To build on last week’s piece (15 Banks and Fintechs Doing it Right), I put myself in the shoes of an early stage fintech company’s Founder. Specifically, as someone with a new idea looking to develop meaningful financial relationships with regional and community banks in the United States. With many exciting and creative fintech companies beginning to collaborate with traditional institutions, what follows is a list of 18 banks — all between $1Bn and $25Bn in size — that I think should attract the tech world’s interest.
Believe it or not, but bank CEOs and their teams are working hard to grow revenue, deposits, brand, market size and market share. So a hypothetical situation to tee-up today’s column.
Imagine we developed a new, non-disruptive but potentially profit-enhancing software product (let’s put it in the “know-your-customer” sector since banks already spend money on this). As the Founders, we want to approach banks that might be ready to do more than simply pilot our product. While our first instinct would be to focus on recognizable names known for taking a technology-based, consumer-centric focus to banking, the low hanging fruit might be with CEOs and executive teams at publicly traded community banks — many of whom are above $1Bn in asset size and are just scratching the surface of developing meaningful fintech relationships.
With the idea that smaller banks can act faster to at least consider what we’re selling, we cull the field, knowing that as of June 1 of this year, the total number of FDIC-insured institutions equaled 6,404; within this universe, banks with assets greater than $1Bn totaled just 699.
So now we are focused on a manageable number of potential customers and can spend time getting smart on “who’s-doing-what” in this space. Can we agree that we want to approach banks that share common characteristics; namely, strong financial performance that sets them apart from their peers and operations in strong local markets or big economic states? Good, because assuming we are starting from scratch in this space, here are our top prospects (listed in no particular order with approximate asset size):
- Citizens Business Bank in California ($7.3Bn)
- Pinnacle Financial in Tennessee ($6Bn)
- Farmers & Merchants in California ($5.5Bn)
- Western Alliance in Arizona ($10Bn)
- Eagle Bank in DC ($5.2Bn)
- Prosperity in Texas ($21.5Bn)
- BankUnited in Florida ($19.2Bn)
- BofI “on the internet” ($5.2Bn)
- First NBC in Louisiana ($3.7Bn)
- Burke & Herbert in Virginia ($2.6Bn)
- Banner in Washington ($4.7Bn)
- Bank of Marin in California ($1.8Bn)
- Cardinal Bank in Virginia ($3.4Bn)
- State Bank in Georgia ($2.8Bn)
- TCF Financial in Minnesota ($19.3Bn)
- United Bank in Connecticut ($5.5Bn)
- Boston Private in Massachusetts ($6.8Bn)
- Opus Bank in California ($5.1Bn)
At a time when the concept of service is fast changing to reflect highly functional technology and “always-available” customer experiences, these eighteen banks — already successful in their own right — strike me as just the types to think about approaching.
*Now I’m not suggesting everyone pick up the phone and call each’s institutions CEO. But If you are with a fintech thinking about partnerships and collaboration, you could do a whole heckuva lot worse than spending some time learning what makes all of these banks more than just financially strong and consumer relevant.