What Hurricane Matthew taught us about banks and fintechs

When Hurricane Matthew swept through Haiti, the Bermudas, and finally up the East Coast, the results were devastating: at least 900 people died in Haiti, and another 33 people lost their lives to the storm in the U.S. Alongside the tragic certainty of these deaths lies the economic uncertainties churned up in the storm’s wake. Haiti is expected to face up to a decade of economic recovery, while Matthew may have cost North Carolina billions in losses.

Unlike other natural disasters, however, the U.S. knew about Hurricane Matthew well in advance, so it provided the perfect opportunity for banks and fintechs to prove their customer care mettle. “An approaching storm puts people in a position of vulnerability,” said Jon Picoult, founder & principal of Watermark Consulting, a U.S.-based customer experience advisory firm. “As such, it affords a great opportunity for companies to proactively communicate with their customers and demonstrate advocacy – be it by sharing relevant information, providing reassurance, or offering some other type of assistance during the customer’s time of need.”

Some national banks grasped the importance of connecting with their frightened customers, and did so (community banks in the affected areas aren’t being counted for the purpose of this article, although, as community banks do, they were very communicative and supportive regarding all things Matthew).

Witness USAA’s epistle to customers in Matthew’s path (full disclosure: I bank with USAA):

With this message, the insurance, banking, and investment company serving military personnel, veterans, and their families effectively ticked off everything on Picoult’s list. It shared relevant information to help customers protect their property, it provided reassurance, and it offered three different paths of assistance: online, digital, and phone.

The company also sent out three tweets about hurricane safety precautions:

Obviously, the more customers took steps to protect their property, the less USAA would have to pay out in claims. Yet the fact remains that the way in which the company communicated with customers in need was timely and on the mark. Not to mention that USAA followed up, by email


and front and center on its website:


Like USAA, JPMorgan Chase also understood the importance of connecting with customers as Hurricane Matthew fast approached. “On Wednesday afternoon, we posted a Weather Update ad (see bottom right) on the front page of chase.com that was visible only to people with IP addresses in Florida,” said Chase’s Tom Kelly. “That took them directly to the Branch Locator, which the bank updates in real time.”

Chase kept the severe weather ad up for 6 days.
Chase kept the severe weather ad up for 6 days.

The JPMC’s retail arm also tweeted about branch openings after Matthew passed through, showing not just its customers but the world that Chase was concerned about its customers on the east coast.


What of fintechs? At the time of publication, Credit Karma, Wealthfront, Square, and Quicken Loan’s Rocket Mortgage had not responded to Tradestreaming’s request for a comment. But PayPal did. “We aren’t doing anything specific on Venmo,” said Andy Lutzky, vp at Edelman. However, “in an effort to support relief efforts, Xoom is waiving fees for all services through October 15.”

So although PayPal graciously eased remittances for storm-struck Haitians, it didn’t treat the hurricane as a customer care issue. The fact that one of the more popular P2P money transfer apps didn’t see the need to address Hurricane Matthew suggests that fintechs might not be quite caught up with banks when it comes to customer care.

Of course, to be fair to fintechs, part of the reason that national banks seem to have outperformed fintechs in the emergency customer care category during the hurricane is because banks have been at the business longer. “As we’re in early days of our on-demand insurance product, and currently only available in Australia, we don’t do any proactive messaging around natural disasters,” Jeff Berezny, vp of marketing and communications at online insurer Trov.

The company is at least thinking about how natural disasters and customer care intersect. “A broader, proactive plan related to prevention is in the works that could include content-related to natural disasters, but it has not yet been activated,” Berezny said.

This is not to say that every national bank was on top of their customer care game as Hurricane Matthew stampeded towards Florida and North Carolina, nor that every fintech company was oblivious of the storm. But the above examples suggest that fintech companies, whether they want to go it solo, partner with banks, or become banks, could take a page or two from banks’ trusty customer care books.


Snapchat’s upcoming IPO as a refrain in the love song banks have with social media

Financial institutions and social media companies go together like [insert your favorite alliterated pairing … or rama lamma lamma ka dinga da dinga dong]. Social media companies, in spite of their possible role as revolutionary vehicles (think Twitter and the Arab Spring) and decentralized platforms for social change (think Facebook and the Ice Bucket Challenge), are very much dependent upon standard bank services.

Both Facebook and Twitter have great need of bank services, for investments, employee payments, and offshore get-out-of-tax-free accounts, just to name a few.

Banks, on the flipside, cannot really get by without social media. Firstly, because by 2017 the world is expected to have 2.5 billion social media users, and banks won’t want to miss that branding and marketing opportunity. And it is a real opportunity: Avidia Bank, for example, found that its digital marketing strategy to promote smartphone cash withdrawal app ‘Cardless Cash’ led to a 13 percent increase in mobile app enrollments and an 83 percent positive user sentiment for Cardless Cash.

This interdependent love story between banks and social media platforms is being played out with Snapchat. Snapchat needs banks to lead its upcoming IPO. Meanwhile, banks are exploring exactly how they can benefit from being present on Snapchat. Bank of Ireland, for example, is using Irish Snapchat superstars to connect with younger customers, while JPMorgan Chase has experimented with the platform as a recruitment tool for millennial talent.

Not everything is peaches and cream up at the bank and social media villa, though. While banks might be ready to go steady, social media platforms are playing fast and loose when it comes to P2P payments. Millennials have the highest user rate of P2P payments (32 percent as opposed to 22 percent in the general U.S. public), and Facebook’s free P2P payment service is right at their fingertips.

