How A Cat Named Jackson Ties Into the Biggest Tech IPO in 15 Years

As we wind down the year, I’m taking a look back on the biggest tech IPO of 2020.

WASHINGTON, DC — I first ventured into nCino‘s Wilmington, NC headquarters when the pioneer in cloud banking and digital transformation solutions employed less than ten people. Today, that number exceeds 1,000. Since that first flight into ILM, I have met a number of their senior team, enjoyed myself at their annual nSight conferences and heard how cloud-based companies like theirs appeal to bank executives and their boards.

Their employment growth parallels the success of their business, one that transitioned from a private company to a public one this summer. As you can see, their IPO (code-named “Project Jackson”) made it on the cover of Bank Director magazine this summer.

I was delighted that our editorial team chose both the story name, and cover art, based on the inspiration behind “Project Jackson.” In addition, proud that we shed light on a much bigger story; namely, how the Covid-19 pandemic impacts the process of going public.

As an early New Years gift, I took this out from behind the BankDirector.com paywall and share the unabridged article, authored by John Maxfield, below.

Project Jackson

Nobody at nCino slept well the night of July 13, 2020. The company, a pioneer of cloud-based services for financial institutions, was going public the next day. Never before had the spotlight shone so intensely on the rapidly growing technology company based in Wilmington, North Carolina. It was a moment of truth. Its leadership team and employees had spent almost a decade building the company — now investors would judge it over the course of a single day. Going public is always a gamble, but never more so than in a global pandemic.

Dory Weiss woke up early the next morning. The 41-year-old vice president of engineering at nCino was scrambling to upload photos onto a mobile app. The app would broadcast images taken by nCino employees onto Nasdaq’s seven-story monitor in Times Square. What better way to mark the occasion, Weiss thought, than a picture of her cats with an nCino-themed pinata that a colleague gave her for Cinco de Mayo? There was only one problem. “Getting cats to do anything you want them to do is a fool’s errand,” Weiss laments. “So there was this laughably bad photograph of the cats and my partner, Katie, trying to stage them.”

Similar scenes were unfolding in hundreds of homes across Wilmington and around the world. Over 900 nCino employees in 12 countries uploaded more than 6,000 photos that morning. They then spent hours watching a livestream of Nasdaq’s giant monitor as it cycled through the images.

Weiss arrived at nCino’s headquarters around 8 a.m. Hundreds of her colleagues would have done the same, but for the social-distancing restrictions enacted to slow the spread of Covid-19. The few dozen who showed up that morning planted themselves in a pair of common areas on the second and third floors, with the rest patched in remotely.

Everyone was watching CNBC.

“There’s an IPO today,” announced David Faber, co-anchor of CNBC’s morning show, Squawk on the Street. “nCino, N-C-N-O. Cloud software for financial institutions — fintech.”

“I want that,” co-anchor and Mad Money host Jim Cramer responded. “What is it? nCino?”

“Yeah. N-C-N-O,” Faber repeated.

“Done. I want 10%.”

After pricing at $31 per share the night before, nCino’s stock opened for trading at $71 two minutes before noon. People erupted into cheers. By the end of the day, nCino’s stock closed at $91.59, good for a 195% surge on its first day as a public company. Only one other technology company in the past 20 years — China’s search engine giant, Baidu, which debuted in 2005 — performed better.

Had this been the height of the tech bubble in early 2000, no one would have been surprised. But this was two weeks after the close of the worst economic quarter in the United States since the Great Depression. Nearly a third of economic output had vanished. Four months earlier, 6.9 million people filed for unemployment benefits in a single week. How did nCino’s share price nearly triple in this environment? And how did its executives, employees and advisors navigate the intricacies of filing an initial public offering — from securing regulatory approval, to enticing investors, to actually listing on the exchange — when they couldn’t meet with each other, let alone investors, in person?

The story of nCino’s IPO — code-named “Project Jackson,” after CEO Pierre Naudé’s cat, which was named after the nCino employee, Reid Jackson, whose car it was found under one day in the company’s parking lot — is compelling on its own. Yet, it also sheds light on a bigger story about how the process of going public may have been permanently altered by the Covid-19 pandemic.

The journey to become a publicly traded company started for nCino at a meeting on the 27th floor of Bank of America Corp.’s building in midtown Manhattan on Sept. 24, 2019. The nation’s second largest bank by assets was acting as its lead underwriter; it’s also an nCino client. “We sat down, talked about the company and mapped out the process, working backward from when we wanted to go public,” recalls Jonathan Rowe, chief marketing officer of nCino.

The original plan was to debut in late May. That way, nCino could benefit from the results of its latest fiscal year, which would close on Jan. 31, yet still beat the summer lull when traders and portfolio managers flee New York City for places like the Hamptons.

The biggest undertaking at that stage was drafting the S-1, the document submitted to the Securities and Exchange Commission for an IPO. In nCino’s case, its S-1 ran 322 pages, densely packed with legalese, risk factors, an explanation of the business and financial statements for the preceding three years. “Drafting the S-1 is an incredibly involved process,” says nCino’s chief corporate development and legal officer, Greg Orenstein, who took the lead on the process. “Essentially, we are describing over eight years’ worth of work, product development, innovation and customer success in one document for investors to use to decide whether to invest in our company.” Hours were spent parsing the simplest terms, like how to distinguish between banks that were customers of nCino, and customers of those banks — nCino has “customers,” it decided; its bank customers have “clients.”

Everything proceeded like clockwork in the two months after nCino confidentially filed its S-1 on the Thursday before Christmas 2019. Its IPO working group responded to questions and addressed requested edits to the document from the SEC. Its financial team closed the books on the 2020 fiscal year. And its executives and advisors began preparing the presentation they would use on its roadshow, a grueling two weeks spent flying around the country pitching the company’s stock to institutional investors.

Then Covid-19 struck.

