John “Bernie” Winne, 66, is one of many credit union and community bank CEOs who postponed retirement during the pandemic because they didn’t want to leave in a time of need.

John “Bernie” Winne, 66, is one of many credit union and community bank
CEOs who postponed retirement during the pandemic because they didn’t want to leave in a time of need.

Winne, the president and CEO of Boston Firefighters Credit Union in Dorchester, Massachusetts, now plans to retire next year after spending four decades in the credit union industry. The last 20 of those were at the helm of the $394 million-asset BFCU.

“We had no idea in the late spring and early summer of 2020 how this was going to play out,” Winne said. “Many of us had granted millions of dollars in forbearance requests to help our members weather the storm, and there was credible doubt about the long-term viability of many of those loans.”



“Many CEOs and other occupants of C-suite offices are just tired,” says John “Bernie” Winne, who will retire next year as CEO of Boston Firefighters Credit Union. “I’m a big believer that CEOs and politicians stay on too long,” says John Cassidy, outgoing CEO of Sierra Central Credit Union in California. “Eventually it’s time for a change.”

Many CEOs did not want to leave their boards in the difficult position of trying to hire their replacement during a global pandemic, said Dennis Dollar, a credit union consultant and a former National Credit Union Administration chairman.

Now that some semblance of normalcy has returned and applicants can actually travel for interviews, the pace of retirements has picked up in the last half of 2021 and should be “quite brisk” in 2022 and 2023, Dollar said.

The wave was inevitable given the graying of the American workforce, especially in the management ranks. The intense cost, regulatory and technological pressures on all banks and credit unions only add to the reasons for veteran CEOs to say they’ve had enough, experts said.

Among credit unions, 40% of CEOs have reached retirement age in the past five years, according to the Credit Union Executives Society.

“These are folks that have built the movement and their respective credit unions and now are looking at the next generation of leaders to help the next generation of members,” said Vincent Hui, managing director at Cornerstone Advisors.

COVID accelerated changes in the economy and consumer behavior that demand adaptations in financial services, and those moves may best be handled by new leaders. For example, going digital is a long-term effort, so it may be a good time to transfer leadership to the next generation to take it forward, Hui said.

Yet the transition process could be bumpy.

Like all areas of hiring today, executive recruitment is being hurt by supply and demand, so executives are going to be harder to find, harder to retain and harder to replace, Dollar said.

“The result will be higher salaries and, particularly, more robust benefit plans … that are lucrative but have golden-handcuff provisions in an attempt to hold and retain quality executive talent,” Dollar said.

Hui warned, too, that succession planning is inconsistent as some boards are proactive while some scramble once CEOs let them know they are retiring.

“Oftentimes, the other execs on the management team are of the same generation as the CEO, so there are issues across multiple roles. However, this does open opportunities for the next generation of credit union leaders,” he said.

John Cassidy announced in November that he will retire as CEO of Sierra Central Credit Union in Yuba City, California, effective Jan. 15. The $1.4 billion-asset credit union said that its president, Ron Sweeney, will become the next CEO.

Cassidy, 61, has been the credit union’s chief executive since 2000 after spending 15 years at Great Western Bank in Sioux Fall, South Dakota. He said that he, like many of his peers, had accomplished all he could in the credit union sector.

Also, Sierra Central had a CEO-in-waiting who has been there for a while and can maintain the organization’s trajectory.

“He and I have been in sync for 22 years,” Cassidy said of Sweeney, 58. “Although we look at things differently, we end up a lot of times coming out with the same thoughts.”

Cassidy said it is hard to bring in a CEO from another organization and keep things on track.

“I’m a big believer that CEOs and politicians stay on too long,” he said. “Eventually it’s time for a change.”

Small-bank leaders face the additional challenge of having to eke out earnings growth quarter to quarter.

The winding down of the Paycheck Protection Program, which gave fee income a temporary jolt, will only add to that strain, said Michael Jamesson, a principal at the community bank consulting firm Jamesson Associates.

“You can’t discount the fact that CEOs may want to leave at the top rather than stick around for a few tough years of earnings comparisons,” he said.

