Data is the new oil, though the old oil is still valuable, too

Relationship building
It's hard to compete with the big guys. That's why the big guys compete so hard to get big in the first place. Coca-Cola may be the single most recognizable brand name on the planet. Everybody knows it. The company still spends something like $5 billion a year on marketing and advertising. Why? Because you cannot be big enough, and if you're not getting bigger you're getting smaller. 

Credit unions have a size problem when it comes to competing with the big banks, our Joey Pizzolato notes in his story this morning. The story is about credit cards, but if you ask me the story is really about data, and data is the thing that gives credit unions an advantage, if they can figure out how to leverage it.

United Financial Credit Union in Saginaw, Mich., recently launched its own rewards cards through a credit union service organization. Previously, it used a third-party vendor. The problem with that, United Financial realized, was that it wasn't really providing the service, the vendor was, and it wasn't really getting the benefit of the relationship with its customers that comes with providing a service. And, it wasn't getting the data, either. So now it's brought all that in-house, combined it with its core offerings, and is building the relationships with its customers itself and is getting the data that is so valuable, that it can use to better understand its customers and its products, what works and what doesn't. 

And data – the oil of the modern world – is far too valuable to just give away. Credit unions may lack scale, but they can't cede critical services and functions to others, is the real point of the story. 

The economic war
The Iran war has two fronts. One is conventional. It's the one you see on the evening news, the one that involves bombs and fires and rubble and bodies. The other front is economic. It involves banks and finance and gas and bonds. The U.S. is mainly involved in pressing its advantage on the conventional front. Iran is mainly involved in pressing its advantage, to the extent it has one, on the economic front.

Our Carter Pape writes that Iran is now threatening U.S. banks. The country's military command publicly named U.S. and Israeli banks as military targets. This increases the threat significantly. Previously there had been a general awareness of cyber threats. But now there is an explicit, state-level declaration of intent.

Focusing on banks is being done for the same reason Iran is focusing on the oil industry. They want to create as much financial confusion and pain as possible in the expectation, or hope, that it will dissuade the U.S. and Israel from continuing to drop bombs from 20,000 feet over Tehran. I never worked at the War College, but it seems pretty obvious that Iran's best bet is to wreak havoc in the oil market, and drive up prices, and jack up inflation, and tank asset markets. Banks are a prime target in that line of attack.

Meet Megan Ryan
You're going to start seeing a new voice here at American Banker. Megan Ryan has joined us as our new Market Intelligence analyst and will be covering the payments sector with analysis and commentary. She comes to us from the Federal Reserve Bank of Chicago, where she spent the last five years focused on how technology is affecting money movement and payments, and therefore brings an insider's knowledge of the landscape. You can catch her at our On-Chain Executive Summit next week, on the American Banker podcast, and at other AB events. She has a strong voice and we are going to use it to help you stay on top of all the important trends and developments. Drop her a note once she settles in and say hi.

The future of money
Don't forget: On Monday, watch my conversation with M&T Bank CEO Rene Jones in American Banker's Leaders series to talk about how M&T finds new growth opportunities, how it fends off competition from both other banks and nonbanks, private credit, regulations, and even the changing nature of money itself. You can register here (the fields on the right-hand side) to watch on Monday the 16th at 1:30 p.m. ET.