“We were moving along as the virus spread around the country, then the markets started getting hit,” recalls David Rudow, nCino’s chief financial officer. “The speed at which the stock market declined was very concerning. To me, it’s like, ‘The market is discounting some really bad news.’”

By mid-March, the stock market was in freefall. The S&P 500 dropped 9.5% on March 12 — the sixth worst drop in the history of the index. Four days later, it tumbled 12% — the biggest single-day decline since Black Monday on Oct. 19, 1987. All told, the S&P 500 had lost 38% of its value by then. Meanwhile, the Chicago Board Options Exchange’s Volatility Index, or VIX, a measure of expected future stock market volatility, spiked by a factor of five — exceeded in recent years only in the immediate wake of Lehman Brothers’ bankruptcy in 2008.

“The arrival of the pandemic and market volatility was really an opportunity to sit back and try to figure out what was going to happen,” says Martin Wellington, managing partner at Sidley Austin’s office in Palo Alto, California, who served as nCino’s outside counsel in the IPO process. “I’ve done IPOs and lots of other capital markets transactions in the midst of market volatility, but the thing that made this fundamentally different was the inability to have physical interactions with people.”

By late March, Rudow says, it became a foregone conclusion. “We said, ‘You know what? We’re just going to hold off.’”

The decision to delay the IPO fell to nCino’s CEO, Naudé, a distinguished-looking South African who’s built like a rugby player and speaks with an Afrikaans accent.

Sharing the stage with Frank Sorrentino (CEO of ConnectOne Bank) and Pierre Naudé at Experience FinXTech

The 61-year-old executive grew up as one of five children of a well-to-do farmer in Worcester, South Africa. From an early age, he fit the psychological profile of an entrepreneur, exhibiting a restless disdain for authority and an appetite for competition. “I always struggled with authority over me, people trying to tell me what to do,” he says. Despite this, Naudé served an obligatory year in the South African military after graduating from high school. He spent three months in basic training and two months in guerrilla warfare training before returning to his hometown for the last seven months to effectively serve as a beat cop. “Nothing ever happened,” he says. “If I think back, still to this day, I think we were as useless as you possibly could get.”

A turning point came after Naudé finished his military service. “I sat back and said, ‘What am I going to do now?’” he recalls. “I literally did not have a plan.” So he applied for a job at a bank — Boland Bank, the equivalent of a regional bank in the United States. He spent the next few months learning how to program, and then the following eight years doing just that. One of Boland’s claims to fame during Naudé’s time at the bank, and a project he was intimately involved in, was stringing together the first ATM network in South Africa. “We wrote lots of code, wrote the core, wrote teller systems, wrote deposit systems, a loan system, et cetera,” Naudé says.

After traveling to the United States to train and scout technology for Boland, Naudé immigrated with his wife and infant daughter to America in 1987. He moved first to Philadelphia, where he worked as a consultant. He then moved to Iowa, working while going to school at Upper Iowa University, before a former colleague from Boland recruited him to work at S1 Corp., a software development company near Atlanta. It was at S1, which specialized in payment processing and financial services software, that Naudé made the connections that later brought him to nCino.

Naudé is a popular leader by all accounts. “Why do I always tear up when this man talks,” commented an nCino employee in an internal chat log provided to the author from a company “all-hands” meeting in April 2020. “For those of you who are starting on your career paths and are fortunate enough to be part of the nCino family,” wrote another, “embrace it and appreciate it. There is no other company that even comes close in culture to what we have here.”

This is intentional. “The thing I want to make sure you understand is that we have never paid a consultant to come and tell us about culture and values and those things,” Naudé says. “I think the benefit of being 30 years old, coming to America, starting at the bottom again, and working for a variety of managers — that experience gave me a deep understanding of the value of people. And so when we started the company, literally after about six months, we probably had 20 people, I thought, ‘Well, it’s probably time to get our values together.’ So I drew them up. They’re the same values that drive us today.”

Among Naudé’s colleagues at nCino, Orenstein probably knows him best. “I’ve been fortunate to know Pierre for 15 years and I consider him a dear friend,” says Orenstein, who had previously worked with Naudé at S1. “Pierre is just Pierre. There’s no pretending to be someone he’s not. He’s just an extremely transparent person, and as you spend time with him, you pick up on that.”

While Naudé decided in early March to delay nCino’s IPO, the project’s working group of executives, legal advisors and investment bankers continued laboring behind the scenes. It was never a matter of if nCino would go public, only a matter of when. One question looming over them was whether it was even possible to pull off an IPO in a pandemic, given that they wouldn’t be able to meet prospective investors in person.

It was proposed in early April that they start testing the waters with investors over video-conferencing platforms like Zoom Video Communications and BlueJeans by Verizon. The initial reaction, Wellington recalls, was, “We’ll never do that. Let’s just wait for this to pass, and then in May, when we can get back together with people, we’ll go around and do the usual testing-the-waters meetings.” Within weeks, however, their perspective had shifted. “We were like, ‘Okay, we’re doing this virtually,’” says Wellington, who advises regularly on IPOs. “The bankers were saying, ‘Yeah, we’ve done one or two, and it seems to work pretty well. But of course, we’ll wait for this to pass before we can do the roadshow, because no one would ever invest in an IPO without being able to meet the management team in person.’”

After the federal government declared the Covid-19 pandemic a national emergency on March 12, the IPO market froze. Not a single company went public for the rest of the month, compared to nine IPOs over the same period in 2019. The market started thawing in April, with new listings slowly trickling out. The pace picked up in May, with seven IPOs in the first week alone. But the breakthrough moment came on May 21.

That day, shares of direct-to-consumer insurance company SelectQuote climbed 35% on its first day of trading. That opened the floodgates. Thirty-seven companies went public in June, nearly a dozen more than in June 2019. Among those was ZoomInfo Technologies, which closed 62% higher in its debut. Far from being an IPO apocalypse, 2020 had become a bonanza.