Mike Pollock, president and CEO of the $448 million-asset Fulton Savings Bank in Fulton, New York, said many community bank CEOs are under pressure to produce earnings, and with spreads tightening and fee income disappearing that will only get worse.

“It sure looks like it could be more difficult going forward,” he said. “I’m sure some people are wondering if they can navigate through this. Our earnings will be very good this year, but going into next year and beyond it’s going to be difficult to say how that’s all going to work out.”

Pollock, 67, is retiring Dec. 31. He went longer than he planned because of the pandemic and Fulton wants to find a new leader who will ensure the bank remains independent. It has not yet named Pollock’s successor.

Bruce Kershner, president of Kershner & Co., an executive search firm focused on financial institutions, said the pandemic has created new expectations among candidates for executive posts. People have gotten used to and enjoy working from home, he said, but community banks want their executive team to live in and around the communities they serve.

“As you can imagine, this is becoming a dilemma, especially for institutions located in more rural or out-of-the-way locations,” Kershner said. “Most of my clients have not yet embraced the idea of having their CFO or CIO working from home, which I believe is the way of the future.”

That said, many executives who have stayed past retirement don’t want to wait any longer.

The strong performance of the stock market since April of 2020 and its positive impact on retirement plans such as 401(k)s and 457s made retirement more inviting, Winne said.

“This cannot be ignored as the wealth effect from stock and real estate holdings has significantly increased the personal balance sheets of many executives,” he said.

Winne said it has been a long two years, and many CEOs re-engineered their business models from largely in-person to significantly remote and are now wrestling with a work-from-home culture and how to make that succeed on a more permanent basis.

Even with the best plans and the best interests of employees in mind, the current workplace is increasingly difficult, and competition for talent is fierce, he said.

“Many CEOs and other occupants of C-suite offices are just tired,” Winne said.

NCUA Tells FICUs Crypto Trading is OK — If Big Exchanges Provide the Service

When it comes to reading between the lines of financial regulators’ advisory letters, tone matters.

Take last week’s letter from the National Credit Union Administration (NCUA) which gave the federally insured credit unions (FICUs) it oversees permission to partner with digital asset providers to allow retail customers to buy, sell and trade in cryptocurrencies.

Now compare it to the one issued by Comptroller of the Currency Michael Hsu’s agency to the national banks and federal savings associations it regulates a month earlier.

On the surface, both said much the same thing: Financial institutions can provide cryptocurrency services (albeit with some notable differences: the OCC’s letter dealt with more back-end services, including custody services as well as holding and using dollar-pegged stablecoins for transaction settlement).

Neither was enthusiastic.

The NCUA’s letter said it “does not prohibit FICUs from establishing these relationships” — which is not as enthusiastic as “are allowed,” you’ll note — and added that it these relationship would be evaluated by the NCUA on a case-by-case basis “in the same manner as all other third-party relationships.” It went on to list factors including “exercising sound judgment and conducting the necessary due diligence, risk assessment, and planning” as well ongoing risk measurement and monitoring.

Due Diligence

The NCUA noted that its letter was in response to comments received during an ongoing “request for information” process “about the current and potential impact on FICUs, related entities, and the NCUA of activities connected to digital assets and related technologies.”

It also linked to a half dozen other guidance letters issued by the NCUA and other agencies, and said that it “recognizes that issues involving digital assets and DLT are rapidly evolving and will look to provide further clarifications and guidance, as appropriate.”

The letter went on to say that “FCUs are not limited in the types of products and services they may introduce to their members through third parties,” adding another caveat about sound judgement and due diligence.

Danger Ahead

At first glance, the OCC’s letter sounded ever-so-slightly more positive, saying the activities in question were “legally permissible.”

However, the whole sentence read that the OCC letter “clarifies that the activities addressed in those interpretive letters are legally permissible for a bank to engage in, provided the bank can demonstrate, to the satisfaction of its supervisory office, that it has controls in place to conduct the activity in a safe and sound manner.”

That emphasized “provided” speaks volumes. And the backstory is that Hsu’s predecessor proactively announced that those services were allowed — something Hsu put on hold for a review.

