‘Fintech will not fix banking’: Ron Shevlin on widespread financial institution underperformance

bi and analytics, big data at Anodot

If leading financial institutions are struggling to generate growth, many players in the market are struggling just to keep up. From checking accounts to credit cards, banks and other financial firms are challenged across many of their product lines. Underperforming their peers, these institutions are leaving money on the table.

Cornerstone's Ron Shevlin
Cornerstone’s Ron Shevlin

This underperformance can cost a firm millions of dollars in revenue. Using his firm’s Performance Report benchmark data, Cornerstone Advisors‘ analyst Ron Shevlin found five key ares that banks are leaving money on the table, adding up to $10 million for a financial institution with $1.5 billion in assets.

Tradestreaming had the chance to discuss these current trends with Cornerstone Advisors’ Ron Shevlin.

financial institutions are losing millions in revenue because of underperformance
5 key areas of FI underperformance


Branch-centric banking doesn’t work for the most part anymore. Have we reached Branchamegaddon?

Branch-centric banking may not work anymore, but that doesn’t mean that there isn’t a place for branches in a bank’s channel delivery strategy. Despite the death proclamations from the pundits, we haven’t reached Branchamegaddon — yet. The real impetus for the implosion isn’t mobile technology and mobile adoption. It’s the development and deployment of AI in tools like chatbots. When these tools and technologies mature, branches are toast.

How are so many financial institutions underperforming and what to do about it?

There’s a bimodal bifurcation in the banking industry. I don’t know that I’m using the words “bimodal bifurcation” correctly, but it sounds good. What I mean is this: there are many well performing FIs in the industry and many underperforming. The underperformers may be in the “wrong” geographic area, may be too small to compete, may be overwhelmed by compliance costs, may be laggards from a technology perspective, may simply not have evolved fast enough for today’s competitive demand.

What to do about it? For many the answer is going to have to sell and get acquired. Plain and simple. There will continue to be a ton of consolidation in the banking and credit union markets for at least another 5 years.

Fintech will fix banking. True of false?

False. Here’s reality: There will always be some group of people who will claim that banking is broken: whether it be entrepreneurs looking for opportunities, consumer advocate groups who believe that people have been wronged, or politicians looking for scapegoats to blame for their own stupid regulatory actions. Whatever impact fintech has on “fixing” banking will be downplayed by those with a vested interest in painting banking as broken.

You’re now CEO of Wells Fargo (sorry!). What do you do?

Let’s assume you mean the new CEO of Wells Fargo. Because if you mean, I’m John Stumpf, then the answer is clear: I donate some (significant) portion of my past bonuses to a fund to be used for restitution to the victims — who, by the way — are both customers and remaining employees.

As the new CEO, I do 2 things: 1) I announce a new FREE checking account. FREE means no monthly fee, but means no overdraft fees, no ATM fees, no any freaking fees, to be offered for the next 5 years. 2) I announce the elimination of “products per customer” as an internal performance measure, and adopt a new performance metric that a consultant named Ron Shevlin calls the Referral Performance Score.

Hear more from Ron Shevlin as he presents at Tradestreaming Money 2016 on November 14 in New York City.

[podcast] Uberization of finance? Ron Shevlin on the bank of the future

Ron Shevlin on the bank of the future
Ron Shevlin, Cornerstone Advisors
Ron Shevlin, Cornerstone Advisors

If you listen to NPR, you’ll sometimes hear a recording artist, someone like Lyle Lovett, referred to as “an artist’s artist”. Meaning, an artist that other people of the same craft can appreciate and love.

Our guest on this episode of the Tradestreaming Podcast is an analyst’s analyst. For the past 25 years, Ron Shevlin’s worked with the leading financial services, consumer products, retail, and manufacturing firms in the world. Ron’s the Director of Research at Cornerstone Advisors, a consulting firm to the banking and credit union industries, where he specializes in retail banking issues including sales and marketing technologies, customer and marketing analytics, social media, customer experience and consumer behavior. He was previously at Aite and Forrester covering the financial services space.

Most importantly for us, he’s the author of weekly articles he calls Snarketing published on the Financial Brand website that combine his keen eye for trends and opportunities for growth in the financial services space with his great sense of humor. It’s a must read for me and I hope it will become part of your reading list, too.

Listen to the FULL episode

In this episode, we:

  • explore whether financial services is truly becoming uberized
  • dive deeper into Ron’s vision for the future of financial services which he describes as the industry’s migration from product providers to a platform or ecosystem of financial services much like Amazon’s platform for ecommerce



Photo credit: COMSALUD via Visual hunt / CC BY