“We thought in late March and early April that you would never get an IPO done in this market,” Wellington says. “But not only were IPOs getting done, the receptivity to them was surprising, frankly.”

The Federal Reserve is largely to thank for this. By March 15, it had cut the federal funds rate to 0%. That same day, it announced a round of quantitative easing, an unconventional monetary policy tool first deployed in the financial crisis of 2008-09 that floods capital markets with liquidity in order to drive down long-term interest rates. Over the next two and a half months, the Fed purchased $2.8 trillion worth of government bonds and other long-term securities. This lowered bond yields and triggered a deluge of capital into equities — especially technology stocks. Throughout the following four months, despite a steep drop in economic activity and sharp increase in unemployment, the S&P 500 recovered most of its lost ground, led by the likes of Amazon.com, Microsoft Corp. and Apple.

These events coincided with auspicious developments within nCino, too. On May 18, it completed its first-quarter review, capturing the company’s success with the Paycheck Protection Program, a loan program administered by the Small Business Administration designed to help small businesses survive the pandemic. All told, banks originated over $50 billion in PPP loans using nCino’s cloud-based Bank Operating System. New customers purchased its software; existing customers subscribed to new services. The coronavirus crisis had become a proving ground for nCino.

The moment was ripe, nCino’s executives concluded. They decided to pull the trigger after Memorial Day. The company would go public in mid-July.

We wanted to be one of the companies that helped open the IPO market,” Rowe explains. “We’ve always seen ourselves as a leader in cloud banking, so we brought that same mentality to the IPO process — not only from the perspective of the financial services industry, but for the economy overall.”

The success of nCino through the early stages of the Covid-19 pandemic wouldn’t come as a surprise to anyone who had followed the company. Amongst its founding software benefits, as it incubated within Live Oak Bancshares in 2010, was facilitating remote work.

The Wilmington-based bank specialized in originating SBA loans to veterinarians, which minimized credit risk because the loans were backed by the government. But to generate enough scale to earn a respectable profit, the strategy had to expand nationwide. In lieu of branches, Live Oak bought a pair of corporate jets — “branches in the sky” — to shuttle loan officers around the country winning business. There was just one catch. To make the vision a reality, the bank needed software that enabled its loan officers to remotely complete loan files from end to end.

Of the millions of lines of code embedded in nCino’s software, Nathan Snell wrote the first one. Even on a video conference call, the 34-year-old chief innovation officer of nCino emits the peculiar breed of confidence that’s born from a union of acute intelligence and knowing success from a young age. As the son of an engineer, Snell grew up surrounded by technology in Santa Cruz, California. His earliest memory is of using a soldering iron to build computers. He taught himself how to program and, at age 11, convinced a popular talk radio host in San Francisco to hire him to design her website.

Snell eventually made his way to Live Oak in 2010, after graduating from the University of North Carolina Wilmington and getting to know the bank’s founder and CEO, James “Chip” Mahan, and president, Neil Underwood. “I wasn’t actually sure if I wanted to join them fully, so I did some consulting to start,” Snell says. “About a week in, I was looking at how they were operating and was like, ‘Wow, there’s a lot of opportunity here.’ I spent a lot of time with Chip and Neil, and they were both just phenomenal. As a budding entrepreneur, I was like, ‘Wow, it would be amazing to be able to work directly with these guys and learn from them.’ So I shuttered what I was doing and joined them full-time.”

In doing so, Snell became nCino’s first employee.

From its earliest days, nCino had grand ambitions. Naudé hung a sign in its makeshift office space declaring it the global headquarters of the worldwide leader in cloud banking. “Every day you walked in and you’re like, ‘Wow, we’re the worldwide leader with only 10 people,’” recounts Rowe, who joined the company eight years ago as one of its earliest employees.

The year 2012 proved to be a seminal one for nCino. After other banks expressed interest in Live Oak’s software, nCino, a play on the Spanish word for “oak,” was spun out as a separate company. By the end of that year, the newly independent company had raised $9 million in capital, hired more employees and signed on 25 customers. It followed that in 2013 by raising $10 million from Wellington Management Co., a prominent institutional investor in the banking space, and hosting its first user conference, nSight, which long-tenured employees look back on as the company’s coming-out party. Over the next five years, nCino would grow to 130 customers and 270 employees.

Originally, nCino focused on the smaller institutions that populate the financial services industry — community and regional banks as well as credit unions. But that changed in late 2014, when SunTrust Banks, a $205 billion bank at the time, became its first enterprise banking client. (SunTrust has since merged with BB&T Corp. to form Truist Financial Corp., the sixth largest commercial bank in the United States. It remains an nCino customer.)

SunTrust was spending north of $20 million a year to digitize its commercial lending system. That’s when Pam Kilday, head of operations for its wholesale bank, came across nCino. “I thought, ‘This is exactly what I’m trying to build for not only commercial loans, but all of business banking,’” Kilday recalls. “We decided to investigate the feasibility of bringing nCino in, doing kind of a co-development, which flew in the face of everything we had been doing. At first, just about everybody wanted to fire me.”

(A year after retiring from SunTrust in 2018, Kilday joined nCino’s board of directors.)

The technology wasn’t the only thing that attracted SunTrust to nCino, Kilday says — it was also the people. “I thought Pierre was the real deal,” she says. “Everything we saw, every commitment they made to us at that time, they delivered. Whether it was documentation on their security setup, whether it was their contractual agreements with Salesforce at the time. Everything they told me was true. If they could do something, they would say it. If they couldn’t, they would tell me.”

