Issue link: https://nebusinessmedia.uberflip.com/i/1434114
n e w h a v e n b i z . c o m | D e c e m b e r 2 0 2 1 | n e w h a v e n B I Z 25 Stay current with the most important business news in Greater New Haven! Emailed to you on Tuesday, Wednesday and Friday afternoons << SIGN UP TODAY >> GO TO NEWHAVENBIZ.COM/ENEWSLETTERS In Aug. 2020, the bank launched a contactless debit card and in October of this year it announced a new early payday service that will give customers — with a Union Savings Bank checking and direct deposit account — access to their paycheck up to two days early. "A lot of consumers are living pay- check to paycheck these days," Merkle said. "And if we can help in a little way, we want to do that." By year's end, Union Savings Bank, which has $2.96 billion in assets, will also launch a new financial insights service to help customers track how they spend their money and how they can better budget. e important and evolving role financial technology will play in the fu- ture is reflected in Union Savings Bank's technology budget, which Merkle says is increasing by 20% this year compared to the more typical 5% increase in recent years. Merkle says Union Savings Bank's brick-and-mortar locations, which have scaled back hours over the past year, have become less about transactions and more about offering consultation services for customers. e ability to meet customers in-per- son still helps differentiate traditional banks and adds a layer of trust with customers, bankers say. At the same time, partnering with banks versus competing with them can help fintechs leverage banks' existing customer relationships, according to Jorge Santiago, executive vice president of Milford Bank, who oversees the lend- er's digital strategy. "By working [with fintechs] we can improve our service to our customers and [our partner] is able to work with a trusted resource because our custom- ers trust us to [select] good partners," Santiago said. Santiago said Milford Bank, which has $528.4 million in assets, conducts customer surveys and focus groups to learn about ser- vices they want. Milford Bank's newest partner- ship, launched in October, is with FutureFuel.io and offers personal- ized student debt management ser- vices, including loan consolidation and refinancing and programs to convert cash-back rewards and spare change into student debt payments. "It's hard for a community bank to have one specialist on hand who can help with student loan debt, but by partnering with [a fintech], we're able to bring these services at a very [cost-effective] rate to our customers," Santiago said. Google/Amazon experience It's not just the innovation, speed and convenience of today's fintechs that are changing the banking experi- ence, it's also the integrated nature of these digital tools, says Liberty Bank's Mitchell. "Unfortunately, financial services in the United States have [historically] been behind on technology, so the core systems that ran the banks were Jorge Santiago 30- to 40-year-old technologies within a closed system and new features or functions would release twice a year," Mitchell said. "e newer technologies are part of 'open banking' so different systems [talk] to each other." at's allowed banks like Liberty to better communicate a united financial picture for customers. He points as an example to the various apps consumers use for person-to-person transactions, to pay bills or check their credit score. "We can now embed all these fintech vendors [behind the scenes] to give the [financial picture] in one spot," Mitchell said. And that is something the major- ity (60%) of fintech users say they want from a provider. ey also want processes to be faster, according to the Ernst & Young survey. Mitchell says Liberty's new customer onboarding process, which used to take 15 minutes, can now be done in less than five minutes. "You scan your license and the system populates the information and processes the 'Know Your Custom- er' information that is required by regulators," Mitchell said. "e user experience [for banking] has to be like Google or Amazon because that's what people want and are used to." With the global fintech market expected to grow annually at a nearly 14% rate to $190 billion by 2026, the only thing certain for the banking sector is more innovation. "Traditional banks had been doing things [largely] the same way for 200 years," Mitchell said. "But everything has changed." n Global funding for fintech companies Funding (in billions $) '15 0 $100B $200B $300B $400B $500B 0 10K 20K 30K Deals (in thousands) '16 '17 '18 '19 '20 '21 '15 '16 '17 '18 '19 '20 '21 $437B 24,951 Source: CB Insights' State of Venture Q3'21 Report