Then there was the accompanying press release, warning banks “not engage in the activity until it receives a non-objection from its supervisory office.”

Overall, the OCC made it clear it was not eager to see institutions dabbling in digital assets.

A Very Big Hint

Digging down, the NCUA letter has one clause that could well discourage all but the biggest crypto service providers from teaming up with federally insured credit unions — and it revolves around that “insured” part.

Noting that the federal government would not insure crypto holdings, the NCUA told FICUs that their contracts with third-party digital asset service providers “should require contracts with third parties to include provisions to indemnify the FICU for any monetary damages arising from the provision of digital asset services, including fraud.”

Those last two words are mighty big ones.

The Securities and Exchange Commission (SEC) has said loudly and for years that it believes the bitcoin trading market is rife with fraud and market manipulation.

And the cost of fraud is very high in crypto. In a recent preview of its 2022 Crypto Crime Report, blockchain intelligence firm Chainalysis said fraud and theft was responsible for $7.7 billion in losses this year.

Which suggests only large firms like Coinbase, Kraken, and FTX.US that have big insurance policies or big self-insurance reserves will make their way into NCUA-regulated FICUs.

Which is likely what the agency wants.

 PYMNTS.com

Michael Moebs - “A overdraft perfect storm” has swept over the U.S.

By Ray Birch CUToday

Michael Moebs

LAKE FOREST, Ill.—For the first time in 23 years, overdraft limits are finally moving higher, according to a new study that shows credit unions are leading the way with the increases—including one CU with a $10,000 OD ceiling.

The decision to raise limits is critical, according to Michael Moebs, economist and CEO at Moebs $ervices, who noted the adjustments are taking place at the same time the marketplace has really started to evolve and several government agencies have announced they intend to bring new scrutiny to overdrafts and NSF fees.




Moebs emphasized the moves are a “total change” in overdraft thinking and policy

“The average American household pays a bit over $1,500 a month for housing and transportation according to cost-of-living index stats. OD limits need to match these monthly costs,” he said, adding the increases will help many Americans “get past COVID.”

Moebs explained overdraft limits have been stagnant at $500 since 1998, but the latest Moebs $ervices survey of 3,309 depositories shows an OD restructuring is taking place, with limits for CUs increasing to $700, banks to $600, thrifts remaining at $500 and Walmart at $200.

Moebs pointed out that overdraft limits are not a line of credit, a transfer from a deposit account, or a loan; they are the amount a financial institution is willing to allow the transaction account balance at the end of the day to go negative.

“The consumer will make errors with their mortgage and vehicle payments, which every month range to $2,000 or more subject to the market,” said Moebs. “Larger limits allow the errors to be paid. This is a total change in overdraft thinking and policy.”

CUs Lead the Way

Moebs said credit unions are leading the way with an average 40% increase to a $700 median limit.

“Banks increased 20% to a $600 median limit, while thrifts let speed bumps keep their limits at $500,” explained Moebs. “Fintechs dramatically lowered their limits, as Walmart introduced a $200 limit, while simultaneously reducing its OD price from $25 to $15 per transaction.”

Moebs explained that data show FIs that track fee behavior, adapt to market changes, and change their OD price at least annually are more successful.

“Our research shows credit unions in 2021 are leading the way and winning the T-account business while enjoying higher fee revenue,” said Moebs. “Credit unions lead in increasing limits, having prices below $20, or lowering the price below $20 during COVID. Consumers facing hardship were actually aided when COVID hit—as more FIs lowered their fee to below $20 and increased overdraft limits. In return, the consumers rewarded these FIs with increased usage or moved their checking business to these institutions. Our data show that a credit union has the highest OD limit in the nation at $10,000, and an overdraft price in the teens, and they are doing very well with this pricing.”


Michael Moebs

‘Perfect Storm’

In addition, Moebs asserted an “overdraft perfect storm” has swept over the U.S., noting that five factors have produced the storm:

• “The Federal Reserve made a major monetary structural change adding savings and MMDA accounts to T-accounts in M1, eliminating withdrawal limits, and stopping reserves. This is forcing FIs to shift transaction approaches,” explained Moebs.
  