While many banks are getting in the P2P payment game via clearXchange, millennials are already all over Facebook. A 2016 study by Ipsos found that 83 percent of men and 91 percent of women aged 20-35 in the U.S. have a Facebook account. And, like Facebook, Snapchat has its own free P2P payment service called Snapcash, powered not by a bank, but by Square.

Social media might be unfaithful to banks. Heck, these firms may be trying to become their own banks. But it seems unlikely that banks will ever give social media up, let them down, or run around and desert them. Why? Well, back to those 2.5 billion social media users. In terms of Snapchat, the statistic that really matters is that over 60 percent of U.S. 13- to 38-year-olds are Snapchat users.

Oh, Snap.

Top 10 things JPM’s Jamie Dimon said about fintech

When it comes to fintech, the CEO and Chairman of the US’s largest bank by assets is very vocal. JPMorgan’s Jamie Dimon frequently hits the road to visit startups in Silicon Valley, he’s hitting the podcast circuits to talk fintech, and he dedicates a lot of ink in his firm’s yearly investor communications to discussing the future of finance.

Dimon’s always happy to talk about fintech and he’s outspokenly encouraging and critical of the industy.

In Dimon’s world, fintech isn’t really anything new. During his banking career, technology has always played a major role in creating new products, reducing costs, and providing a better consumer experience. But as CEO, it’s his job to understand exactly what advantages fintech is bringing to the financial ecosystem and then partner, build, or buy his way to bring these new technology to his current and future clients.

Fintech, Silicon Valley, and Incumbent Banks

Kara Swisher does a good job getting Dimon to open up on her Jamie Dimon’s interview on Recode Decode , though when you listen to the audio, he tries hard to stick to his talking points. Dimon isn’t in the Valley to mess shit up; instead, he’s there to make peace, to identify promising technology, and to partner. Sure, fintech’s a threat for incumbent financial institutions but in Dimon’s world, everyone can find a way to work together.

On traveling to tech hubs like Silicon Valley:

  • “I come [to Silicon Valley] all the time and so does much of our management. We use these trips to learn about what’s keep our people a little bit scared, to make sure we learn how to use things things to better serve our clients.”

On how fintech isn’t really new:

  • “I don’t buy that fintech is completely different. Technology has been changing the world since we invented agriculture. My whole business career technology has been a critical part of what a bank does. Fintech isn’t just about good technology but about solving business pain points.”

On how fintech threatens (or doesn’t) his business

  • “I’m not nervous about fintech changing the way people are changing their banking habits but I think, in a capitalist world, it’s good that your business model gets attacked. I applaud that. That’s why we’re all here in Silicon Valley. Some of our businesses will be hard to attack — others will be easier to attack. Like payments. There are weaknesses in these systems that were built a long time ago.”

On JPM’s commitment to payments

  • “I expect to win in payments.”

When asked about how financial technology is replacing real jobs:

  • “There are downsides to flying — people die every now and then. Do you want to stop all air flights?”

Bloomberg’s John Micklethwait’s feature interview with Dimon

Jamie Dimon Bloomberg interview
Cover artwork: Kelsey Henderson

Earlier in 2016, John Micklethwait saw with Jamie Dimon to conduct what turned out to be a pretty wide-ranging interview. The Bloomberg reporter questions the JPM CEO on his firm’s role in the financial crisis, how the banking sector has (or hasn’t) rebounded afterwards, fintech’s role in the financial ecosystem, and how banking has evolved through Dimon’s 30 year career.

When asked if he thought banks were more moral than markets:

  • “A bank is a relationship. I can’t desert you and expect to have a strong relationship afterward. If I told someone, “I know you’ve been buying milk from me and you need milk to survive. But the price is no longer $2 a gallon. It’s going to be $40 a gallon. I’m going to bankrupt you.” What do you guys think of me? You would hate us. I mean, obviously some of these banks did bad stuff. Yet even in the depths of the crisis, banks didn’t materially change the prices for clients.”

On the mundane world of lending and why fintech does it faster:

  • “Let’s look at lending, where they’re using big data for the credit side. And it’s just credit data enhanced, by the way, which we do, too. It’s nothing mystical. But they’re very good at reducing the pain points. They can underwrite it quicker using—I’m just going to call it big data, for lack of a better term: “Why does it take two weeks? Why can’t you do it in 15 minutes?”

On how he’s positioning JPM to speed up the lending process:

  • “For example, they might lend to one of our customers who’s got a $200,000 JPMorgan Chase loan, and this person wants to get another $20,000 for a new truck or a piece of equipment. And what does he do? He goes with them, because he gets it in 15 minutes. If he goes back to the bank, he may have to go through this whole big long process for that $20,000. Can we do something like that? Of course we can. I’ve asked our people, “Why don’t we just put a revolver on top of our basic loan?” Make it easier for the client.”

An investor’s perspective: Fintech and JPMorgan

In his yearly missive to investors, fintech discussion has become kind of a regular column. It’s within his periodic communication to investors [.pdf] that Jamie Dimon is at his most comfortable discussing the technological challenge to banking. It’s also where he’s at his most vulnerable, as the NYT’s Ron Lieber recently took the bank CEO to task for some seemingly disparaging comments he made regarding fintech startups (comments that Dimon said were taken out of context).

On banking’s general appetite for new technologies:

  • “If you look at the banking business over decades, it has always been a huge user of new technologies. This has been going on my entire career, though it does appear to be accelerating and coming at us from many different angles.”

On how some fintech startups are selling consumer data way after a user stops using the technology:

  • “Many third parties sell or trade information in a way customers may not understand, and the third parties, quite often, are doing it for their own economic benefit — not for the customer’s benefit.”

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