“Innovation is taking two things that already exist and putting them together in a new way,” or so says Tom Freston, one of the visionaries responsible for the launch of MTV in 1981.
Through that lens, community bank innovation has been soaring these past few months of the COVID-19 crisis. Over the course of the rollout of the Paycheck Protection Program (PPP), community bankers have debuted new digital offerings that greatly enhanced their relationship-based service strengths while allowing for increased remote engagement. From launching electronic applications, implementing lending platform interfaces to speeding up signature collection, community banks have been able to combine some existing processes with new digital solutions to enable more robust remote loan processing.
In many cases, this was a natural evolution that was already in the works, but the COVID-19 crisis accelerated its importance. Community banks had to beef up what they had in place and get creative to adequately address how to serve their customers amid a shutdown. And as the pandemic’s reach expanded, so too did the need to highlight the utility and usage of their digital offerings.
In other cases, community banks were able to engage fintech partners to support their activities. These efforts were aided by three key factors. First, exposure to promising fintechs primed to create community bank-oriented solutions via the ICBA ThinkTECH Accelerator program. Second, the ability of fintechs to pivot to address community bank needs surrounding PPP loans. And finally, ICBA’s mission as a facilitator in helping connect banks to partners primed to address their specific needs.
I personally witnessed this innovation happen as our ThinkTECH Accelerator fintech cohorts—both current and alumni—collectively rolled up their sleeves and marshalled their support. For example, Botdoc, from our first Accelerator program, offered a solution allowing businesses and banks to get documentation signed and delivered in a timely manner via their secure transport technology. It was a lifesaver for speed to market, dramatically improving efficiency and effectiveness of the document collection process. Or Lendsmart, a cohort from our second year Accelerator program. The company’s solution provides an end-to-end solution for loan processing—from application submission to back-end processing with the SBA system. These are just two examples of community bank/fintech ingenuity.
It has been exciting to see how banks and fintechs have rallied on behalf of America’s small businesses. And it is important that we don’t lose sight of the lessons learned. The processes implemented to support this national effort can now be applied to future business strategies. When the dust settles, banks and fintechs can go back and take inventory and apply the lessons going forward.
While the PPP has created challenges for everyone involved, it has also shined a spotlight on how community bankers and fintechs can work together for the benefit of all. The two are tightly coupled and offer aligned views of the world, supporting one another in profound ways to help small businesses flourish. Because, after all, they are small businesses themselves.
In these community bank/fintech partnerships, we stand witness to true innovation: one that supports America’s economic engines—small businesses—and helps community banks continuing to meet the needs of their employees, customers and communities.
Charles Potts is ICBAs senior vice president and chief innovation officer.