That may sound trite, but it’s a frequent refrain of nCino customers. “Our relationship with nCino developed before I got to know Pierre, though I’ll say he sealed the deal as most CEOs can do when they get into a high-pressure situation,” says Frank Sorrentino III, chairman and CEO of ConnectOne Bancorp, a $7.6 billion bank based in Englewood Cliffs, New Jersey. “But the nCino organization sold the relationship on its own. There’s a great group of people there. They’re committed to building a better mousetrap to help banks provide a level of service that clients will expect in the future.”

By the time nCino publicly filed its S-1 with the SEC on June 22, 2020, it boasted more than 1,100 bank and credit union customers, over 900 employees spread across seven global offices and $138 million in annual revenue.

On July 14, the morning of nCino’s IPO, Rowe woke up at 4 a.m. and walked three blocks to the beach. Nine years earlier, he left a position as a professor at the University of North Carolina Wilmington to join the embryonic nCino team. Rowe is a study in contrasts. He masks intensity with levity. He’s an executive at nCino yet takes video calls during the pandemic in the unfinished basement of his house, framed by hastily constructed shelves and insulation falling from the ceiling.

Sitting on the beach that morning waiting for the sunrise, Rowe was more reflective than ecstatic. He had been involved in Project Jackson since the beginning. And now, despite nCino’s decision to go public in a global pandemic, there was little doubt that it would be a success. The evening before, 8 million shares of nCino’s stock, equal to 8.5% of its total outstanding share count, were allocated to institutional investors at $31 per share. The demand for the offering was 49 times oversubscribed. Far from being a hindrance, conducting a virtual roadshow, consisting of more than 50 meetings over five days, proved to be a blessing in disguise. “I didn’t think about it until now,” says Rudow, “but because you’re touching so many more people, it probably helped build the book.”

But Rowe and the marketing team’s work wasn’t done. They mailed over 900 swag boxes to employees, packed with miniature nCino-themed bells to mark the occasion. They repainted and reconfigured Naudé’s office to serve as a makeshift studio for the media interviews he would conduct that day. And along with Nasdaq, they co-hosted an internal broadcast giving nCino employees a behind-the-scenes view of the day’s events, walking them through exactly how a company goes public.

While the stock market opens for trading at 9:30 a.m. EST, it isn’t until later in the morning that newly listed companies on Nasdaq start to actively trade. “We do not open up our IPOs at the same time as the broader market,” explains Joe Brantuk, chief client officer at Nasdaq. “There’s about 8,000 publicly traded companies in the United States and we want to give portfolio managers and traders an opportunity to position their existing holdings at the market open before turning their focus to new listings.”

Instead, Nasdaq reserves a “quotation window” for each new listing on the morning it debuts. This is the on-deck circle, if you will, just before a company’s stock begins trading. During this window, which can last from 10 minutes to multiple hours, Nasdaq’s market makers work with a stock’s underwriters to find an “indicative price” at which there’s a balance between buyers and sellers. If there are too many sellers relative to buyers, the stock could dramatically fall. If there are too many buyers relative to sellers, the reverse will happen. Neither is ideal. To minimize volatility, the goal is to find the price at which approximately 10% of the newly listed shares will trade hands — nCino’s magic number was 800,000 shares.

The quotation window for nCino opened at 10:10 a.m.

At 10:15 a.m., Nasdaq’s market makers were fielding buy orders for 4.7 million shares versus sell orders of 200,000 shares.

At 10:48 a.m., 486,000 shares were paired off at $62.

At 11:00 a.m., 708,000 shares were paired off at $65.

At 11:15 a.m., the threshold had been reached: 931,000 shares paired off at $70.

Still, they kept going.

By 11:40 a.m., 1.5 million shares were paired at $71 — about 20% of the total raise.

At 11:55 a.m., Jay Heller, head of capital markets at Nasdaq, gave the two-minute warning.

At 11:58 a.m., nCino’s stock opened for trading at $71 per share.

By 4 p.m., when the market closed for the day, nCino’s stock stood at $91.59 per share.

There is no single answer to the question of what makes for a successful IPO. The timing must be right. The story must be right. The market dynamics must be right. And, especially in the case of nCino, which went public in a pandemic, you must make the most of a challenging situation.

There is no question that nCino prevailed on all accounts. It is a company that is leading the digital revolution of one of the biggest industries in America. Its culture and story appeal to investors across the board. And its nimble response to the restrictions imposed on the IPO process from the pandemic — from negotiating the inability to meet with investors in person to orchestrating an IPO experience that nearly 1,000 remote employees could participate in — made it, in many ways, bespoke for this moment.

Streaming Now: The AOBA Summer Series

Dreaming of a trip to Phoenix, and the Acquire or Be Acquired Conference, next January doesn’t seem so odd this summer.

WORKING FROM HOME — For decades, business leaders began to book their travel to the Arizona desert — for Bank Director’s Acquire or Be Acquired Conference — in early August. As evidenced by the nearly 1,400 at the Arizona Biltmore earlier this year, the annual event has become a true stomping ground for CEOs, executives and board members. Many laud it as the place to be for those that take the creation of franchise value seriously. I’ve even heard it referred to as the unofficial kickoff of banking’s new year.

Just seven months ago, Acquire or Be Acquired once again brought together industry leaders from across the United States to explore merger opportunities, acquisition trends and financial growth ideas.  With 418 banks represented, participants considered strategies specific to lending, deposit gathering and brand-building. They talked regulation, met with exceptional fintechs and networked with their peers under sunny skies.

Not one openly worried about a global pandemic.

Yet here we are, all of us dealing with fast-moving challenges and unimaginable risks.

So what can we do to help?

This is the question that proved the catalyst for our new AOBA Summer Series.  Indeed, we created this free, on-demand, compilation of thought leadership pieces to provide pragmatic information and real-world insight.

With CEOs and leadership teams being called upon to make decisions they have never been trained for, we realized the type of information typically shared in January has immediate merit this summer.  So instead of waiting until winter, this new Summer Series provides both color and context to the tough decisions — those with profound long-term consequences — that confront executives every day.

