The third quarter of 2021 yielded the second-highest quarter on record for fintech financing, up 147% over the previous year. Despite this growth, a recent analysis by EY research of 45 banks working with fintechs revealed only one-quarter had deep engagement due to “barriers to collaboration.”
That’s why programs like ICBA’s ThinkTECH Accelerator, which offer a strong pathway to successful partnerships, are so important. Not only do we bring community banks together with promising fintechs, but ICBA invites core providers to participate as well. This not only helps shape solutions offered, but gives due consideration to existing community bank infrastructure, helping create more seamless integrations.
I recently talked with four of the largest core providers—Jack Henry, CSI, FIS and Finastra—to get their take on how the ICBA ThinkTECH Accelerator supports their efforts on behalf of their customers, along with how successful community bank/fintech partnerships can flourish.
Chris Barry, innovation product manager, FIS: Every year we attend and review the selected companies, which helps us innovate and look for opportunities to engage with ICBA and with our shared community bank clients.
Shane Ferrell, vice president, product strategy, Computer Services, Inc. (CSI): I attend ICBA’s ThinkTECH Accelerator primarily because I’m interested in interacting with companies that are solving market problems for community banks.
Chris Montesanti, account executive, strategic alliances, ProfitStars, Jack Henry: As part of my role in Strategic Alliances at Jack Henry, I help the various product teams find and research fintechs that may be a good fit for a Jack Henry partnership.
Philip Taliaferro, global head of partner and fintech ecosystem, Finastra: Finastra has an open ecosystem through which we invite fintechs to integrate with Finastra core products, then redistribute their products to our end clients. We are constantly on the lookout for new and innovative fintech partners.
Barry (FIS): The accelerator program is a great way to learn how these innovative startup companies are solving problems and approaching their respective markets with leading-edge technology and new ideas. The program also enables us to get direct feedback from our ICBA partner banks.
Ferrell (CSI): Staying on top of the latest fintech developments ensures that we can provide partnerships to help meet the needs of our customers.
Montesanti (Jack Henry): Jack Henry’s commitment to openness allows our customers to integrate fintech solutions into other Jack Henry solutions – not just the core.
Taliaferro (Finastra): Once we’ve identified interesting fintechs, we invite them to join our platform FusionFabric.cloud. Our customers look to Finastra not only for our own products, but as a source of innovation from third parties.
Barry (FIS): Having a program that can market-test/vet a new product solution concept or idea over the duration of the program allows us to focus on proactively selecting high-potential startup partnerships that will meet our customers’ needs and allow for opportunities to invest early in growing companies.
Ferrell (CSI): The program helps put qualified companies in front of CSI. We can meet multiple companies in a short timeframe. CSI has created partnerships with several ICBA ThinkTECH accelerator alumni.
Montesanti (Jack Henry): Jack Henry is always looking for ways to expand our solutions, so partnerships and acquisitions are the preferred method to provide new solutions without taxing our internal development resources.
Taliaferro (Finastra): We look at ThinkTECH Accelerator as a source of fintechs to add to our ecosystem. Since the ICBA ThinkTECH Accelerator has already vetted the fintechs and begun to solicit feedback from community banks, this further increases our confidence that these fintechs will be successful as part of FusionFabric.cloud.
Barry (FIS): I highly recommend setting up time to attend the ICBA ThinkTECH Accelerator program for the ability to interact directly with founders of companies that are doing some great innovative things in the market.
Ferrell (CSI): When we are part of early conversations, we can help our customers navigate through their strategy and decisions. Making sure all parties involved have clear communication on the community bank’s goals and timelines is key to ensuring a successful partnership.
Montesanti (Jack Henry): We really enjoy helping community banks and fintechs connect so that community banks can flourish.
Taliaferro (Finastra): As a financial institution, be willing to experiment. But do so in a way that minimizes disruption to your business by using POCs, trials, and leveraging your existing providers to more easily source and integrate with emerging fintechs.
Participating in the Accelerator allows core providers to hear what’s coming down the pike and gain line of sight into the pain points and emerging solutions that community banks need. Specifically, this experience helps them to their customers’ needs; accelerate their own R&D effort; and get an early look at upcoming solutions and potential acquisition targets. It’s a win-win, ensuring that there are solutions to address existing and emerging community bank needs.
To learn more about the program and its 2022 cohort, join us for the ICBA ThinkTECH Accelerator virtual kick-off event on Jan. 11 at 5:30 p.m. (Eastern). Register now. To dive deeper into how to work with your core provider on fintech partnerships, check out our checklist.
Charles E. Potts is ICBA executive vice president and chief innovation officer.