Independent Banker - December 2022 - 19

Next: Two words that mean so much 
From head-to-head competition to
embedded finance, how community
banks respond should align with their
individual business strategies.
" Keep it straight and to the point
in your banking app, " advises Jordan
Hirschfield, director, prepaid advisory
services at Mercator Advisory Group.
" Partner so you can have access to an
Apple Wallet, a Google Wallet, PayPal,
Amazon, whatever it may be, and
then keep your priorities in your app
focused on banking. People will still
come to your app when they know
that they're dealing directly with you
for banking needs. "
In addition, community banks
need to evaluate their partnerships
with fintechs and other third parties.
When customer data is shared,
those integrations must be met
with an elevated level of scrutiny
and a thorough understanding of
data protections.
" Keep your priorities in your app focused
on banking. People will still come to your
app when they know that they're dealing
directly with you for banking needs. "
-JORDAN HIRSCHFIELD, MERCATOR ADVISORY GROUP
" Partnering with fintechs and new
entrants can offer useful means to
bring new products to market, but
community banks should recognize
that these new technologies may
introduce new risks to consumers, "
says a CFPB spokesperson. " It is
important that community banks
understand how consumer data may
be captured through app usage, and
that they provide as much insight
and transparency as possible to
their customers around the potential
instances where data may or may not
be captured. "
Despite this new form of
The CFPB gets involved
This convenience-first attitude among consumers has triggered
concern from the Consumer Financial Protection Bureau (CFPB),
causing it to release a report, " The Convergence of Payments and
Commerce: Implications for Consumers, " in August. With a partial
focus on super apps, the report paints a picture of how such
technology is unfolding in the U.S. and its impact on data security.
In addition, in a statement, the CFPB emphasized the actions
it is taking to " work across the payments ecosystem to assess
the extent to which a consumer's information might be used for
purposes the consumer did not intend or understand. "
" We have issued market monitoring orders to assess the
business practices of large technology companies operating
payment services in the United States, " says a CFPB spokesperson.
" We will provide reports on the information obtained in response
to these orders on an ongoing basis based on the data collected.
The CFPB remains concerned about instances where these apps
may create more opportunities for companies to aggregate and
monetize data without consumer knowledge. "
competition and the responsibilities
it introduces, community banks may
have an opportunity to emphasize
the unique services they provide.
Super apps create an environment
for community banks to emphasize
where they excel: in safety,
security and banking relationships.
Consumers already trust their banks
more than tech giants, and that trust
will offer a key differentiator during
the rise of the super app.
In addition, the ability for
consumers to connect with someone
they know still takes top billing: 42%
of consumers between the ages of
21 and 55 say they would leave their
bank if it eliminated account manager
support. In short, the personal
relationship matters.
" The key word is relationship-that
is the secret sauce of the community
bank, " says Hirschfield. " For a
community bank, it's showing that
the digital world is just a segment of
the value that they can produce. " 
Colleen Morrison is a writer in Maryland.
independentbanker.org Q 19
http://www.independentbanker.org
Independent Banker - December 2022

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