What are they doing, you ask? They're playing in sandboxes – regulatory fintech “sandboxes”, that is. And they're making strides towards greater – and faster – banking innovation than otherwise possible on the highly-regulated financial playing field.

In recent years, Silicon Valley has produced a vast amount of innovation at a break-neck clip. But innovation for most financial institutions is typically slow-moving, grueling and highly regulated. 

What's needed for transformational innovation is freedom – the freedom to test, fail and try again. To meet the needs and expectations of 21st-century consumers, banks and other financial institutions must have freedom to evaluate new concepts, try out new technologies and test new products. 

And that's where Mirador Co-Founder and President Trevor Dryer believes a fintech “sandbox” could help banks accelerate the pace of innovation and usher in new, positive developments for consumers. In his latest Forbes article, Trevor Dryer explains the fintech sandbox and why a Federal fintech sandbox is crucial to banking innovation and survival in the 21st century.

Check out the full article on Forbes.

Trevor Dryer is a member of Forbes Finance Council and an advocate for small business lending and fintech. He regularly contributes think pieces about trending topics in the banking industry, improving access to capital and small business lending. Be sure to follow his contributor page.

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Enter fintech startups. 

Working in the same space as banks, alongside banks and even competing with banks, fintechs claimed the world of financial innovation as their own. And banks, hesitant to add even more complexity to an already complicated environment, conceded the innovation game to fintechs. 

But times are changing, and banks – big and small – are stepping back onto the playing field. Large banks are building out robust, in-house teams with technology hires. Small banks are partnering with fintech startups. Thus, banks are reclaiming the innovation turf.

Can community banks and credit unions compete in the innovation game? Mirador Co-Founder and President Trevor Dryer thinks they can if they take time to understand the trends that inform when and how to take action. In his latest Forbes piece, Trevor explains five fintech trends – trends that he believes will shape the financial playing field in 2020 and beyond. And with annual planning season around the corner, now's the time to ready your institution for imminent change.

Trevor Dryer is a member of Forbes Finance Council and an advocate for small business lending and fintech. He regularly contributes think pieces about trending topics in the banking industry, improving access to capital and small business lending. Be sure to follow his contributor page.

What's ‘bank' speak? It's the technical jargon banks use in the everyday of running a financial institution – particularly when collecting financial information from SMB loan applicants. It's a language most bankers, accountants and financiers are fluent in, but not so for many small business owners. 

In fact, a series of focus groups with small-business owners conducted by the Federal Reserve discovered found that while SMB owners want to work with traditional banks for their lower-priced loans, SMB owners often became confused during the application process – especially when comparing loan products. Further, when SMB participants were asked, “How much will these various options cost me?”, the common answer was, “Lost in the technical jargon.” 

What's the impact of ‘bank' speak to SMB lending? Simply, more SMB borrowers are applying for loans with alternative lenders – about 32% in 2018 compared to 19% in 2016 per this Small Business Credit Survey.

But, as Mirador EVP and GM Trevor Dryer notes, banks can stem the tide of SMB owners seeking out alternative lenders for a simpler, jargon-free application experience. In his latest Forbes article, Dryer shares three simple things banks should do to make their small business loan applications friendlier and less confusing for SMB owners, creating a better experience and preserving a bank's most important competitive advantage: its customers. Read the article now.

A Forbes Finance Council member, Trevor Dryer is an advocate for small business lending and a fintech proponent. He regularly contributes think pieces about small business lending, trending topics in the banking industry and improving access to capital. Follow his contributor page.

The more timely question is how can financial institutions nurture relationships and know their customers in an era of digital relationships?

Constant Conversations

Years ago connecting with friends often meant conversations in-person, over dinner, over the phone or even over the backyard fence. The digital era has changed that. Now, friends and family are available virtually 24/7, agnostic of their location, time zone or even bedtime. Whether through social channels, video chat or text, maintaining relationships, picking up the conversation where you last left it, is no longer dependent on time, location or even platform. Building and nurturing important relationships is a 24/7 digital affair.

Coordinated Conversation

The digital era has changed how businesses nurture customer relationships. Having conversations with customers is no longer relegated to scheduled calls, appointments in an office, or drop-by encounters in a branch. Digitization extends the conversation across time, space and channel. And with a majority of customers banking online and on mobile, more consumers expect their financial institutions to be available 24/7 and to remember their last interaction – regardless of the communication channel. Simply, they expect a seamless, omnichannel experience.

Consider this scenario: You meet a friend for lunch to plan a trip you're taking together. Later, you check your social profiles and think of a question for your friend. Then you remember your friend doesn't do social. So you go to text your friend with the question, and you recall your friend doesn't use a smartphone – and doesn't text. So you phone. The line's busy, and voicemail, full. What kind of experience is that? Frustrating, at best. Destructive, at worst.

