Banking Growth Insights

A bank CEO just told me his $2B asset bank outperforms a $20B competitor in efficiency ratio. I asked him about M&A and the race to scale that seems to be a central theme for 2025. He laughed. "That's old math." While banks are rushing to merge their way to scale, the rules of banking have fundamentally shifted.  Sure, M&A can spread fixed costs across a bigger balance sheet. But merging two inefficient operations just creates a bigger inefficient operation.  His secret? They stopped trying to be everything to everyone. Instead, they invested heavily in modernizing their tech stack and focused on specific customer segments they could serve profitably. Their loan officers spend 80% of their time with customers instead of paperwork and these conversations are data driven. Everything is captured in their CRM that they’ve finally gotten cultural buy in to leverage so follow ups are automated and there are more data to drive more insights. This isn't about having fancy tools. It's about fundamentally rethinking how banking works. The old playbook: gather deposits, make loans, buy a competitor, repeat. Growth meant more branches, more people, more overhead. The new playbook? Use technology to reduce friction, increase productivity, and create scalable processes that don't require an army of people. M&A isn't dead, but technology is the new scale game. The winners won't be determined by asset size but by operational efficiency. Ironically, focusing on The New Rules makes a bank more attractive in M&A either as a target or an acquirer. Ted R., Managing Director at Stephens, drove this home in a conservation about M&A before the holidays. His point: banks need to build a unique asset such as focus or a scalable growth engine to command a premium.   What old rules and assumptions about scale are holding your bank back?

Banks talk about innovation. But how many actually execute it? For years, I've seen banks struggle to turn innovation into action. They know they need to evolve, but the roadblocks are everywhere: 🚧 Fear of fintech competition: Instead of seeing fintechs as enablers, they see them as threats. 🚧 Overcomplicated pilots: Too many internal hurdles stall momentum before innovation can even take off. 🚧 Lack of clear success metrics: Without defined KPIs, how do you know if your innovation efforts are working? But here is the truth: Innovation isn't just a project - it's a *strategy* Thats why I created the Banking Innovation Roadmap - a simple, tactical framework to help banks move from concept to market leadership. This isn't about adding another buzzword to your strategy - it's about real execution. A strategic approach to innovation includes 👇 ✅ Discovery & Roadmapping: Understanding your bank's goals and aligning innovation to real business outcomes. ✅ Proof of Concept Development: Testing real solutions with fintech partners in a way that's controlled and measurable. ✅ Strategic Partnerships: Banks, fintechs, and organizations like FIS coming together to create new solutions that don't exist today (ahem, FIS + Affirm collab!) ✅ Modernization & Open Banking: Without the right infrastructure, innovation can't scale. ✅ Market Insights & Thought Leadership: Staying ahead of trends and leveraging industry expertise to guide decision-making. The banks that succeed don't wait for innovation to happen - they structure it, measure it, and operationalize it. I'll be diving more into this framework as I continue to iterate it. Most importantly: I WANT TO HEAR FROM YOU! Am I missing anything? What's the biggest roadblock you see when banks try to innovate? Drop your thoughts in the comments! #bankinginnovation #fintech #innovationstrategy

"𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝘁𝘆" 𝗕𝗮𝗻𝗸𝗶𝗻𝗴 𝗜𝘀𝗻'𝘁 𝗗𝗲𝗮𝗱 𝗮𝗻𝗱 𝗜𝘀𝗻'𝘁 𝗗𝘆𝗶𝗻𝗴--𝗜𝗻 𝗙𝗮𝗰𝘁, 𝗜𝘁'𝘀 𝗚𝗿𝗼𝘄𝗶𝗻𝗴 That assertion, however, is based on a redefinition of what "community" means. Historically, community was a geographic construct. Today, it's an affinity, niche, or vertical market construct. A new report from Cornerstone Advisors, 𝙏𝙝𝙚 𝙉𝙚𝙬 𝙂𝙧𝙤𝙬𝙩𝙝 𝙋𝙡𝙖𝙮𝙗𝙤𝙤𝙠: 𝙑𝙚𝙧𝙩𝙞𝙘𝙖𝙡 𝙖𝙣𝙙 𝙉𝙞𝙘𝙝𝙚 𝙎𝙩𝙧𝙖𝙩𝙚𝙜𝙞𝙚𝙨, looks at how community banks and credit unions can capitalize on the new "community" revival. What does a niche strategy deliver? 1️⃣ 𝗚𝗿𝗼𝘄𝘁𝗵. AlumniFi acquired members nationally, turning MSUFCU’s alumni base into a source of low-cost deposits. ZYNLO® Bank attracted Gen Z depositors who otherwise would’ve gone to a neobank. Panacea Financial built a national franchise among young doctors. 2️⃣ 𝗗𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝘁𝗶𝗮𝘁𝗶𝗼𝗻. Vertical brands solve problems general-purpose banks ignore. ROGER Bank lets under-18 recruits open accounts solo—something neither USAA nor Navy Federal offer. HUSTL from Vantage West Credit Union gives bizumers tools to separate personal and business income. 3️⃣ 𝗛𝗶𝗴𝗵𝗲𝗿 𝗺𝗮𝗿𝗴𝗶𝗻𝘀. With low branch costs and high automation, vertical brands operate lean. MSUFCU avoided a $5M branch build by launching a digital-only brand. And because products are tailored, customer engagement and cross-sell rates improve. These aren’t “rate chasers”—they’re sticky, underserved users. 4️⃣ 𝗗𝗶𝘃𝗲𝗿𝘀𝗶𝗳𝗶𝗰𝗮𝘁𝗶𝗼𝗻. Concentration risk is a real concern for FIs tied to local economies. Serving resilient verticals—like medical professionals or military families—can buffer against local slowdowns. The report outlines tactics for launching successful vertical brands: ▶️ 𝗡𝗮𝗶𝗹 𝗣𝗠𝗙. Don’t just market to a niche—build for it. HUSTL wasn’t a rebranded checking account; it included invoicing tools and freelance-specific tax features. Panacea started with loans for young doctors, then built out offerings based on user demand. ▶️ 𝗣𝗮𝗿𝘁𝗻𝗲𝗿𝘀𝗵𝗶𝗽𝘀. MSUFCU and PeoplesBank launched in months—not years—by using sidecar cores and cloud-native partners. ▶️ 𝗦𝘁𝗮𝗿𝘁 𝗹𝗲𝗮𝗻, 𝘁𝗵𝗲𝗻 𝘀𝗰𝗮𝗹𝗲. Soft-launch, learn, iterate. ROGER grew slowly at first to refine its offering. Five months in, it went national and raked in $50M in deposits soon after. ▶️ 𝗞𝗲𝗲𝗽 𝘁𝗵𝗲 𝗯𝗿𝗮𝗻𝗱𝘀 𝘀𝗲𝗽𝗮𝗿𝗮𝘁𝗲. Different customers need different experiences. A vertical brand should have its own design, culture, and staff. Trying to bolt it onto your existing brand will suffocate innovation. ▶️ 𝗗𝗲𝘀𝗶𝗴𝗻 𝗯𝗲𝘆𝗼𝗻𝗱 𝗺𝗼𝗯𝗶𝗹𝗲. A flashy app isn’t enough. Credibility depends on full digital ecosystems—websites, content, service channels, and trust signals specific to the vertical. See the link in the comments to download the report. Jeffery Kendall Michelle Prohaska, Aleda DeMaria Jill Castilla Tyler Stafford, Benjamin Maxim Rob Hoyle Elizabeth Gujral

