Monday, December 30, 2013

Banking 2.0: Disrupting the Industry

Community banking has been called into question again. I agree there are far too many small banks. Of the 6700 banks over 2000 have less than $100MM in assets. Additionally, hundreds of small banks failed or were merged during the financial crisis. Nonetheless, community banking, if not community banks, has a bright future. Changing technology promises to upend the branch orientated delivery-there are over 85,000 domestic branches. The technology will supplant the branch system in ways not yet fully understood.

This disruption will cause a massive change in strategies. Institutions, both bank and non bank will struggle to adjust. Those adapting will probably divest branch networks and acquire new technology and consolidate thru mergers to succeed. See Community Banks recently published in the American Banker for a discussion.

Happy New Year.


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