, was a focus for pretty much everyone I talked to at the LendIt Fintech conference this year. People know that an economic downturn is on the horizon. Many were initially focused on building out their underwriting and service functions, but they are now shifting to focus on collections.
I sat in on a session on medical loans. Did you know healthcare’s a three hundred trillion-dollar market? For medical bills higher than $1500, only 26 percent of patients pay on time. This is only expected to get worse. Some healthcare providers are not performing services until payment is received in order to reduce the expense related to collection efforts.
On a more positive note, the need for and trust in technological solutions in lending continues to rise. There are more and more lenders confident in the security and dependability provided in cloud deployments. Automation and efficiency are key as everyone strives to achieve an Amazon-like experience for their customers.
Lenders continue to be project-hungry and resource-starved. One credit union at the conference mentioned having 40 projects on their list for 2019, but in reality, they could only support seven of them. This underscores the importance of lenders purchasing some solutions rather than trying to build everything themselves.
I always return from these conferences energized and excited about where financial technology is headed and how Katabat’s business intelligence tools can help it get there. Are you interested in learning more about how Katabat’s cloud-based collections software can help you deliver an Amazon-like experience to your customers? Get in touch with me at mdandrade@katabat.com.
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Mike leads Katabat’s North American business and brings more than 25 years of experience in banking, software, and software sales to the Katabat team. Prior to Katabat, Mike held a variety of leadership positions at Experian, Swift Financial (now PayPal), and MBNA (now Bank of America). Mike completed an undergraduate double major at the University of Delaware and holds diplomas in consumer, commercial, and mortgage lending. Mike enjoys spending time with his family, boating, motorcycling, running, and volunteering.
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