  
• Over 70% of consumer stimulus funds have not been spent. Larger OD limits retain consumer transaction business.
  
  
• Checks are dead and currency is dying. “Debit cards are king. Interchange is growing. ODs and debit cards are linked,” said Moebs.
  
  
• Congressional focus is on overdrafts. “ODs are the unvaccinated financial service for the White House and Congress,” said Moebs.
  
  
• “The biggest factor is Walmart’s move into transaction accounts with a $15 OD and a $200 limit. As Ford challenged Ferrari and won, it is Walmart vs. banking, and with stores open 24/7 – 6 a.m. to midnight—who will win this race?” said Moebs.

The Team to Beat

“Walmart is the team to beat in this endurance race,” said Moebs. “Walmart will more than likely have more T-accounts than any depository or fintech by the end of this decade. Therefore, financial institutions should concentrate on Walmart’s major weakness—low limits. Vary limits by risk with a base limit to cover the consumer's core monthly expenses. Establish high error usage not penalty limits. Link debit card volume to fee waivers. Equally important is to establish limits analytically, not discretionary. Since overdrafts are credit but not a loan, the analytical engine will win the limit race.”

NCUA Urged by NAFCU to Take Action So CUs Aren’t Left Behind on Digital Assets

WASHINGTON—NCUA is being urged to take action to ensure credit unions are not left behind as federal financial regulators move toward foundational federal digital asset regulation and legislation.

Dan Berger

In a letter to the agency, NAFCU President and CEO Dan Berger called on the NCUA to promptly respond to comments submitted in response to their request for information (RFI) on digital assets and proactively engage the President’s Working Group on Financial Markets (PWG) and other federal financial regulators on digital asset issues.

Though the association appreciates the agency's efforts to solicit feedback through the RFI, Berger said NCUA has been largely silent on important digital asset issues.

Specifically, Berger stated the NCUA has not provided any guidance similar to Interpretive Letter 1170 issued by the Office of the Comptroller of the Currency (OCC) that stated national banks may provide customers cryptocurrency custody services.

In later Interpretive Letters, the OCC concluded that national banks may hold stablecoin issuers’ cash reserves and that banks may use independent node verification networks and stablecoins to perform bank-permissible activities, NAFCU noted.

‘Prompt’ Letter Recommended

"As explained more fully in NAFCU’s official comment to the NCUA’s Digital Assets RFI, NAFCU urges the NCUA to promptly issue Letters to Credit Unions that confirm a credit union may host digital wallets for members and that a credit union may facilitate members’ buying, holding, selling, transferring, and exchanging of digital assets through a third-party broker-dealer," wrote Berger. "NAFCU also urges the NCUA to promptly issue a Letter to Credit Unions confirming that credit unions may hold stablecoin issuers’ cash reserves."

Berger said NCUA must promptly collaborate with federal financial regulators to ensure credit unions are able to meet the increasing digital asset demands of consumers.

"I urge you to act quickly, both within the NCUA and in coordination with the PWG and other federal financial regulators, to help ensure credit unions may compete on a level digital assets playing field and are not excluded from foundational federal digital assets regulation and legislation," concluded Berger.

NAFCU Letter

 

NCUA Letter - Relationships with Third Parties that Provide Services Related to Digital Assets

Dear Boards of Directors and Chief Executive Officers:

The purpose of this letter is to provide clarity about the already existing authority of federally insured credit unions (FICUs) to establish relationships with third-party providers that offer digital asset services to the FICUs’ members, provided certain conditions are met. This includes third-party provided services to allow FICU members to buy, sell, and hold uninsured digital assets with the third-party provider outside of the FICU. Digital assets are one of many terms used to describe distributed ledger technology (DLT) based tokens.1 

As insurer, the NCUA does not prohibit FICUs from establishing these relationships. The authority for federal credit unions (FCUs) to establish these relationships is described in section II of this letter. The authority for federally insured, state-chartered credit unions (FISCUs) to establish these relationships will depend upon the laws and regulations of their states.

