When asked what motivated Vast Bank to be the first federally chartered bank that allows people to buy, sell and exchange crypto directly from a bank account, Brad Scrivner, the CEO, said it was about putting customers in charge.
At a recent session at the SAPPHIRE NOW 2021 conference, Scrivner explained that he and other company leaders of the 39-year-old, family-owned bank are driven by the drastic changes currently shaping the industry. Customer preferences, new technology, a highly regulated environment, and new, non-bank competitors are all contributing to a world where most heritage financial services will soon be irrelevant.
The customer rules
Scrivner took heed even before Gartner predicted in 2018 that by 2030, 80 percent of established financial services providers will go out of business, become commoditized or exist only formally but not competing effectively. These firms will struggle for relevance as global digital platforms, fintech companies, and other nontraditional players gain greater market share, using technology to change the economics and business models of the industry. Vast Bank will not.
Not interested in being the biggest, but the best, Vast Bank does not want to sell up; it wants to stay relevant. A seasoned financial executive, Scrivner believes it’s all about customer preferences. You’re not competing against other institutions, he says. You’re competing against the customer’s expectations and experiences with non-financial, on-demand services. It’s all about understanding and implementing technology that seeks to improve and automate the use and delivery of financial services. In other words, fintech is shaping the industry.
A little change is not enough – in order to actually thrive and not just survive, radical transformation is needed. This includes a new internal mindset, organizational change, the right technology platform, and throughout it all – laser focus on customer expectations.
In a recent interview with Jason Brett, a former U.S. Regulator with the FDIC and Forbes journalist, Scrivner asserts that a national bank is the best place to buy and sell cryptocurrency.
Through a Gallup poll and various surveys, Scrivner has learned that 60 percent of people are at least interested in crypto. They are what he calls crypto curious; but they’re also saying they want to have a bank involved with the custody of cryptocurrency. When it comes to security, safety, compliance, and regulation, they want the bank to act as the intermediary. It’s human nature; people are intrigued, but prefer to play it safe with their investments.
While other banking institutions have hesitated with cryptocurrencies, Vast Bank has seized the opportunity to apply innovation and technology to remove the complexity and anxiety associated with owning crypto. It is the first nationally chartered U.S. bank that gives people the benefits of crypto combined with the simplicity and security of a bank account. Uniquely positioned due to its familiarity with regulation, the bank is doing the right things to make sure the financial system is kept safe and sound. It just takes the right technology and partnerships.
The core enabler
Cryptocurrency, a form of payment that can be exchanged online for goods and services based on blockchain technology, is going to be very disruptive. The appeal of blockchain, a decentralized technology spread across many computers that manages and records transactions, is the security it provides.
For Vast Bank’s CIO, Stephen Taylor, technology is a core enabler. It must enable the bank to adapt quickly to customer preferences and changing market conditions, especially the high scale automation of processes, while delivering the level of efficiency necessary to provide unique experiences in customer communications.
According to Taylor, implementing such technology is not easy for a relatively small bank. “We chose SAP because it is historically considered one of the largest companies in the world servicing the financial services industry, and because SAP understands what we aim to achieve, making it the best partner for such a massive digital transformation,” said Taylor.
The guiding principle at Vast Bank is to put the customer in control of their experiences. Their underlying SAP technology helps enable easier integration, open banking standards, a 360-degree view of customer, and real-time engagement. At the same time, they provide the same experience cross all channels, a single source of trust, and greater insight into customer preferences with the help of predictive analytics.
Together, these elements will enable Vast Bank to remain relevant despite ever changing customer preferences.
Benefits for banking
Like technology, partnerships play a key role in the success of a digital journey. In addition to its partnership with SAP, Vast Bank also partnered with Coinbase, an industry-leading crypto technology infrastructure provider. This partnership enables Vast to provide market access to seven exchanges, algorithmic order execution, deep liquidity, and crypto wallet management. Vast will operate at global scale with operations in major financial centers, provide competitive pricing, and leverage industry-leading crypto features.
Vast Bank’s bold move makes crypto banking a reality and sets a new standard for simultaneously managing standard bank and crypto accounts side by side in a high tech and secure environment. This is great news for the cryptocurrency community where it has historically been difficult for digital asset companies to even get banking services, much less have a bank that provides digital asset services.
Earlier this year SAP formed a strategic partnership with Dediq, an entrepreneurial investor in information technology and digital businesses, to better serve the rapidly changing banking and insurance industry with an expanded portfolio designed to accelerate digital transformation.
Closing the session, Falk Rieker, global vice president and global IBU head for banking at SAP, summarized the benefits of such partnerships, “Working with SAP and Coinbase, Vast Bank created a seamless user experience by digitizing its operations, creating one source of truth for financial data, and putting customers in more control of their finances. With this breakthrough, Vast Bank is at the forefront of providing cryptocurrency-related services.”
Watch the full session here
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