Banking Transformed with Jim Marous

Your institution is spending real money to bring people to the front door, and most of them never get through it.

Cornerstone Advisors found 3.36 digital checking applications abandoned for every one completed, or nearly 9,000 potential accounts at the average institution. Research from Debbie puts average application completion around 15%, with the ID upload as the single biggest drop-off point, and some institutions decline 70% of the applications they receive. Meanwhile the average cost to acquire a member runs around $489.

Most of that gets treated as a KYC and compliance requirement, and most of the time it is not. The customer identification program rule is risk-based. It permits non-documentary verification, allows identity to be verified within a reasonable time after an account is opened, and expects your procedures to define what someone can do while verification is still underway. Most systems only have approved and declined.

Jim Marous looks at what the identity decision is costing banks and credit unions at the new account desk and in digital account opening, why the same gate gets run again on customers who have been with you for years, and what a risk-based verification path looks like in practice. Featuring research from Cornerstone Advisors, FICO and Debbie.

Hosted by Jim Marous. Subscribe to Banking Transformed for new episodes multiple times each week.

Organic Relationship Growth is Easier Than Prospecting and Available Daily

Your cheapest growth engine is the customer whose transaction history you're already holding.

Every month, your customers' accounts send money out to banks, brokerages, mortgage companies, auto lenders and installment lenders. At the customer level, that's a flow of funds analysis: where money enters, where it leaves, and which parts of the relationship are being served somewhere else. It won't tell you everything a customer owns or owes, but it will show you where money is going, how often it moves, and which outside relationships are active.

Deposits and investments held elsewhere leave a trail as outbound transfers, and no credit bureau reports them, so your bank or credit union may be the only one positioned to see them. Loans held elsewhere show up as recurring debits. Every one of those is a form of credit somebody else underwrote for a customer you had already acquired and already paid for.

Acquisition costs are rarely fully loaded, and roughly a third of new accounts leave within the first year. That's what makes this an organic growth argument rather than a reporting exercise, and it's growth you can begin sizing before you spend, because the volume, the frequency and the timing are already visible.

Jim Marous shares his own money movement across two top 5 institutions, neither of which has ever offered him an alternative to what they can see him doing elsewhere. Some institutions have never assembled this view. Others have assembled it and attached no action to it. Different starting points, and the same result for the customer.

Hosted by Jim Marous. Subscribe to Banking Transformed for new episodes multiple times each week.

Lay a new core over a broken process, and the process just runs faster.

Darius Wise told his staff the credit union was not good at what it did. Red Rocks was coming off two years of net losses, a core conversion was underway, a merger had just fallen apart, and the board was turning over.

Darius spent two decades as a pastor before financial services. He joined Red Rocks as Chief Impact Officer, took the interim CEO seat during the worst of it, and returned the credit union to profitability within 11 months.

In this episode, we talk about what that took. Exiting a merger after staff had already been told about it, and the trust that cost. The layoffs. The habit of softening hard news that he had to unlearn in his first month. Why he'd rather be respected than liked. And the thing he wants every institution buying its way out of trouble to hear: new technology on top of bad people and bad process only lets you do bad faster.

We also get into the board he inherited, the reverse mentoring that changed it, why he's building branches while others close them, and why he'd rather choose a merger partner than be chosen by one.

Hosted by Jim Marous. Subscribe to Banking Transformed for new episodes multiple times each week.

Banks and credit unions rate higher than the fintechs on buy now, pay later.

J.D. Power scores bank programs at 704 for customer satisfaction, compared with 603 for fintechs. Almost none of the spending is ours.

The gap is timing.

Our pay later arrives after the purchase, the fintechs own the purchase itself, and the moments a customer needs money the most, the emergency repair or the gap before payday, arrive without a checkout button at all. Meanwhile, Affirm and Klarna have both applied for industrial bank charters.

Jim Marous lays out 3 levels of response based on when your institution shows up, from the card installment plan after the purchase to money already waiting in the mobile app before the customer knows what they will need it for. And he makes the case that the real advantage is not approving faster. It is the cash flow context that lets a primary financial institution structure the right answer, or say no when that is the better answer.

Hosted by Jim Marous. Subscribe to Banking Transformed for new episodes multiple times each week.

Deep institutional experience isn't enough for the job ahead. New thinking alone isn't either. Your next CEO has to bring both.

CEOs in financial services stay in the seat about 9 years, longer than almost any other industry, at the exact moment AI, data, and new competitors are rewriting what the job requires. Yet only 9% of banks have identified a CEO successor with a timeline and a plan of action, down from 17% a year earlier. Most succession plans are built to replace the person already in the seat rather than to prepare for the job that is coming.

In this Banking Insights episode, Jim Marous argues the job now resembles a barbell. One end is credit judgment, relationships known by name, and having run the institution through a cycle where things went badly. The other is fluency in data and AI, command of partnerships, and a temperament that can carry bets, some of which are supposed to fail. The failure falls in the middle, and one person rarely holds both ends, which makes this a team question rather than a hire.

Darius Wise of Red Rocks Credit Union shows what that looks like. He spent 15 years in pastoral leadership and arrived with no banking experience, then rebuilt the senior team around people who knew what he did not. His board runs on reverse mentoring, where the credit union's own employees teach the directors how the institution operates. The episode closes on custodian versus builder, and why that has nothing to do with age.

About: Banking Transformed is hosted by Jim Marous, a top-five banking industry influencer and Co-Publisher of The Financial Brand. Banking Insights episodes deliver the most important strategic ideas in under ten minutes, for the executive who wants the takeaway without the deep dive. Subscribe to the Digital Banking Report at thefinancialbrand.com.