Ten videos comprise the AOBA Summer Series, with topics appropriate for the C-suite’s or board’s consideration.  Streaming on BankDirector.com, we talk about how important scale has become in the banking industry… how one’s technology strategy cannot be delegated… how it certainly seems that there will be banks that come out of this in a bigger, stronger state.  Here’s a screen-grab of what you’ll come across:

Screen Shot 2020-08-12 at 5.21.32 PM

In one-on-one conversations like these, we acknowledge how net interest margins are compressing — which will drive up efficiency ratios — and credit costs are climbing.  And we look at leadership, appreciating that many are leading in new, more positive and impactful ways.  In addition, this new series provides:

A SNAPSHOT ON CURRENT CONDITIONS
At our January Acquire or Be Acquired Conference, Tom Michaud, President & CEO, Keefe, Bruyette & Woods, A Stifel Company, provided his outlook for the industry. Now, we ask him to update his perspectives on M&A activity and share his take on the potential implications of the pandemic.  

HOW FINTECHS FIT
A growing number of technology companies have been founded to serve the banking industry.  Not all of them have what it takes to satisfy bankers.  During various sessions we learn how a variety of banks approach innovation — and the specific attributes a leadership team should look for in a new fintech relationship.

THE LEVERS OF VALUE CREATION
With nCino’s CMO, Jonathan Rowe, our Editor-in-Chief talks about the levers of creating value vis-a-vis the flywheel of banking. Together, they explain how certain technologies promote efficiency, which promotes prudence, thereby promoting profits, which can then be invested in technology, starting the cycle all over again.

Screen Shot 2020-08-12 at 5.21.46 PM

Hearing from investment bankers, attorneys, accountants, fintechs, investors and — yes, other bankers — about the outlook for growth and change in the industry proves a hallmark for Acquire or Be Acquired, be it in-person or online. 

As this new series makes clear, The future is being written in ways unimaginable just a few months ago.  We invite you to watch how industry leaders are making sense of the current chaos for free on BankDirector.com.

Who is the Next nCino?

WASHINGTON, DC — With this week’s news that nCino is readying itself for an IPO, I thought to postulate about who “the next nCino” might be in the fintech space. By this, I mean the tech company about whom bank executives cite as doing right by traditional institutions.

For context, nCino developed a cloud-based operating system for financial institutions. The company’s technology enables both customers and financial institutions to work on a single platform that’s optimized for both retail and commercial accounts. In simple terms, they provide everything from retail and commercial account opening to portfolio management for all of a bank’s loans.

In its IPO filing, the company says it works with more than 1,100 financial institutions globally — whose assets range in size from $30 million to $2 trillion. Personally, I remember their start and been impressed with their growth. Indeed, I’ve known about nCino since its early Live Oak Bank days. I’ve gotten to know many on their executive team, and just last Fall shared a stage with their talented CEO, Pierre Naudé, at our annual Experience FinXTech conference in Chicago.

Al Dominick, CEO of Bank Director + FinXTech, Frank Sorrentino, Chairman & CEO of ConnectOne Bank and Pierre Naude, CEO of nCino at 2019’s Experience FinXTech Conference in Chicago, IL.

So as I think about who might become “the next” nCino in bankers’ minds across the United States, I begin by thinking about those offering solutions geared to a bank’s interest in Security, leveraging Data + Analytics, making better Lending decisions, getting smarter with Payments, enhancing Digital Banking, streamlining Compliance and/or improving the Customer Experience. Given their existing roster of bank clients, I believe the “next nCino” might be one of these five fintechs:

While I have spent time with the leadership teams from each of these companies, my sense that they might be “next” reflects more than personal insight. Indeed, our FinXTech Connect platform sheds light on each company’s work in support of traditional banks.

For instance, personal financial management (PFM) tools are often thought of as a nice perk for bank customers, designed to improve their experience and meet their service expectations. But when a PFM is built with data analytics backing it, what was seen as a perk can be transformed into a true solution — one that’s more useful for customers while producing revenue-generating insights for the bank. The money management dashboard built by Utah-based MX Technologies does just that.

Spun out of Eastern Bank in 2017 (itself preparing for an IPO), Boston-based Numerated designed its offering to digitize a bank’s credit policy, automate the data-gathering process and provide marketing and sales tools that help bank clients acquire new small business loans. Unlike many alternative lenders that use a “black box” for credit underwriting, Numerated has an explainable credit box, so its client banks understand the rules behind it.

Providing insight is something that Autobooks helps small business with. As a white-label product that banks can offer to their small-business customers, Autobooks helps to manage business’s accounting, bill pay and invoicing from within the institution’s existing online banking system. Doing so removes the need for small businesses to reconcile their financial records and replaces traditional accounting systems such as Quickbooks.

The New York-based MANTL developed an account opening tool that comes with a core integration solution banks can use to implement this and other third- party products. MANTL allows a bank to keep its existing core infrastructure in place while offering customers a seamless user experience. It also drives efficiency & automation in the back-office.

Finally, Apiture’s digital banking platform includes features such as digital account opening, personal financial management, cash flow management for businesses and payments services. What makes Apiture’s business model different from most, though, is that each of those features can also be unbundled from the platform and sold as individual modules that can be used to upgrade any of the bank’s existing systems.

Of course, these are but five of hundreds of technology companies with proven track records of working with financial institutions. Figuring out what a bank needs — and who might support them in a business sense — is not a popularity contest. But I’m keen to see how banks continue to engage with these five companies in the months to come.

Predicting The Future, Based On 6 Timeless Tenets

WASHINGTON, DC — Over the years, I’ve used this blog to share stories and ideas that reflect words like resiliency, agility and resourcefulness.  Typically, posts distill my experiences gained through travel or conversation.  Today, I am taking a slight detour in order to highlight a new project that gets to the heart of running a strong and successful business.

