Many bank CEOs and their executive teams are looking for emerging methods, products and services to reach new customer segments to drive growth. Today, I identify fifteen banks in the United States, all under $20Bn in asset size, that are growing with the help of fintech companies.
With the rise of many innovative, non-traditional financial services companies, leaders of financial institutions can find themselves overwhelmed when it comes to selecting the right partners. If you are running a bank that doesn’t have multiple incubators, accelerators and skunk work projects already under way, knowing where to participate with the fintech community can prove quite the challenge. Should it be with an upstart touting a new credit decisioning models? What about one with a new lending model? In the quest to become more “nimble” and responsive to consumer demands, do you partner? Refer business? Accept referrals? The list of not-so-rhretorical questions goes on and on…
Now, quite a bit of digital ink has been spilled over the creativity and aspirations of the fintech community (and its many investors) to transform banking. But not nearly as much for banks looking to do the same. While the efforts of major players like Wells Fargo and Capital One garner well-deserved attention, it is my belief that for fintech companies keen to collaborate (and not compete) with banks, developing relationships with banks from $1Bn to $10Bn — there are approximately 550 — and those from $10Bn to $50Bn — there are approximately 75 — may prove as lucrative over the next few years as working with the 30 banks that have assets from $50Bn up.
With this parameter in mind, I polled a few of my team at Bank Director to compile a list of banks, all under $20Bn in asset size, that “play well” with fintechs to show that you don’t have to be the biggest of the big to benefit from this wave of new market participants. Here, in no particular order, are fifteen banks with notable relationships and/or efforts.
- Eastern Bank checks in at $9.7B in asset size, and the Massachusetts-based bank stands out for bringing on some great fintech talent; notably, hiring ex-Perkstreet CEO Dan O’Malley and several of his colleagues to lead its innovation unit;
- California’s Fremont Bank ($2.7B) caught our eye, as the bank was a fast adopter of Apple Pay;
- River City Bank ($1.3B, Sacramento) has a fintech guy — Ryan Gilbert, Better Finance — on their board;
- The Bancorp ($4.5B) backs a lot of fintech/nonbank firms like Moven and Simple;
- Radius Bank (just under $1Bn) is a Boston institution with just two physical locations — but is forming alliances with fintech startups to be “everywhere;”
- Union Bank & Trust in Nebraska works with Betterment, an automated investing service, to offer its customers a smart, simple and easy way to invest;
- A real pioneer, CBW Bank ($14.5B) is a community bank in Kansas and one of the first U.S. banks to use the Ripple protocol for modern, real-time payments between the U.S. and other countries globally;
- In the Pacific Northwest, Washington Trust ($4B) is vocal on being tech-friendly;
- In Texas, First Financial ($6B) is big on mobile and being innovative — working with Mitek, they are the first regional bank to offer mobile photo bill pay);
- Banc of California ($6B) uses nCino to automate and standardize its commercial and SBA lending;
- PacWest ($16B) are all about lending to technology and fintech companies;
- The Bank of the Internet, BofI, is a full-service internet bank with $5 billion in assets;
- Everbank ($16B) plays well with Fintech while adorning the stadium of the NFL’s Jacksonville Jaguars;
- Rockland Trust has a SVP of digital and payments innovation, which is unusual for a $5.6 billion dollar bank; and
- The $17 billion-asset First National Bank of Omaha hosts a weekend-long hackathon, a competition common in the tech world but rarely hosted by banks, to attract talent into its ranks.
By no means is this a complete list of community banks collaborating with fintechs in the U.S. If I was to expand the list up in size, you can bet larger regional standouts like KeyBank would merit recognition for their work with companies like HelloWallet. In the spirit of learning/sharing, who else should be added to this list? Let me know via twitter or by leaving a comment below.