Pub. 15 2018 Issue 3

Issue 3 • 2018 5 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S PRESIDENT’S MESSAGE JOHN S. GULAS NMBA PRESIDENT Los Alamos National Bank Fintech is the term used to describe the emerging financial services sector, and includes a broad range of technological innovations. Fintech companies are firms that leverage technology to create new business models, new delivery channels and automated decisions. Fintech Expansion and What It Means for Others W hat does the advancement of fintechs credit union expan - sion and the emergence of a public banking movement mean for community banks? This question is gaining relevance for bankers across the nation. Fintech At the end of July, the Office of the Comp - troller of the Currency (OCC) announced that it will begin accepting national bank charter applications from financial technology compa - nies. This news has the potential to disrupt the traditional banking landscape. Fintech is the term used to describe the emerging financial services sector, and includes a broad range of technological innovations. Fin - tech companies are firms that leverage technol - ogy to create new business models, new delivery channels and automated decisions. In 2015, EY, a professional services firm (formerly Ernst & Young), created an index to track Fintech adoption. According to EY’s 2017 Fintech Adoption Index, US adoption has doubled since 2015, with adoption among millennials at a rate of 59%, topping the global millennial average of 48%. The index evaluates services offered by Fintech organizations among five categories: money transfers and payment services, financial planning tools, savings and investments, borrowing and insurance. The latest results indicate that US consumers are becoming more comfortable utilizing financial technology. As of yet, there have not been many com - panies lining up to apply for the OCC’s fintech charter. With various state and federal regula - tory bodies involved, and the intent announced by the Conference of State Bank Supervisors to reaffirm its commitment to challenge the OCC’s action, the impact remains to be seen. Credit Unions Credit Unions emerged as financial service providers with a noble cause: to allow people with a common bond to pool their resources. Today, that common bond has morphed into serving just about anyone that breathes the same air. Credit unions are actively expanding their fields of membership and offering addi - tional products and services that compete with traditional banks. Historically, credit unions were focused on meeting the needs of under - served populations, and their products and ser - vices were limited. Times have changed. With aggressive membership enrollment campaigns and an increased market presence, they contin - ue to offer additional products, such as commer - cial loans, to an expanded net of potential and enrolled members. n President’s Message continued on page 6