A FICU’s relationship with third parties offering these services and related technologies will be evaluated by the NCUA in the same manner as all other third-party relationships. This includes a FICU exercising sound judgment and conducting the necessary due diligence, risk assessment, and planning when choosing to introduce or bring together an outside vendor with its members. FICUs should establish effective risk measurement, monitoring, and control practices for such third-party arrangements.

Continue reading NCUA full letter:

Lending to Continue to Expand in 2022; Here’s What to Expect by Category, According to TransUnion Forecast

CHICAGO–Continued expansion of lending, including to non-prime consumers, is expected to occur in 2022 with origination levels reaching or surpassing pre-pandemic levels, according to the newly released TransUnion Financial Services 2022 Consumer Credit Forecast.

“For auto loans and personal loans, consumers who are generally higher risk are accounting for a growing share of origination volume, with the forecast providing insights that explain why such broader lending will benefit the overall consumer credit market,” TransUnion stated.

TransUnion is reporting its forecast found that the auto, credit card and personal loan markets are expected to continue expanding into the non-prime segment of the market (comprised of the subprime and near prime risk tiers) as financial institutions recalibrate their growth strategies.

This expansion is happening as serious delinquency rates remain well below pre-pandemic levels, TransUnion added.

“During the height of the pandemic, many lenders pulled back and tightened underwriting to hedge risk in a period of great uncertainty,” Charlie Wise, head of global research and consulting at TransUnion, said in a statement released as part of the analysis. “Consumer performance, however, has continued to stay strong, which has restored lender confidence. The economy is normalizing and continues to expand, and those signs of renewed strength are encouraging lenders to not just focus on the least risky consumers, but to provide greater access to those persons that may be viewed as higher credit risks.”

The Effects from the Changes

According to TransUnion, changes in non-prime  Continue Reading

 

The Death of Overdraft Fees?

Having a top ten U.S. bank pull the plug may not be a mortal blow for the controversial fees. Experts contend that even with the fees, the service adds value for consumers who need it. But business as usual is over for overdrafts. Washington is seizing the opportunity to take action. With the announcement by Capital One that it will be eliminating overdraft and non-sufficient funds penalties, the future of these much-maligned fees in the banking industry has reached a critical juncture.

The $425 billion-asset Capital One becomes the largest bank to eliminate the fees, and follows smaller institutions, such as digital-only Ally and Alliant Credit Union, as well as most fintech neobanks, in making such a move.

Beyond outright elimination of fees, a growing number of institutions have introduced programs to reduce the cost of overdraft/NSF fees. PNC’s Low Cash Mode, Bank of America’s Balance Assist, along with programs from Huntington Bank, Chase, Regions and others have all been efforts to change the nature of overdrafts.

The debate about overdraft fees — which raked in more than $30 billion for financial institutions in 2020 — has been intensifying for years, with many saying they disproportionately harm the financially disadvantaged and lower income consumers. They also generally draw the ire of consumers. As previously reported by The Financial Brand, a survey by Morning Consult found that 52% of adults believe overdraft fees are an unfair penalty on underprivileged consumers.
 

Capital One’s Overdraft Changes
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Mortgage Rates to Rise With More Hawkish Fed

But the MBA forecast still holds, as it expects 30-year rates to hit 4% by the end of 2022.

A Mortgage Bankers Association economist said Wednesday that the Fed’s decision to act more aggressively to curb inflation will send long-term rates up, but the increase is already baked into its forecast for mortgage rates over the next 12 months.

MBA Chief Economist Mike Fratantoni said the Fed’s purchases of longer-term Treasuries and mortgage-backed securities have kept mortgage rates lower than they otherwise would have been. However, even with the Fed’s new stance, he said he expects the MBA’s last forecast is still on target, with 30-year rates rising to 4% by the end of 2022. But he also said rates “may be more volatile as the Fed backs away from the market.”

“Although this will lead to a drop in refinances, we expect that the strong economy will support an increase in home sales in 2022,” he said.  

