When Suresh Ramamurthi bought CBW Bank in 2009, right after the financial crisis hit, he made sure to keep in his possession a unique artifact to display in the bank’s lobby.
That artifact just happened to be a knife sharpener farmers used when they visited the Weir, Kansas-based institution. The sharpener dates back to the early 1900s when the bank first opened its doors.
The artifact serves as a reminder of CBW’s past and helps remind Ramamurthi where the bank is today, which has become an innovation playground of sorts in the banking industry.
To make that happen, Ramamurthi created when he calls a banking marketplace that enables other companies, such as fintech firms, to fill in the gaps via APIs in CBW’s offerings, particularly on the lending side where compliance can be complicated for a single-branch bank.
Ramamurthi shared CBW’s story Wednesday in Chicago during a keynote address at Networld Media Group’s Bank Customer Experience Summit. Networld publishes Mobile Payments Today.
After purchasing the bank, Ramamurthi eventually created a technology platform that sits on top of CBW’s ancient internal infrastructure to help monitor demand deposit account transactions.
The new technology was necessary because the bank relied on infrastructure some 30 years old at that point, an issue Ramamurthi honed in on during his keynote.
Ramamurthi realized such a change was necessary if the bank was to transition into the digital realm.
“If you want to go into digital banking, [consumers] expect everything to happen at the speed of Google,” he said. “The generation born after Google [was created] expects everything to happen right away.”
As part of the technology upgrade, CBW partnered with burgeoning fintech companies.
Mobile-only banks such as Moven and Simple were initial partners. BBVA eventually acquired Simple, but to this day, CBW still issues Moven’s debit card.
Ramamurthi created this marketplace approach to help the bank reach what he believes are “fundamental goals in society” that every financial institution should help to address.In fact, Moven acts as CBW’s default mobile app because, believe it or not, the bank has yet to launch its own. Ramamurthi said the institution is testing one.
Those four goals are to help customers with any liquidity gaps via loans; hold customers’ deposits so that they are safe; influence the monetary of the central bank; and compliance, particularly when it comes to adhering to rules put forward by government bodies such as FinCEN and the Consumer Financial Protection Agency.
Ramamurthi has parlayed a couple of those goals into long-term revenue plays for CBW.
He reminded the audience the ancillary services a bank offers stem from that initial demand deposit account. And since such transactions are monitored for compliance purposes, the bank is able to extract data to better help with customers’ needs.
“Banking is inherently a long play,” Ramamurthi said.
And he believes it’s also about to change.
Ramamurthi predicts that while the process of a consumer opening a bank account won’t change, how that account benefits a customer will eventually transform into something greater.
“What we’ll see next is [the customer] having a smart account, what [we can view as an] AI-enabled account,” he said.
Ramamurthi pointed to PayTM in India as an example. The company surged to prominence a couple of years ago thanks to the country’s demonetization policies.
Ramamurthi also mentioned banks will need to support new business models, such as funding IoT initiatives.