I remember hearing about the banking barbell when I first got into banking in the early 90's. The experts were not correct back then so I remain skeptical that the experts will be correct this time. Consumer behaviors are changing and all FIs need to adapt or risk losing out to these growing business models. I learned of the death of distance about that same time and that has become more and more of a reality. Relationships still matter and as long as that remains true then I think there will still plenty of business in the middle. It is interesting that community banks have moved from one end of the barbell to the middle (once the sole domain of regional banks) due to the changing business models.
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John Tyson
CFO/SVP
Altamaha Bank & Trust Company
Vidalia, GA
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Original Message:
Sent: 04-12-2021 11:41
From: Barb Rehm
Subject: Tuesday Topic: The New Banking Barbell
Remember when we used to refer to the banking barbell, consisting of large banks on one end and small on the other with a few mid-sized institutions in the middle? Well there is a new sort of barbell developing, one anchored by companies offering everything to everybody on one end and banks offering specific services to specific slices of customers on the other. This Banking Dive story, "Niche Banking Could Safeguard Challengers, Incumbents From Big Tech, Retail Threat," does a nice job of describing both strategies. PayPal's super app and KeyCorp's decision to create a bank solely serving healthcare professionals illustrate the opposing trends.
I wonder what you think? Do you buy that these are becoming the two dominate business-model choices? Or do you think there is still plenty of business in the middle? Please share your thoughts.
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Barb Rehm
Senior Managing Director
IntraFi Network
Arlington VA
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