At Insider., we love the challenge of working alongside leading financial brands shaping the next era of digital banking. As NuBank and SoFi take very different routes in volatile markets, I took a closer look at their latest earnings reports. Nubank is a Latin American powerhouse with 118.6 million customers, nearly 100 million monthly active users, and $3.2B in Q1 revenue (+40% YoY). Its market is underbanked, fast-growing, and ripe for digital disruption. SoFi operates in the U.S., serving 10.9 million members with $772M in Q1 revenue (+20% YoY). The U.S. market is mature, highly regulated, and crowded with both legacy banks and fintechs. 1️⃣ Acquisition Strategy NuBank drives mass-market growth with 4.3M new customers in Q1, relying on viral word-of-mouth and fast, mobile onboarding—ideal for underbanked LATAM markets. SoFi targets quality over quantity, adding 800K members by attracting users through key products, then cross-selling to maximize value. NuBank wins with scale and speed; SoFi with targeted, high-value relationships. 2️⃣ CX Strategy NuBank focuses on simplicity and speed—5-minute account setup, rapid support, and a loyalty program that builds trust and engagement. SoFi emphasizes ecosystem depth and personalization, using a unified app and analytics to cross-sell; 40% of new members adopt a second product within 30 days. NuBank excels at rapid activation, SoFi at deepening multi-product engagement. 3️⃣ AI for Growth & Profitability NuBank uses AI to cut costs and scale—55% of Tier 1 inquiries resolved instantly with AI chatbots, keeping service costs under $1 per customer. SoFi leverages AI for personalized marketing and efficient cross-sell, freeing advisors for complex needs and refining products based on customer data. NuBank’s AI boosts efficiency; SoFi’s AI drives revenue per member. 👉 NuBank and SoFi prove there’s no single path to digital banking success—whether you’re scaling fast in emerging markets through simplicity and efficiency, or deepening engagement in mature markets with personalization and a robust ecosystem. The real edge comes from knowing your market, leveraging AI to drive both efficiency and revenue, and staying agile enough to adapt your strategy as customer needs and opportunities evolve. Which approach will drive your next move? #HowTheySucceed #DigitalBanking #Fintech #GrowthStrategy #CustomerEngagement

Databricks quietly released this case study last week. It’s about how Coastal Community Bank reinvented itself—by starting a new Banking-as-a-Service offering. The results are kind of crazy. Something like 150x customer growth and 4.59x increase in net income since 2018. These results come right from their earnings report and interviews with their Head of Technology. My takeaway—Databricks lets you punch well above your weight. This tiny community bank ($3.75B in total assets) is powering 30+ FinTechs and quietly building a very profitable business. Who are they and what exactly have they built? Coastal Community Bank was your average local bank. Started in 1997 as a traditional brick and mortar bank, it managed to grow to 14 locations across Northern Washington and serve 40,000 customers by 2018. Not bad. But with new customers and revenue growth stalling—the bank knew it needed to try something new to compete against the “Big Banks”. Think about this: The top five “Big Banks” control 56% of all U.S. deposits. If you’re a community bank… How do you compete? Attract talent? Build differentiated solutions? …when JPMC’s technology budget alone ($15 billion) is 4x bigger than your entire bank’s total assets? It’s David vs Goliath. So, Coastal started looking for new revenue opportunities. And, they found it in the last place you’d expect. FinTech startups. They realized that many FinTechs wanted to offer traditional banking services—but couldn’t because they didn’t have a banking license. That’s when Coastal decided to build a Banking-as-a-Service platform so these upstarts could white-label their offerings to their customers. The plan was ambitious given Coastal’s banking platform was outsourced and their IT team was small. They hired Barb MacLean to run this new offensive and bring their technology in-house. Assessing the current data platform, MacLean had more questions than answers… “How do we build a platform that is flexible enough to handle data ingestion across our partners without needing custom code for each integration?” “How do we connect the batch world with the real-time world?” “When a partner system goes down—How do we understand customer and bank exposure as soon as it happens?” “How do we normalize this data? How do we handle unannounced schema changes?” “How do we scale the platform without increasing headcount?” And the list went on… So what did they do? They Did What Every Smart Person Does When Dealing With A Complicated Problem—They Simplified. They looked for a platform that worked holistically vs requiring them to glue all the pieces together. Or as Coastal’s CEO stated, “A platform that lets us punch well above our weight.” Link to full case study in comments. Architecture and hard stats revealed.