Our team crafted this 20-page report from interviews with more than a dozen CEOs.  All from top-performing financial institutions, you will recognize names like Brian Moynihan from Bank of America, Rene Jones from M&T Bank and Greg Carmichael from Fifth Third. This piece offers unique and valuable insights on:

  1. Leadership;
  2. Growth;
  3. Risk management;
  4. Culture;
  5. Stakeholder prioritization; and
  6. Capital allocation.

Bank Director and nCino, a provider of cloud-based services to banks, collaborated on this special project, which takes its inspiration from Amazon’s business model.

Entitled The Flywheel of Banking: Six Timeless Tenets of Extraordinary Banks, I strongly encourage anyone interested in the future of the banking industry to take the time to read it.  Make no mistake, this is no 500 word op-ed.  But it will be worth the hour or so it takes to unpack the insight and inspiration gleaned by our team.  I invite you to let me know what you think.

Thanks to nCino for Inviting Me to Speak

RALEIGH, NC — How are rapid technological innovations changing the banking industry? This question anchored my conversation with Neil Henderson — Head of Business Advisory, Macquarie Bank, Jonathan Holman — Head of Digital Transformation, Santander UK and Elizabeth Dobers — EVP, Executive Director, Business Banking, BBVA Compass at nCino’s annual nSight conference

I’m working on a post that summarizes my time at this event.  But I’d be remiss not to thank nCino’s team for inviting me to speak on the Current State of Global Banking.  What a a tremendous job of bringing together hundreds of representatives from global enterprise banks, regional and community banks and credit unions to discuss trends in financial services and explore the power of the cloud.  My thanks to Pierre, Shelby, Ahron, Josh, Pullen, and many more for your hospitality these past few days!

 

 

Banks, Make Your Move Into the Cloud

Quickly:

  • To deliver a truly end-to-end digital customer experience, banks need to figure out how and when to move into the cloud.

PHOENIX — As we kicked off this year’s FinXTech Summit, I found myself engaged in a conversation about how (and why) banks might “freeze and wrap” their data using their current core system while moving their customer engagement and analytics into the cloud.  While this was my first time hearing that particular description/approach, the underlying logic certainly applies for many of the bankers joining us at the Phoenician.  In fact, it inspired this short video shot during today’s lunch.

As a company, we’ve been writing about banks realizing that the benefits of cloud computing outweigh added security risks for a while now.  But it strikes me that interest in cloud-based platforms has been on the rise of late.  As our friends at Blend shared on BankDirector.com, “the cloud presents opportunities for enhanced efficiencies and flexibility — without any security trade-offs — so it’s no surprise that we’re seeing more organizations shift to the software as a service (SaaS) model.”

Interested to see what a move into the cloud might means for banks?  Take a look at these five cloud-based companies:

  • nCino – expediting loans and workflow on top of force.com;
  • Apiture – an API-banking joint venture between Live Oak and First Data;
  • Payrailz – an API-based payments platform “check-free killer;”
  • Defense Storm – where Big Data meets Cyber for banks; and
  • Greenlight – offering debit cards for kids.

I’ll check in later tonight to recap several presentations that explore what makes for a strong, digitally-solid bank.  Before that posts, I invite you to follow the conference conversations via our social channels.  You can follow me @AlDominick on Twitter — and our team shares ideas and information through @BankDirector plus our @Fin_X_Tech platform. Finally, search & follow #FinXTech18 to see what’s being shared with (and by) our attendees.

##

FWIW, my reference to Amazon.com, Salesforce.com and Oracle in this video traces back to January 2, when Bloomberg reported the first two were “actively working to replace Oracle software running on crucial business systems with lower cost open-source database software.”  For more: Amazon, Salesforce Shifting Business Away From Oracle: Report

21 Reasons I Am Excited About Acquire or Be Acquired

Quickly:

  • Making banking digital, personalized and in compliance with regulatory expectations remains an ongoing challenge for the financial industry. This is just one reason why a successful merger — or acquisition — involves more than just finding the right cultural match and negotiating a good deal.

By Al Dominick, CEO of DirectorCorps — parent co. to Bank Director & FinXTech.

PHOENIX, AZ — As the sun comes up on the Arizona Biltmore, I have a huge smile on my face. Indeed, our team is READY to host the premier financial growth event for bank CEOs, senior management and members of the board: Bank Director’s 24th annual Acquire or Be Acquired Conference. This exclusive event brings together key leaders from across the financial industry to explore merger & acquisition strategies, financial growth opportunities and emerging areas of potential collaboration.

AOBA Demographics

The festivities begin later today with a welcoming reception on the Biltmore’s main lawn for all 1,125 of our registered attendees.  But before my team starts to welcome people, let me share what I am looking forward to over the next 72 hours:

  1. Saying hello to as many of the 241 bank CEOs from banks HQ’d in 45 states as I can;
  2. Greeting 669 members of a bank’s board;
  3. Hosting 127 executives with C-level titles (e.g. CFO, CMO and CTO);
  4. Entertaining predictions related to pricing and consolidation trends;
  5. Hearing how a bank’s CEO & board establishes their pricing discipline;
  6. Confirming that banks with strong tangible book value multiples are dominating M&A;
  7. Listening to the approaches one might take to acquire a privately-held/closely-held institution;
  8. Learning how boards debate the size they need to be in the next five years;
  9. Engaging in conversations about aligning current talent with future growth aspirations;
  10. Juxtaposing economic expectations against the possibilities for de novos and IPOs in 2018;
  11. Getting smarter on the current operating environment for banks — and what it might become;
  12. Popping into Show ’n Tells that showcase models for cooperation between banks and FinTechs;
  13. Predicting the intersection of banking and technology with executives from companies like Salesforce, nCino and PrecisionLender;
  14. Noting the emerging opportunities available to banks vis-a-vis payments, data and analytics;
  15. Moderating this year’s Seidman Panel, one comprised of bank CEOs from Fifth Third, Cross River Bank and Southern Missouri Bancorp;
  16. Identifying due diligence pitfalls — and how to avoid them;
  17. Testing the assumption that buyers will continue to capitalize on the strength of their shares to meet seller pricing expectations to seal stock-driven deals;
  18. Showing how and where banks can invest in cloud-based software;
  19. Encouraging conversations about partnerships, collaboration and enablement;
  20. Addressing three primary risks facing banks — cyber, credit and market; and
  21. Welcoming so many exceptional speakers to the stage, starting with Tom Michaud, President & CEO of Keefe, Bruyette & Woods, Inc., a Stifel Company, tomorrow morning.

