The revelation Julieann Thurlow had during last year's Super Bowl had nothing to do with football.

While watching the game on television, the president and chief executive of Reading Cooperative Bank saw a commercial for the online lender Social Finance. She decided to try out its loan process for herself right then and, before the game came back on screen, her application was approved. She had an $89,000 personal loan.

"It hit me," she said. "There's nothing they can't take away from us."

Her worry about fintech challengers like SoFi — which considers millennials with student debt its main target and does not factor credit scores heavily into its loan decisions the way banks do — is how good they are at creating a fast and easy user experience. She feels pressure for community banks like hers to keep up, lest the fintech sector continue to expand at their expense from niche to mainstream.

Julieann Thurlow, president and chief executive of Reading Cooperative Bank.
Julieann Thurlow has tried out the fintech competition — from SoFi to Venmo — and she says community bankers in general need to be more alert to the digital transformation taking place. "We need to have our head up and we need to be looking to see what change is out there," she says.

"If they can deliver that quickly and that seamlessly, they are going to take all of the best customers with the best credit scores," Thurlow said. "We are going to be left with the lower credit scores."

The incident prompted her $513 million-asset bank in Reading, Mass., to accelerate its mobile efforts. It is testing some new functions now — like account opening on its mobile app — and Thurlow said she is happy with the results so far. "I did it last night and, in less than two minutes, I actually had a new savings account and a new checking account opened up," she said.

In Thurlow's strategic planning sessions this year, mortgage applications for mobile moved to the top of the priority list. She said she feels strongly that Reading Cooperative needs to make that happen to stay competitive.

"Everything needs to be mobile," she said. "If you can't apply for your mortgage on your mobile phone, then we're dead in the water." (Coincidentally, our 10 Big Ideas for Banking this year includes one that recommends banks embrace digital mortgages as a competitive advantage.)

Thurlow expects to partner with a vendor to roll out that functionality — possibly sometime later this year — and then perhaps add small-business lending to the list of mobile projects next.

As the mother of three college students, Thurlow said she has the benefit of seeing what's hot with that age group early on. "I got to see Venmo three years ago, before we really saw it intersecting with our accounts," she said. "But there are just so many great ideas out there. I think it's an exciting time."

She thinks bankers in general need to adapt to change more quickly, though. She started attending the Finnovate conference several years ago — to see what new ideas fintech companies are coming out with — and she was surprised so few others like her showed up. "There were hardly any community banks there," Thurlow said.

She is happy more turned out this past year, because she considers it an encouraging sign that they are thinking about how to evolve. "We can't wait for the American Bankers Association to endorse the products that we need. We need to have our head up and we need to be looking to see what change is out there."

She is also happy about the general conversation shifting from how the brash fintech startups will disrupt the banking industry with their technology to more of a focus on how they can partner with banks, so that both can benefit.

"I shouldn't say this out loud, but compliance is our friend," Thurlow said. "We have complained about compliance for the last 10 years, but now compliance is our friend, and it's what's keeping the fintech companies in the game with us, instead of competing directly with us."

Thurlow concedes that many customers have yet to embrace the digital age. But she thinks banks can help them along in that transition by offering intuitive options that just make things easier.

"We still have 3,000 customers that actually choose to dial in to an 800 number, press 1 for their checking account, press 2 for the last five checks, and then listen to it," she said.

She wonders, what if they could use a digital personal assistant to do that instead? "Make it a voice prompt activity instead of punching buttons."

Whatever the technology, the point is to keep an open mind and not get bogged down in the way things have always been done. "We're at the intersection of some really great things that are going to make consumers happier about their banking relationship," Thurlow said.

That will be key to keeping the SoFis out there from siphoning off the best customers. After all, outspending them is not an option, she said.

"Who can afford to advertise at the Super Bowl, right?"

Bonnie McGeer

Bonnie McGeer is the executive editor of American Banker Magazine.

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