Some key early decisions along with an embrace of technology have allowed Seattle Bank to deliver extensive value to customers, CEO John Blizzard said.
Mr. Blizzard, who has been at the helm for seven years, said Seattle Bank is focused on three pillars. The first is a boutique bank section serving business, high-net-worth individuals and others with more complex needs through a combination of trained staff and technology.
That increased investment in technology was made possible by a key decision made early in Mr. Blizzard’s tenure, he explained. Seattle Bank closed all of its branches and work out of one location. The resulting savings allowed them to invest in tech and talent.
That investment in technology allowed Seattle Bank to pursue new markets. The latest improvement, the adoption of Google Pay, will have many benefits, Mr. Blizzard said.
“This collaboration will bring the best of Seattle Bank’s customer-first focus and local brand together with the best of Google’s technology and expertise building accessible and engaging consumer products. This effort expands Seattle Bank’s market beyond private and business banking, enabling us to now meet customers where they are – from the business owners with interwoven banking needs requiring customized services and personalized attention to the millennials whose daily lives are centered around their mobile devices.”
The final piece is Seattle Bank’s asset management arm.
The resulting efficiency places Seattle Bank in the national top four per cent in terms of assets per employee, Mr. Blizzard said.
“Privately owned, we don’t have to chase the next quarterly earnings call,” Mr. Blizzard said in citing reasons for the extensive push into technology. “We’re focused on making good long-term decisions.”
Fintech today looks much different than it did seven years ago when Mr. Blizzard signed on at Seattle Bank but he could clearly see which way the wind was blowing and decided to get out in front.
“It was very clear to me at the time that we were going to move to a very digitally-oriented environment,” Mr. Blizzard said.
Apps designed to organize his kids’ soccer schedules were better than early bank offerings, thanks in part to the lack of early embrace by the industry and due to penetrating the legacy technology stack. But with the advent of mobile technology, especially among the young, preferences were shifting.
“Someone once said a bank used to be a place you go to now it’s something you do,” Mr. Blizzard said.
A Peloton machine uses data to provide a better workout, and Tesla uses it to improve your drive. Banks need the same philosophy but there are impediments, Mr. Blizzard conceded. Most rely on someone else to drive their front-end technology and those providers can be reluctant to change. Seattle Bank long ago decided to take back their front end tech and will now look to Google Pay for better results.
“It seems like a pretty good partner who knows how to build user experience,” Mr. Blizzard said. “We realized we didn’t own our tech stack, somebody else did, and they didn’t care about out business.”
A few big providers dominate the market for community banking technology and that leaves the banks with little leverage in negotiations, Mr. Blizzard said. The technology is decades old and there is no innovation.
“It is by far the hardest thing you can do, harder than going public, harder than an acquisition,” Mr. Blizzard said of changing technology. “It impacts every item on your balance sheet.”
Seattle Bank also works with Finastra, a company which has delivered a cloud-based API driving the bank’s core system. It has full functionality and welcomes open banking.
“There is a huge opportunity in the tech space to give people a better experience with money,” Mr. Blizzard said.
It also provides a huge opportunity to serve the underbanked, who look for no monthly fees, minimum balances or overdraft fees. Because of the combination of cost savings and nimble technology, pursuing this population is now feasible.
The underbanked are being mostly pursued by startup fintechs with no track records. Which ones will last? There’s the opportunity for Seattle Bank.
“There’s a lot of hurdles to being successful as a fintech and if we can bring that mindset of innovation and client focus like they bring so well to the table with our other strengths that could be pretty cool,” Mr. Blizzard said.
Contributors