For those of you interested in following the conference conversations via our social channels, I invite you to follow me on Twitter via @AlDominick, the host company, @BankDirector and our @Fin_X_Tech platform, and search & follow #AOBA18 to see what is being shared with (and by) our attendees.

Look At Who Is Attending Acquire or Be Acquired

In just 20 days, we raise the lights on our 23rd annual Acquire or Be Acquired Conference.  This is Bank Director’s biggest event of the year, one primarily focused on banking’s “great game” — mergers and acquisitions.  My team has spent considerable time and energy developing a spectacular event focused on growth-related topics that range from exploring a merger to preparing for an acquisition; growing loans to capturing efficiencies; managing capital to partnering with fintech companies.  To see the full agenda, click here.

Widely regarded as one of the banking industry’s premier events, we have more than 1,000 people registered to attend AOBA later this month — an all-time high.  We couldn’t do this alone, and over the course of these 2 ½ days, executives from many of our industry’s leading professional services firms and product companies share their perspectives on “what’s now” and “what’s next.”  I invite you to take a look at all of the corporate sponsors joining us:

aoba-sponsors-listed-001

aoba-sponsors-listed-002aoba-sponsors-listed-003aoba-sponsors-listed-004aoba-sponsors-listed-005
As I shared in a recent post, bank executives and their boards face some major issues without clear answers.  Before heading out west, I’ll share more about the banks (and 660+ bankers) joining us at the JW Marriott Phoenix Desert Ridge Resort & Spa.  Until then, I invite you to learn more about the companies supporting this conference by hopping over to bankdirector.com. To follow the conversations happening around this conference on Twitter, I’m @aldominick and we are using #AOBA17.

Bank Director’s new Tech Issue

Earlier this week, we published the December issue of Bank Director Magazine, our annual Tech Issue.  Stories range from the changing nature of mobile banking to institutions moving into the cloud to a venture capitalist’s perspective on the future of banking.  I invite you to take a look.

Since starting this blog in 2012, I’ve shared my optimism that the intersection of technological innovation with strong depository franchises may lead to more efficient banking processes, reductions in fraud and a win/win/win for banks, FinTechs and consumers.  So as I read through this current digital issue, a few key takeaways:

  • When San Francisco-based Bank of the West, an $80.7 billion asset subsidiary of BNP Paribas Group, analyzed last year the bottom line impact of customers who are engaged in online banking and mobile banking, it found some surprising results. Digital customers, or those who were active online or on their mobile phones during the previous 90 days, had lower attrition rates than nondigital customers, and they contributed higher levels of revenue and products sold, said Jamie Armistead, head of digital channels at Bank of the West.
  • Automating the small-business lending process requires some deep thinking from boards and management about how much faith they’re willing to place in technology, and their ability to embrace the cultural change implicit in basing lending decisions more on data than judgment. “The marketplace is demanding quicker decisions through technology,” says Pierre Naude, CEO of nCino, a maker of bank operating systems. Bank customers, he says, are clamoring for special products and specialized coding that enable greater automation of the small-business lending process. “Bankers are waking up to the fact that speed and convenience will trump price. You can lose a customer to an alternative lender if you don’t have it.”
  • As our Editor, Naomi Snyder, shares in her welcoming letter, banks tend to have the usual board committees (think audit, compensation and risk).  But we know that few have a board-level technology committee.  So I wonder if 2017 is the year that more institutions decide to create such a group to become better informed and better prepared as the digitization of the banking industry continues?

Concomitant to this issue’s release, Chris Skinner shared his perspectives on the state of FinTech our FinXTech platform.  In his words, “it is apparent that the fintech industry has become mainstream just as fintech investing cools. What I mean by this is that fintech has matured in the last five years, going from something that was embryonic and disruptive to something that is now mainstream and real. You only have to look at firms like Venmo and Stripe to see the change. Or you only have to consider the fact that regulators are now fully awake to the change and have deployed sandboxes and innovation programs. Or that banks are actively discussing their fintech innovation and investment programs… Fintech and innovation is here to stay.”

Clearly, the pace of change in the banking space continues to accelerate.  Accordingly, I encourage you to check out what we’re doing with both Bank Director and FinXTech to help companies who view banks as potentially valuable channels or distribution partners, banks looking to grow and/or innovate with tech companies’ help and support; and institutional investors, venture capitalists, state & federal regulators, government officials and academicians helping to shape the future of banking.

A Bank’s Future Is _____

Today’s pop quiz

A bank’s future is:

(a)  Bright

(b) Non-existent

(c) Technology-dependent

(d) Unclear

By deliberating before answering this question (and subsequently leaving a reply below), you will better understand how + why my team at Bank Director developed the agenda for our Growing the Bank Conference.

Next Monday and Tuesday, at the Four Seasons Resort and Club Las Colinas in Dallas, we are excited to welcome 230+ executives from traditional and emerging financial services companies to explore:

  • The power of partnerships between banks and fintechs;
  • How to embrace change; and
  • Intelligently experimenting with emerging tools and products.

