Three Proven Factors in Fintech Success with Community Banks

By Charles E. Potts

Entrepreneurs know a thing or two about an innovation mindset and I’ve always admired how successful ones focus squarely on the big-picture vision for their company. This means the details of how they get there shift and change along the way. With three successful ICBA ThinkTECH programs under our belt, here’s what I’ve witnessed as key factors that lead fintechs to success in the community banking space.

  1. Fintechs serving community banks seek out ways to better understand our unique market. For example, HEXANIKA, an industry data solutions provider, had attended two incubator-style programs and one other accelerator before landing at ICBA’s ThinkTECH Accelerator. While each offered a different angle—from a funding focus to ideation and product development—the journey supported the evolution of the company’s focus and offerings and gave increased line of sight to community banks’ specific needs.

    “When I came for the [ICBA ThinkTECH] program, I realized in talking to community banks that the way to solve the problem is completely different” than for the megabanks,” said Yogesh Pandit, founder and CEO. “The one-pager that HEXANIKA had at the start of the program was, at the end of the program, completely different. That learning was very important for us.”

    The company recently held an educational webinar on the topic of data for fair lending and featured ICBA’s Director of Regulatory Legal Affairs Michael Marshall as a panelist.

  2. Community bank-focused fintechs look to connect—for relationships and feedback. Take Finzly, a provider who offers a modern, real-time banking platform. The company presented at Finovate 2019 in New York, where they engaged with Kevin Tweddle, ICBA’s senior executive vice president community bank solutions, and Tina Giorgio, president and CEO of ICBA Bancard, and learned more about the ThinkTECH Accelerator.

    “The Finovate experience helped us hone our message into a 7-minute live demonstration,” said Brian Anderson, vice president of sales and marketing at Finzly. “After being selected to participate in the second year of the ICBA ThinkTECH Accelerator program, we were excited to benefit from the knowledge and experience of ICBA and The Venture Center. When we realized the magnitude of the opportunity, we jumped on it!”

    That relationship continues to flourish, including in the form of a recently announced partnership with ICBA Bancard to offer instant payments services.

  3. Fintechs serving community banks evolve to meet our industry’s changing needs. Consider Teslar, a participant who established strong ties with ICBA through its participation in our first Accelerator, and used those connections to support community banks during COVID-19.When the pandemic hit the company reacted quickly, developing a platform to manage Paycheck Protection Program (PPP) processing, helping small businesses during a high-stakes period, and earning industry accolades.

“Teslar was initially created as a single solution for tracking and clearing exceptions and has grown to over twenty modules based on ideas and suggestions from our clients,” said Joe Ehrhardt, the company’s CEO.

“The effects of the pandemic have completely changed the demands of bank customers, and therefore, are changing the needs of community banks. Likewise, our plans have evolved to meet those needs.” Specifically, Teslar shared their plan to roll out a new module later this year to digitize commercial and SBA lending, with more to come.

All roads lead to the ICBA ThinkTECH Accelerator for those fintechs looking to serve community banks. So, as we head into the program’s fourth year, we invite you to share your thoughts on specific pain points and product needs, refer a fintech directly to the program, and plan to join us for this year’s program. From our end, we’ll continue to cultivate the companies we think show promise, because in our experience, the right partner is just a collaboration away.

Charles E. Potts is ICBA senior vice president and chief innovation officer.       

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