You've probably already seen 367 posts about what people saw at Money 20/20. So here's one about what I didn't see - banks taking advantage of a huge lending opportunity. I am talking about banks using their balance sheets to fund non-bank lenders or to develop lending programs that leverage technology-enabled service providers. In other words, banks can offer a viable alternative to private credit, either through providing wholesale lines to fintechs or through direct funding of loans. Lending innovation is being held back by the lack of good funding options. New lenders frequently face interest rates in the mid-teens and an 80-85% advance rate, meaning that the company has to come up with 15-20% of every loan. All while still having to bear 100% of losses up to the point of bankruptcy. No wonder so many fintech lenders want to sell technology, not make loans themselves. Meanwhile, many banks struggle to find good loans to make or to diversify concentrated loan books. [Regulatory nerdery] Many of these banks' capital constraints come from the leverage ratio rather than risk-based capital. In these cases, the bank can start this business with zero initial impact on the capital it needs to hold. [/Regulatory nerdery] There are multiple ways to take advantage of this opportunity. Banks can: ➡️ Provide wholesale lines to non-bank lenders. For partner banks, this can be combined with sponsoring the program to add non-interest income into the mix. ➡️ Take the loans onto their own balance sheet, whether through outright purchase or risk-sharing arrangements. ➡️ Partner with technology providers to build new loan products, whether to embed with distribution partners or to market directly. There are role models that have had success in this area. CCBX a division of Coastal Community Bank, Synchrony, and Customers Bank have all been doing various versions of this for years. More recently, Bankwell looks to be building an interesting business. But the opportunity is huge, especially if you believe in embedded lending. Perhaps I just took the wrong meetings and went to the wrong parties in Vegas. Or perhaps there is a ton of greenfield space just waiting for the right builders to show up.

I am thrilled to announce the launch of the Andersen Institute for Finance and Economics blog! In the first post, Khia Kurtenbach looks at the impact of #tariffs on #SMEs, possible implications for the US economy (#SMEs account for about half of US #employment), and how this could be an opportunity for regional #banks.   A staggering 97% of U.S. importers are #SMEs, accounting for one-third of total imports by value. #SMEs also have outsized exposures: 40% of their #imports are from #China. Importantly, #SMEs often lack the working capital or access to #bank #creditlines that larger businesses can tap into –a tool helpful to smooth through some of the #tariffs impacts (for example, via front running #tariffs with larger inventories or smoothing through price increases). But #tradepolicy changes could also create opportunities – notably, regional lenders and small #banks have a unique opportunity to capitalize on these disruptions and deepen their partnerships with #SMEs. As of 2023, more than two-thirds of #SMEs reported choosing a small or regional financial institution as their banking partner. Here is why they are going to rely on those relationships: -- #SME credit needs are likely to increase as tariffs change #inventory management plans in light of #supplychain disruptions. #SMEs don’t have the capital to run larger and longer #inventory cycles, and they can’t tap into the #bondmarket, so #banks are often the only available option. -- Many #SMEs will also see input costs go up and may need to use #creditlines to pay for #tariffs when due at customs. Passing on these higher input costs to downstream consumers will likely occur with a lag. -- Some #SMEs will also have a greater desire or need for #currency hedging in light of recently increased volatility in #FX markets. https://lnkd.in/esVi69xq

#ArtificialIntelligence in #Banking industry While the buzz around AI and GenAI is widespread, questions persist about realizing AI's value, the impact of reimagining enterprises with AI, and the tangible ROI from AI investments. In the financial services sector, the success of AI-led transformations in banks hinges on balancing immediate financial gains with establishing enduring AI capabilities. By crafting a business strategy with AI at its core and selecting specific domains for AI transformation, banks can drive value by scaling up transformations and leveraging reusable components across various domains. Capturing value from AI transformations requires a fundamental rewiring of how a company operates. This involves 6 critical enterprise capabilities: - A business-led #digital road map - #Talent with the right skills - A fit-for-purpose #operatingmodel - #Technology that’s easy for teams to use - #Data that’s continually enriched and easily accessible across the enterprise - Adoption and scaling of digital solutions While some banks are still experimenting with AI, there are few banks that are successful in AI typically excel in four key areas: 1. Establishing a bold, organization-wide #vision for AI's potential value. 2. Anchoring transformations in #businessvalue by revamping entire domains, processes, and customer journeys rather than focusing solely on narrow use cases. 3. Developing a robust suite of #AI capabilities supported by multi-agent systems. 4. Ensuring sustained value and scalability by implementing critical enablers for AI transformation. Some noteworthy use cases that have been deployed include: - A major bank leveraging AI enterprise-wide to enhance customer and employee experiences, drive efficiency, and increase revenue. - Utilizing AI to provide personalized financial guidance for customers' investments and financial planning. - Using AI to predict potential loan defaults and proactively support clients. - Leveraging GenAI to enhance software developers' productivity by 40% in a regional bank. - Implementing AI in a multiyear transformation to enhance performance and deliver analytics at scale, focusing on hyper-personalization and customer cross-selling. AI has the potential to revolutionize business operations, but successful adoption requires more than mere experimentation. While only a few banks currently derive significant value from AI, more institutions could follow suit in the coming years. McKinsey & Company's article offers a #blueprint to guide financial services leaders in unlocking substantial AI value across their enterprises. p.s. Link to the full article in the comments.