As I wrote in 3 Quick Takeaways from #fintech16 (aka Bank Director’s FinTech Day at Nasdaq’s MarketSite), many technology companies have developed strategies, practices and new technologies that will dramatically influence how banking gets done in the future.  For example:

  • Nymbus is transforming the way traditional banks and financial institutions support and interact with their customers through its core processing solution;
  • nCino is a leader in cloud banking with a dynamic bank operating system; and
  • Geezeo offers an integrated suite of online tools and services; notably, a sleek Personal Financial Management (PFM) solution.

However, within this period of upheaval — where considerable market share will be up for grabs — ambitious banks can leapfrog both traditional and new rivals.  So if you are joining us, be advised that this is not a place to sit quietly and be told what’s not working in banking. This two-day exchange of ideas allowed for candid conversations and presentations banking leaders from around the United States eager to address challenging issues and emerging opportunities.  If you are interested in following the conversation via Twitter, @bankdirector uses #BDGrow16.  In addition, we will share various takeaways via LinkedIn and I’ll be posting regularly to this site.

P.S. – I’ll read the best answer to today’s question to open the conference, so don’t be shy in sharing your answer below.

 

The Convergence of Bob Dylan and Banking

Some of the most visible innovations in the banking world today are platform-based, data intensive and capital light.  Personally, I’m just as encouraged by “incumbent” institutions supporting new fintech entrants — with infrastructure and access to services — as I am creative new companies (like Nymbus, nCino, etc.) providing smaller and mid-sized banks with sophisticated new capabilities.

This video, filmed during Bank Director’s annual FinTech Day in New York City at the Nasdaq Marketsite, is but one of eight videos we’ve shared on BankDirector.com.  To see what industry leaders from Silicon Valley Bank, the Fintech Collective, BizEquity, DaonDeloitte Consulting and the World Bank’s IFC think are the challenges & opportunities facing traditional banks, I invite you to take a look at this compilation of videos FinTech Day Recap: Rapid Transformation Through Collaboration.

##

Al Dominick is the President & CEO of Bank Director, a privately held media & publishing company designed around strategically important business issues that a CEO, executive and/or board member(s) need to know — and be prepared to address. An information resource to the financial community since 1991, we publish Bank Director magazine, host conferences like “Acquire or Be Acquired,” conduct board-level research, provide board education & training programs, run BankDirector.com… and recently launched FinXTech.

5 Fintechs I’m Keen On

My first post in 2015 focused on three “up & coming” fintech companies: Wealthfront (an automated investment service), Kabbage (an online business loan provider) and Dwolla (a major player in real-time payment processing).  Since writing that piece, I’ve kept tabs on their successes while learning about other interesting and compelling businesses in the financial community.  So today, five more that I am keen on.

By Al Dominick // @aldominick

With continuous pressure to innovate, I’m not surprised to see traditional financial institutions learning from new challengers, adapting their offerings and identifying opportunities to collaborate with emerging players.  From tokenization to integrated payments, security tools to alternative lending platforms, the investments (and efforts) being made throughout the financial sector continues to impress and amaze me.  As I shared in 15 Banks and Fintechs Doing it Right, there are very real and immediate opportunities to expand what banking means to individual and business customers.  Personally, I am excited by the work being done by quite a few companies and what follows are five businesses I’ve learned more about while recently traveling between D.C., San Francisco and New York City:

logo

i2c, a global card processing company, provides back-end processing and settlement for cards, virtual accounts and mobile payments.  What’s interesting about them? According to a brief shared by Bridge by Deloitte (a web platform connecting enterprises with startups to accelerate innovation and growth), i2c recently teamed up with Oxfam, Visa and Philippines-based UnionBank to channel funds to people in disaster-affected communities through prepaid cards.

adyen-logo

With Money20/20 fast approaching, expect to see a lot of #payments trending on twitter.  Trending in terms of financial investment: Adyen, a company receiving a lot of attention for wrapping up a huge round of funding that values the payment service provider at $2.3B.  Adyen, which provides its services to a number of large organizations including Facebook and Netflix, excels in having a highly integrated platform, unlike others with multiple platforms.

Blend labs

When it comes to technology “powering the new wave of mortgage lending,” take a look at the work being done at BlendLabs.  Developing software & data applications for mortgage lenders, the company acknowledges that “accommodating complex rules and regulation changes is time-consuming and costly.” For this reason, the company has quietly rolled out technology that empowers some of the country’s largest lenders to originate mortgages more efficiently and compliantly than ever before while offering their borrowers a more compelling user experience.

logo

As the head of a company, I know first-hand how much time and effort is spent on efforts and ideas designed to maximize revenue and profits.  So the promise and premise of nCino is hugely attractive.  Co-founded by a fellow W&L grad (and the former CEO of S1) nCino is the leader in cloud banking.  With banks like Enterprise in St. Louis (lead by a CEO that I have huge respect for) as customers, take a look at their Bank Operating System, a comprehensive, fully-integrated banking management system that was created by bankers for bankers that sits alongside a bank’s core operating system.

logo

While not solely focused on the financial industry, Narrative Science is a leader in advanced natural language generation.  Serving customers in a number of industries, including marketing services, education, financial services and government, their relationship with USAA and MasterCard caught my eye.  As FinXTech’s Chief Visionary Officer recently shared with me, the Chicago-based enterprise software company created artificial intelligence that mines data for important information and transforms it into language for written reports.

##

In addition to these U.S.-based companies, you might look at how Fidor, a digital bank in Europe that offers all-electronic consumer banking services, links interest rates to Facebook likes and give cash rewards based on customers’ level of interaction with the bank (e.g. how many customer financial questions answered).  Clearly, the fabric of the financial industry continues to evolve as new technology players emerge, institutions like Fidor expand their footprint and traditional participants transform their business models.  So if you follow me on twitter (@aldominick), let me know of other fintech companies you’re impressed by these days.