2021: The Year of Community Bank Innovation—with More to Come

By Charles E. Potts

In the innovation world, 2021 may go down in history as the year of community bank innovation. Despite the ongoing COVID-19 pandemic and associated challenges thrown in our path, community banks continued to meet their customers’ needs by expanding their thinking and not only responding to—but proactively preparing for—the road ahead.

Community bankers: Each of you can identify countless examples of innovation within your banks—from online account opening and loan origination solutions to fraud monitoring, back-office efficiencies and beyond. At the national level, ICBA amplified your efforts by launching new initiatives in support of your innovation journeys. We dialed up the emphasis on innovation, specifically focusing on three areas of opportunity:

1. Expanded access to community bank-centric fintech solutions.

Through our ICBA ThinkTECH Accelerator program, we’ve connected community bankers with more than two dozen vetted fintech solutions, refined based on your feedback through our immersive 12-week bootcamp. The program’s success led to our announced multi-year engagement, and a three-fold increase in participation during our most recent Accelerator; a reflection of the unmatched value of this program and ICBA’s ongoing commitment to push the innovation envelope.

The program continues to evolve—attracting more seasoned companies—and additional opportunities for engagement. As we prepare to launch our fourth Accelerator in January, and ready this year’s announced new cohort to make the most of this unique interactive experience, banks will have an opportunity to share their perspectives in person and virtually.

It’s hard to quantify the value the cohort receives from community bank feedback, but as Jesse Honigberg, senior vice president and technology chief of staff at Cross River Bank, and one of our selection committee members told Independent Banker, “having conversations with the actual decision makers and deciding what will or won’t work … creates a sense of reality for [the cohort’s] business development process, which ultimately makes them better and faster.”

2. Direct investments in innovation.

Throughout 2021, we have been culling our resources in support of community bank innovation. Most recently, we announced the establishment of the BankTech Ventures Investment Fund. Designed to accelerate technology opportunities and adoption at community banks, this fund will provide community bank investors with early access to a vetted network of leading and emerging technology solutions tailored to address community banks’ unique business challenges and opportunities.

In addition, earlier this year, ICBA also became a strategic advisor to JAM FINTOP Banktech, a $150 million investment fund designed to help accelerate technology adoption at community banks. In this capacity, ICBA is collaborating with JAM Special Opportunity Ventures (JSOV) and FINTOP to identify and fast track fintech solutions that solve for community bank pain points.

Our focus on these funds signals the tangible work you’re doing, emphasizing the path to innovation implementation. In short, you’re not thinking about why or how to innovate, you’re doing it, and we’re here to support that.

3. Increased industry outreach.

If a community bank innovates and no one hears about it, does it make a sound? That philosophical tree-in-the-forest conundrum has sparked our increased emphasis on industry outreach and education over the past year.

With speaking engagements—virtual and in-person—at Finovate, Federal Reserve events, state banking conventions, and other leading conferences, we have been working to spread the community bank innovation story throughout the industry. And we’ve emphasized your continued successes through innovation case studies on our revamped BankLocally site. We expect to intensify these efforts as we lean into 2022 to ensure the tales of your innovation triumphs continue to be told far and wide.

Because there’s always room for improvement, and new challenges and opportunities to sort through, we’ve also expanded our innovation insights with topical webinars and podcast programming on emerging technologies such as cryptocurrency and banking-as-a- service—to deliver news you can use as you refine your innovation strategy.

These key developments have demonstrated a dedication to the innovative offerings community banks bring to market, but they just scratch the surface of all that has been planned. As we head into 2022, we remain committed to innovation as a chief priority for ICBA.

They say that history repeats itself, and when it comes to community bank innovation, that’s certain to be true. Because, while 2021 was an unprecedented year of innovation, 2022 is shaping up to be just as interesting as community banks put ideas into action and roll out new business lines to address the demands of today's dynamic marketplace.

As always, ICBA will be along for the ride, building on our innovation initiatives to help you build out the next phase of your innovation roadmap.

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

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