Eastern Bank will work with the former leadership team of PerkStreet Financial on a new strategic partnership aimed at rolling out new and disruptive financial services technologies: Eastern Labs.
The $8.7 billion Boston-based bank has recruited Dan O’Malley, formerly the CEO of PerkStreet Financial, as executive vice president and chief digital officer in the new initiative. John Magee, PerkStreet’s former vice president of analytics, has been named vice president and chief data scientist. PerkStreet’s former chief financial officer, Laurence Stock, will become senior vice president of emerging technologies.
Robert Rivers, Eastern Bank’s president and chief operating officer, said he didn’t want to just watch disruptive innovators in the financial technology space from the sidelines.
"All of the ways in which we’ve traditionally interacted with our customers are completely changing. There are a lot of companies out there – and PerkStreet was one of them – that are looking to put people like Eastern out of business," he said.
And so late last summer, when Rivers picked up the paper and read about PerkStreet’s impending demise – the company was unable to grow quickly enough or attract enough investor dollars to pay out rewards to its customers – he got on the phone to find out how he might be able to meet O’Malley and his crew.
Rivers said Eastern Bank started working with the former PerkStreet team last fall in a more limited capacity before launching Eastern Labs this week.
"This pursuit is not only a matter of our future relevance, but indeed, our survival. If you look at how customers are choosing to interact with their financial service providers, the data is clear. Branch transactions are dropping at a rate never before seen," he said.
Rivers said the bank wanted to bring in PerkStreet’s expertise because they had operated totally in the digital realm, without any branch network whatsoever.
One of Eastern Labs’ first initiatives will be to continue work on the bank’s online and mobile platform. Eastern Labs will also use some of the data analytics and data science already at the bank’s disposal and look out into the marketplace for third parties to work with.
"Beyond that, we really don’t know. That’s really the joy of it," Rivers said. "There are so many unknowns. It’s about taking risk and being able to not only fail, but celebrate the failures because they’re learning opportunities. That’s a mindset that’s not natural to bankers, and certainly not natural to us quite frankly, but in that we will become better."
