A Playbook for Banks

This chapter provides a playbook for how banks can position themselves to succeed in the evolving small business lending market. It uses the example of Eastern Bank's innovation lab to illustrate how a traditional institution can foster internal innovation. The author describes three necessary components for banks to undergo a digital transformation: more flexible core systems, the ability to connect to third-party technology solutions, and improved digital customer interfaces. A key strategic decision for banks is whether to focus on small business customers and how to identify and address their pain points. An additional option for banks is to explore the opportunity of “banking-as-a-service” partnerships, which may allow them monetize their strengths in the changing landscape. This chapter also addresses the difficulties of innovating in a traditional institution and proposes structures through which to overcome these obstacles.