That's the kind of experience institutions create for customers when they fail to extend the conversation, the experience, across all channels. Simply, they fail to offer a coordinated customer experience, and, frankly, they risk damaging their customer relationships.

Digitally-enhanced Relationships

Digitization extends the conversation across channels and can even enhance the face-to-face interactions some customers crave. Let's say a small business owner decides to complete a loan application. She discovers her bank offers a small business loan application online and completes that application, at night when she has time to work on finances. The next day, she decides to drop by the local branch to ask a question about the loan. She's greeted by a loan officer who immediately finds her digital loan application and answers her questions. What's more, the information noted when they spoke in-person is visible to her when she logs in that evening and is available to the service team when she calls the bank with another question the next day. For this customer, digitization replaced a potentially disconnected experience with a holistic, omnichannel experience, an experience that demonstrates to the customer that her bank knows her, is interested in her and wants her business.

Far from threatening human connections, digitization can transform potentially disjointed customer interactions into better customer experiences. And better customer experiences can translate into stronger relationships, increased loyalty and higher retention. Actually, Mirador partner banks typically are able to reduce loan processing times by more than 50% and increase application-completion rates to 65%+ (compared to a 25% industry average). And the result for small business lenders and their customers is nothing short of transformative.

Learn more about how Mirador is empowering lenders to transform their traditional lending processes.  And peruse these dos and don'ts of digitization for insights on starting your institution on its journey to digitization.

But If you think that means the bank branch is dying, think again. Over 50% of consumers – including “digital native” millennials – still pay regular visits to brick-and-mortar branches, even if only to make deposits or cash withdrawals.

Does the future hold room for bank branches? Absolutely. Consumers still crave human interaction. But, as Mirador EVP and GM Trevor Dryer posits, branches must serve an entirely different function to find relevance in the not-so-distant future. In his most recent Forbes article, Dryer offers examples of present-day financial institutions that are morphing their bank branches to stay in-step with changing consumer needs. And he suggests how banks – and their branches – can stay relevant in a digital-first era. Read it now.

Trevor Dryer is a Forbes Finance Council member, an advocate for small business lending and a fintech proponent. He regularly contributes think pieces about trending topics in the banking industry, improving access to capital and small business lending. Be sure to check out and follow his contributor page.

The near ubiquity of the internet and mobile devices has changed how Americans gather information, make decisions and even manage relationships. With a majority of 69% of US adults, and 88% of those aged 18-29, using some type of social media, the demarcation between real life and virtual life is fading.

Time and Space for Relationship

In the pre-digital era, relationships, communications and business were limited by time and space. A merchant had to interact with a customer at a given time in a specific place. Relationships were forged in brick and mortar or by one-to-one encounters. And it wasn't too long ago that the business of lending had to be done in an office, face-to-face with a loan officer or by difficult-to-schedule phone calls with rounds of phone tag.

Now, business is done 24/7, at home, on-the-go, outside – wherever consumers find themselves and whenever they find time for a transaction. And new relationships don't necessarily start in a physical locale or at a set time. Instead, social platforms and digital tools have created an environment of ongoing introductions and connections. We've moved beyond the limitations of the physical into a digital environment where we meet one another virtually – anytime, anywhere.

New Relationship Model

The rise of the digital age has changed finance profoundly. In the last few years, neo-banks and fintechs have run full-speed into digital banking and lending, bringing consumers with them and igniting a digital movement among traditional financial institutions. In fact, a recent American Bankers Association (ABA) survey revealed that roughly half of large banks and a third of small banks are already using a digital loan origination channel. What's more, about 80% said they're interested in digitizing their small-business loan processes.

Digital technology is empowering financial institutions to initiate interactions, enhance relationships and create seamless experiences for account holders and their own employees. Being more available to account holders no longer means keeping offices open longer. On the contrary, digitization is opening doors to 24/7 omni-channel availability without the need for longer office hours.

And the evolving digital relationship model facilitates a continuous conversation between lender and borrower, enabling lenders to manage the lending process, answer questions or collect information digitally. Gone are the time and space constraints of the old relational model.

Creating Digital Space

With its digital loan application and supporting tool suite, Mirador is outfitting financial institutions with technology that creates digital space for the lending process. The Mirador Platform provides a digital meeting place where lenders can guide borrowers through the application process, provide visibility to loan status and assist borrowers in completing documentation.

Digitization is transforming the traditional small-business lending process into an experiential relationship that's engaging, efficient and profitable. In fact, Mirador partner banks typically increase application-completion rates to 65%+ (compared to the industry average of 25%) and reduce time spent processing loans by more than 50%.

