By Charles Potts
Central Payments, the payments arm of the $238 million-asset Central Bank of Kansas City (CBKC) never imagined that a few days into their Falls Fintech accelerator program, they’d have to transition to a fully virtual experience. But due to COVID-19, that’s exactly what happened.
“Having this global pandemic at the beginning of this cohort was seemingly impossible,” said Nikkee Rhody, Falls Fintech co-founder and managing director. “We kicked off on Monday, March 9, and then, we sent them all home on Friday the 13th. Nobody knew that was how the week was going to end, but we’re grateful for the time that we had.”
Constructing the model
But Falls Fintech’s transition to a fully virtual accelerator program isn’t its only mark of distinction. Because of its direct ties to CBKC and its mission as a Community Development Financial Institution, Falls Fintech is keenly interested in serving companies focused on serving the needs of low- to moderate-income consumers.
The program’s benefits structure also offers a personalized take. Beyond the more traditional accelerator advantages of industry education, capital investment, investor access, and banking connections, cohorts each receive access to an open API platform called OpenCP. Leveraging OpenCP, the cohort can ramp up time-to-market by connecting to the payments ecosystem through one integration. And upon meeting qualifying criteria at the program’s conclusion, cohort participants gain CBKC as its bank partner.
“The bank partnership provides the missing link a lot of fintechs need to launch and is often a prerequisite to get meaningful investor funding. Combine that with the education, insight and connections and we have something really significant to offer,” explained Rhody.
Assembling the cohort
And getting solutions to the market is the whole point. For its initial accelerator, the Falls Fintech team selected five fintechs:
- Build Financial, whose core financial products use automation and learning tools to help customers save;
- Permiso, which has developed an app, card, and life literacy curriculum to support youth banking;
- Soon, whose Smart Debit Card automatically invests when a customer makes a deposit, and divests the best performing asset when money is spent;
- Xpenseone, which offers a digital expense management solution; and
- Former ICBA ThinkTECH Accelerator participant, Invest Sou Sou, which offers a smart social banking app.
“Invest Sou Sou was one of our top runners from the very get-go,” noted Rhody. “Where we came to the table to solve a need was that bank partnership at the end. They have a payment product that will be tied to their Sou Sou accounts. We will be the debit card issuer for the group communal lending circle. I think that gave them the final straw they needed.”
Planning for the future
On July 3, Falls Fintech closed enrollment for its second cohort—with more than three times the number of applications of the previous round. And with this next cohort, the team put a little more specificity around the CDFI mission: one of the five open positions will go to a company that “focuses on improving the financial lives of minority consumers and/or has deeply embedded financial literacy into their solution.” The program will again be virtual and will run Aug. 10 to Oct. 30, 2020.
“There’s so much that’s out of our control, and if 2020 has taught us anything, it’s that,” said Rhody. “But amazing things can happen when you’re not afraid to try.”
As the Falls Fintech team gears up for its second accelerator, they remain driven by the work they’re doing to seed the market with viable fintech solutions to support community banks and their customers today and well into the future.
Charles Potts is ICBA Senior Vice President and Chief Innovation Officer.