The MBA’s Nov. 22 forecast showed refinances falling 63% from $2.32 trillion this year to $860 billion in 2022. It said it expects purchase originations to rise 7% from $1.61 trillion this year to $1.73 trillion in 2022.

Fratantoni said more than half of the members of Federal Open Market Committee expect three rate hikes in 2022 as their outlook for economic growth has improved, while their forecast for inflation has worsened.

“Inflation is running well above target, and the job market is booming,” he said. “That is why it was no surprise that the Federal Reserve moved to accelerate their taper of Treasury and MBS purchases, and signaled that the first rate hike will be coming sooner rather than later.”

In March, the MBA had forecast 30-year rates would hit 3.6% by the end of this year and 4.5% by the end of 2022. It has eased its forecast for increases over the year, last setting its expectation in its Oct. 17 forecast that it would rise to 3.1% by the end of this year and 4% by the end of 2022. Those forecasts remained in its Nov. 22 forecast.

Fed Chair Jerome Powell said inflation is running well above the Fed’s long-term goal of 2% and will likely continue to do so well into next year. Most members of the committee expect inflation to fall from 5.3% this year to 2.6% next year — “this trajectory is notably higher that projected in September.”

“While the drivers of higher inflation have been predominantly connected to the dislocations caused by the pandemic, price increases have now spread to a broader range of goods and services. Wages have also risen briskly, but thus far, wage growth has not been a major contributor to the elevated levels of inflation,” Powell said.

Jim DuPlessis CUTimes

Federal Reserve - On your mark get set go!

The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.

With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved in recent months but continue to be affected by COVID-19. Job gains have been solid in recent months, and the unemployment rate has declined substantially. Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.

The path of the economy continues to depend on the course of the virus. Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation. Risks to the economic outlook remain, including from new variants of the virus.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent. With inflation having exceeded 2 percent for some time, the Committee expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment. In light of inflation developments and the further improvement in the labor market, the Committee decided to reduce the monthly pace of its net asset purchases by $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities. Beginning in January, the Committee will increase its holdings of Treasury securities by at least $40 billion per month and of agency mortgage‑backed securities by at least $20 billion per month. The Committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook. The Federal Reserve's ongoing purchases and holdings of securities will continue to foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller.

Implementation Note issued December 15, 2021

Can Small CUs Survive the 4rth Industrial Revolution?

By Homer Fager

The Third Industrial Revolution period of the 1950s through 1990s witnessed the beginning of the decline of the small credit unions. In the 1960s the number of credit unions, including state and federal institutions, exceeded 20,000. The 1980s brought new technology to the industry from personal computers to the introduction of the first credit union-sponsored ATM. During the next three decades 10,000 credit unions were lost and in the last decade alone 2,000 have vanished.

Continuation of this rate of decline means the “small entity” credit unions may be lost within the next 15 to 20 years.

These Third Industrial Revolution banking structural changes were the beginning of the decline of the “small entity”credit union.

The Fourth Industrial Revolution, also referred to as 4IR or Industry 4.0, has changed the 21st century and will continue to change our society as did none of the other three revolutions. More has been accomplished in the last 250-plus years of human history than during the previous 2,500 years.

According to The World Economic Forum the first three periods included mechanical equipment, electricity/mass production, and electronics/automated production, respectively. The fourth revolution is assumed to have began after the 1990s but before 2013, the year Klaus Schwad first published his book, “The Fourth Industrial Revolution.”

Now, 5G (fifth generation technology of broadband cellular networks) and COVID-19 have advanced the application of the Fourth Industrial Revolution, with “cyber-physical systems” blurring the lines between the physical, digital, and biological worlds of influence. Per Klaus Schwab, “87% of young people in the U.S. say their smart phone never leaves their side and 44% use their camera function daily.”

He further noted how “now the world requires companies to respond in real time wherever they are or their customers or clients.”

The Millennial generation, also known as the “now gen” desires to conduct retail activities in real time, from their purchasing of goods to their retail banking P2P relations. The traditional banking industry faces serious threats from emerging digital modes to accessing banking services to being irrelevant at every stage of 4IR massive technology disruptions.

What Must Be Understood

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