And financial institutions who make space now for digital relationships are positioning themselves to stay well ahead of the competition – and obsolescence – later.

Read more about how Mirador is helping FIs transform their traditional lending process.  And be sure to view our step-by-step guide to digitization for even more insights.

Let's just say the relationship is big. In fact, “big data” is helping a growing number of companies create personalized experiences that make it easier and faster for consumers to find what they're looking for. Think Apple, Netflix or Amazon.

For many banks and credits unions, however, “big data” may conjure thoughts of privacy issues, compliance questions and regulatory risks. Further, some may even think creating standout experiences with “big data” means big bucks.

The reality is most financial institutions already have the data and the safeguards they need to create seamless customer experiences. They simply need to put them to work. But how can they harness data to power better customer experiences? What about the worries we hear from consumers about data privacy?

In his latest Forbes article, Mirador co-founder Trevor Dryer discusses “big data,” the concerns surrounding its use and suggests three ways banks and credit unions can use the data they already have on-hand to create seamless experiences that delight account holders without risking privacy. Read it now.

An advocate for small business lending and fintech, Dryer is a member of  Forbes Finance Council. He regularly contributes think pieces on improving access to capital, small business lending considerations and trending topics in the banking industry. Be sure to follow his contributor page.

Although regulators and regulation exist to prevent the kinds of financial crises we've experienced on both sides of the 21st century mark, these safeguard regulations have also built a barrier to entry for fintechs. Many fintechs simply lack the time, financial clout and patience to move through the bank-startup process. And fewer fintechs in the space mean less experimentation and innovation.

What's more, banks are growing increasingly risk averse and are steering clear of the kind of creative testing needed to improve poor customer experiences.

But small business customers demand better banking and lending experiences, according to a recent Federal Reserve survey.

Is there a balance to be found between necessary regulatory safeguards and the creative freedom essential to create better customer experiences? Can banks safely test out new digital concepts to improve customer interactions?

In his latest Forbes article, Trevor Dryer offers an idea that could help financial institutions find the freedom to innovate safely and manageably without fear of crossing regulatory boundaries. Read it now.

As a contributing member of Forbes Finance Council, Dryer writes about improving access to capital, small business lending and developing trends in the banking industry. Find his latest articles on his contributor page.

The landing impacted many. The Mirador team recently facilitated a panel discussion about a story that began that day. The discussion at the 2018 American Banker Small Biz Banking Conference highlighted the experience of Patrick Harten, FAA Air Traffic Controller, co-owner of Long Beach Brewing Company and one of the air traffic controllers who guided US Air Flight 1549 to safety on the Hudson River.

Mirador CEO and Co-Founder Trevor Dryer explored Patrick's experience on January 15, 2009 and how his long-time “retirement” dream, Long Beach Brewing Company, was finally realized. With the help of the friends he made among landing survivors, Patrick found the financing he needed through NYBDC, a B of A lending partner, and Mirador’s digital lending platform.

Joining Trevor and Patrick for the conversation were Bryan Doxford, SVP and Program Manager of Community Lending for New York Business Development Corporation (NYBDC) and Pamela Seagle, Global Women's Programs Executive for Bank of America and herself a survivor of the Hudson River landing.

After telling their stories of January 15, 2009, the panelists turned their attention to the connections that led Patrick to finance his small business. For Patrick, a simple digital lending process and the ability to apply online for an SBA loan through the Mirador Platform were key to fulfilling his dream.

As they discussed Patrick's small business lending experience, panelists touched on themes prevalent throughout the conference. Here's a sampling:

• Customer Experience. Panelists agreed that understanding customers, their expectations and behavior and infusing that knowledge into product discovery and delivery makes the difference between a successful transaction and a failed one. As one of the keynote speakers from Wells Fargo noted, “ease of doing business” is the number 1 driver of customer satisfaction in small business banking.
• Gamification. Bankers and fintechs alike touted gaming design as a model for simplifying digital lending. Introducing gaming principles like asking borrowers to complete a simple task or set of tasks before proceeding on to the next task, could simplify - and dramatically increase completion rates for - small business loan applications.
• AI and Bots. With the advent of more sophisticated AI, consumers speculate that bots will replace humans in many industries. The resounding conclusion of conference participants is that the bank of the future holds a place for BOTH bots AND bankers. Technology automates mundane tasks, freeing bankers to focus on more complex, value-added interactions with customers.
• Breadth of Products. Panelists pointed out that Mirador's ability to support multiple SBA loans types was key to Patrick's obtaining the capital he needed to launch his small business.

To hear the story first hand, watch the panel for yourself.

Photo provided by Greg Lam Pak Ng