Financial technology has gone a long way toward speeding up the sheer volume of trading, product offerings and market volatility, as new technologies have created faster ways to make transactions by eliminating physical roadblocks.
Speed, tech and volatility will continue to accelerate. The repercussions will be profound, ushering in a cashless, cardless, virtual and password-less society where face- and-fingerprint recognition will guard our information; social media will seamlessly link our investments, personal finances and money management data; and smart phones and voice commands will enable people to make trades, purchases or payments without ever touching a screen.
That day is already here.
So is the time when virtual cryptocurrencies may well replace paper and coins as tender for financial transactions.
While the biggest banks have been reluctant to deal in cryptocurrencies, some smaller banks — including community banks — are beginning to embrace them as a way to generate new income streams and differentiate themselves from the major players.
But what do we really know about them? We know from the headlines that they’re a form of virtual tender. We also know that in a space of six months, the value of a Bitcoin has changed from more than $26,000 to just below $5,000 — a 70 percent drop. What? Why? And if my bank is dealing in them is it taking a beating? Will my bank close because of that? How will this affect me?
These are legitimate questions. But many community bank customers are afraid to ask, particularly in any public forum for fear of appearing ill-informed. This creates a potentially dangerous situation: an ill-informed public being drawn into commerce they don’t understand but could be greatly affected by. Is there a solution? Enter personal microsites.
Microsites have been used by large and small banks as a way of onboarding and cross-selling customers. Each customer may have their own individual site where they can learn more about what kinds of accounts or instruments they have, and what else might be out there (mortgage/refi loans, car loans, education loans, etc.) that might help manage their financial house. Away from public scrutiny, customers may also be encouraged to open up about personal situations that have financial implications, and look to the bank for solutions.
Why not do the same for global developments like cryptocurrencies? Simply put, customers have an online banker who can tell them about personal financial solutions. Why not use that same banker to tell them more about global financial developments that might affect them?
True, the media bombards the public with information about cryptocurrencies but most of it seems to be written for people who already know about these developments and want to participate. What about the rest of us who are uncertain about jumping in but want to learn more?
Personal microsites can become shallow water, where someone is waiting to catch you — should you jump in — to ensure you don’t drown.
Personal microsites can be adapted to serve customers on a one-to-one basis and keep them up to speed not just on their own developments but what’s happening in the wider financial world.
Sy Syms, founder of the clothing company Syms, used to say, “An educated customer is our best customer.” The same should be true for community banks.
When it comes to helping customers manage finances and understand global banking trends that might affect them, the best advice might be to “cut the suit to fit the buyer.” In other words, don’t try to cram your customer into something ready-made just because it’s there. Be willing to adapt to what your customers need and customize it just for them.
Paula Tompkins is CEO, founder and a member of the board of ChannelNet, a technology-based sales, marketing and service company serving the financial industry. She currently holds two U.S. patents on personalization and modular software design. She can be reached at [email protected]