Did I Just Say 'Banking' And 'Innovation' In The Same Sentence?

Apr 22 2014, 6:52pm CDT | by

Bankers take a lot of abuse for not being the most innovative characters, but that doesn’t mean there aren’t innovative bankers. There have been a lot of predictions regarding technology implementation within banks in 2014, which I think are going to happen (or at least they should), but that isn’t the only way innovation takes place within the marbled sanctuaries where Mr. Banks, of Mary Poppins fame, spent his days counting tuppence.

Here are a few small business lending innovations I think bankers should pay attention to:

Alternative Lenders Within the Bank?

Not too long ago I spoke with a former alternative lender who is now doing small business equipment loans out of a traditional bank in California. He runs his national business loan department as a stand-alone business unit, the same way he did before he became part of a traditional bank.

Over the last few years, specialty loan products like equipment loans, among others, have been much easier for small business owners to acquire than traditional, long-term, fixed-interest loans from the bank. What’s more, as online alternative lenders continue to increase their share of the market, I hear of forward-thinking bankers looking at what online lenders are doing and incorporating them into the mix of small business loan products they offer.

Introducing the paradigm shift of treating equipment loans like an alternative lender rather than a traditional banker might be a shock to some in the bank, but a lower cost of capital along with a national footprint is a great combination for many small business owners using this service.

Banker Needs a New Pair of Shoes

Another group of bankers set time aside every week to visit current and potential customers on their turf. Of course this isn’t that unusual, the best community bankers have been doing this for years. What makes these visits different? It’s who makes them—the bank president and the rest of his executive team.

It’s far too easy for all of us to let the day-to-day stuff get in the way of what we would otherwise consider important work. These bank executives schedule a certain amount of time each month to visit small business owners they would like to see become bank customers as well as some of their current customers. They claim it’s amazing what they discover by taking the bank’s executives on the road.

Innovation doesn’t always require a new idea. Sometimes it’s as simple as revisiting old ideas with a fresh perspective and interpretation.

It’s A Lot Like Batman and Robin, or Maybe Hot Fudge and Ice Cream

I like the idea of incorporating the lessons we’ve learned online within the small business loan process. Another bank in California, has partnered with an online service provider to streamline the small business loan process. For SBA (Small Business Administration) guaranteed loans of under $150,000 or less, this banking/technology partnership has reduced the time it takes to get an SBA loan approved to as little as five days. By leveraging an online application, which is substantially less cumbersome than a traditional application, small business owners who might not otherwise be able to get a low-interest SBA loan are finding success because the partnership substantially lowers the cost of servicing these smaller loan amounts.

Aesop may have coined the phrase, “Necessity is the mother of invention,” but this partnership leverages innovation to benefit small business owners all across the country.

Yes, bankers can be innovative and there are many who are thinking outside the box to make their products and services more accessible to their customers. Mobile banking and other technology tools are a big part of that, but that’s not the only place bankers can innovate. Are you an innovative banker? Share with us what you’re doing to put old paradigms out to pasture.

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Islamic State biggest threat to our profession: Scribe panel
Cairo, Aug 21 (IANS/EFE) Following the beheading of US reporter James Foley, the Committee to Protect Journalists (CPJ) has warned that the Islamic State (IS) Sunni extremist organisation operating in Syria and Iraq is one of the biggest threats to journalists.
 
 
Early porn obsession damaging teenagers' brains: Study
London, Aug 21 (IANS) An early exposure to porn and explicit material online can damage teenagers' cognitive abilities, clarity about relationships and studies later in life.
 
 
Indian wines to participate in Vino Ljubljana International Wine Fair
Ljubljana, Aug 21 (IANS) In a bid to introduce and promote Indian produced wines Europe, the country will participate in upcoming Vino Ljubljana International Wine Fair from Sep 4-6 here.
 
 
City spiders getting bigger, multiplying faster
Sydney, Aug 21 (IANS) If you think that the spiders you see in your garden are getting bigger, you are probably right.
 
 
 

Latest from the Network

Former Irish PM Albert Reynolds dead
Dublin, Aug 21 (IANS) Former Irish prime minister Albert Reynolds, who played an important part in the Northern Ireland peace process, died Thursday after a long illness. He was 81 and leaves behind his wife Kathleen...
Read more on Politics Balla
 
Islamic State biggest threat to our profession: Scribe panel
Cairo, Aug 21 (IANS/EFE) Following the beheading of US reporter James Foley, the Committee to Protect Journalists (CPJ) has warned that the Islamic State (IS) Sunni extremist organisation operating in Syria and Iraq is...
Read more on Ad Balla
 
Pakistan SC adjourns PTI's case hearing till Friday
Islamabad, Aug 21 (IANS) Pakistan's Supreme Court Thursday ordered the Pakistan Tehreek-i-Insaf (PTI) to file a concise statement by Friday in relation to the petition filed against the party over its ongoing protests...
Read more on Politics Balla
 
Army, militants fighting for control over Syrian airport
Cairo, Aug 21 (IANS/EFE) Fierce clashes broke out Thursday between the Syrian army and militants of the Islamic State (IS) Sunni extremist group on the outskirts of al-Tabaqa military air base, the only bastion still...
Read more on Politics Balla
 
Pakistan seeks proof after Afghanistan's terror allegations
Islamabad, Aug 21 (IANS) Pakistan Thursday asked neighbouring Afghanistan to share evidence of its involvement in "insurgent attacks, acts of terrorism, and cross-border shelling", officials said. The comments came...
Read more on Politics Balla
 
Saudi Arabia sentences 18 over terror attacks
Riyadh, Aug 21 (IANS) A specialised criminal court in Saudi Arabia has sentenced 18 people to varied prison terms for participating in terrorist attacks within the country, media reported. The men, who were part of a...
Read more on Politics Balla
 
Early porn obsession damaging teenagers' brains: Study
London, Aug 21 (IANS) An early exposure to porn and explicit material online can damage teenagers' cognitive abilities, clarity about relationships and studies later in life. According to a recent study by the...
Read more on Apple Balla
 
Two Indians plead guilty to fraud in US
Washington, Aug 21 (IANS) Two Indian nationals on H-1B visas in the US pleaded guilty to taking healthcare benefits by making false claims. Vipinkumar Patel, 30, and Jigar Patel, 27, in the US state of Maryland...
Read more on Politics Balla
 
US town where teenager was shot is calm
Ferguson (Missouri), Aug 21 (IANS) Ferguson town in the US state of Missouri was calm as Attorney General Eric Holder arrived for talks with authorities after police shot dead a black teenager. The St. Louis's suburb...
Read more on Politics Balla
 
Indian wines to participate in Vino Ljubljana International Wine Fair
Ljubljana, Aug 21 (IANS) In a bid to introduce and promote Indian produced wines Europe, the country will participate in upcoming Vino Ljubljana International Wine Fair from Sep 4-6 here. However, according to...
Read more on Business Balla