🚀 What's Next in Banking and the AI Revolution 🌐 The intersection of bold growth strategies in banking and the transformative power of AI is shaping an unprecedented future for the industry. Drawing insights from PwC's latest reports, here are some key takeaways: 1️⃣ Banks on the Offense: With declining interest rates, solid loan demand, and an optimistic U.S. economy, 2025 is the year for banks to expand aggressively. But with this opportunity comes the need to carefully allocate capital to areas offering the most attractive risk-adjusted returns . 2️⃣ AI Driving the Next Wave of Competitiveness: The rapid adoption of AI in banking is no longer experimental—it's a strategic imperative. AI is enabling hyper-personalization, redefining operational efficiency, and transforming compliance processes. The leaders will leverage "AI-ready" data and robust governance frameworks to unlock new efficiencies . 3️⃣ Data as the Edge: AI’s potential lies in its ability to turn data into a strategic asset. However, banks face challenges with fragmented and unstructured data, which could limit AI’s transformative impact. Tackling this with scalable and secure data frameworks is essential . 4️⃣ A Resilient Talent Ecosystem: The race for top-tier talent—data engineers, architects, and AI experts—is intensifying. For banks to keep pace, they need not only to hire but also to reskill teams and adapt to blended human-digital workforces . 5️⃣ Sustainability and AI: Beyond profitability, AI is set to be a major player in driving sustainability in the banking sector. From automating ESG reporting to optimizing energy use in operations, this dual focus on growth and responsibility is pivotal . As banking leaders, we stand at a transformative crossroads. Bold strategies, combined with the disciplined application of AI and data, will define the winners of this new era. https://lnkd.in/enYu4ZNp

🌎 Transforming Traditional Banks and Credit Unions: Lessons from Experience and Insights for the Future 🌎 After 21 years with ING Direct and Tangerine across several countries—and working with tech and fintech firms since—I’ve seen how transparency, customer-centricity, and innovation can transform banking. Yet here we are in 2025, and many banks and credit unions still face the same challenges we tackled years ago. 🤔 Customer Satisfaction Is Still Low Capgemini’s 2025 Retail Banking Report shows only 26% of customers are satisfied with their experience. As 💯 Jim Marous put it, banks may not be seeing mass exits, but they’re facing silent attrition—customers quietly moving products to neobanks like Nubank, Revolut, Stripe, Robinhood, Chime, and SoFi. Why is progress so slow? 🤬 Where the Friction Lies 1. Legacy Systems – Outdated tech makes it hard to offer seamless, personalized experiences. 2. Regulations – Compliance slows innovation—but it doesn’t stop it. 3. Cultural Inertia – Resistance to change is deeply embedded. 4. Data Silos – Fragmented systems mean fragmented customer views. 5. Fintech Competition – Agile, digital-native players are redefining expectations. 💪 Let’s be clear—THESE ARE NOT BARRIERS. They’re frictions. Frictions can be solved. Some of us built banks in environments where regulators hadn’t even imagined branchless banking. 🚀 Strategies for Transformation 🚀 1. Culture First – Customer focus must be embedded in the culture. Break silos, reward collaboration. 2. Modern Tech – Move to flexible, cloud-based platforms. Use AI and data to personalize. 3. Agility – Embrace iterative development. Test, learn, improve—fast. 4. Fintech Collabs – Partner with or acquire innovators to accelerate capability. 5. Customer-First Design – Simplify processes. Build trust through transparency. 6. Engaged Teams – Empower employees. Happy teams create loyal customers. Final Thought This isn’t about knowing what to do—it’s about doing it. Change is possible. I’ve seen it. Led it. Delivered it. So can you. If you're a bank, credit union, neobank or fintech ready to make real progress, I’d love to help. Whether in a C-level role or as an advisor, I bring experience that turns strategy into impact. David Bradshaw Andrew Chau Phil Taylor, FICB/FCSI American Banker Aline Badr PCC Brenda Rideout Stacey Schwartz Michael Giller Michael Aceto Gaurav Singh Mark Nicholson