Name: ICBA at FinovateSpring 2023 – How community banks can compete in a digital world
Uploaded: 2023-06-08T11:51:43.214Z
Duration: 583.58

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This is FinTech Futures at

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Finovate Spring, and I'm joined by

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Charles Potts of the Independent

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Community, banks of America.

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Charles, how are you?

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I'm good, thank you, Paula.

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Excellent.

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How are you enjoying

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the conference so far?

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This has been a good conference.

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I I appreciate what what

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Finovate has has become.

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I've been keenly involved since its

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origins and and I really really appreciate

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the opportunity to come here and share

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some of the things that we're doing

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from the community banker's perspective.

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Excellent.

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Excellent.

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So let me just get started there.

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Let's give a quick introduction to

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yourself and your role at ICBA yeah.

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So I'm the Chief Innovation Officer at I C

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B A and it's a role we created just a few

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years ago to really help foster and lead

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a key part of our mission and that mission

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is to create and promote an environment

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where community banks flourish.

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And part of that is making sure

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that our community banks around this

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country have access to the types of

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solutions and innovation and technology.

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On par with the biggest banks on the

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planet that give them the ability to serve

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their community and their customers in

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a way that we, all have come to expect

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in this kind of evolving digital world.

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Sure, And you're here speaking on the

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panel then about how community banks and

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credit unions can, compete in the digital

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world, as you just mentioned there.

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Given smaller budgets of these firms,

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how would you say they should be

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approaching their, digital strategy then?

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That's a great question.

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So there's, really three parts to that.

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And you take the kind of build buyer

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partner view first and, so to a large

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extent the community banks and it's

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part of what we do through our ThinkTech

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accelerator have to expose themselves to a

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whole new level of solution providers that

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here to four, they, they just didn't know

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that exist or they were they, were really

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shunted towards some of the traditional.

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Core vendors.

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And so that exposure to these types

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of companies that are here at Finovate

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as well, is really that first step.

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And then the second step really

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is, understanding what the bank's

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strategy is and and, figuring out

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what problems they're trying to solve.

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And that's a keen focus of the way we

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approach this is making sure this isn't

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just some kind of shiny object pursuit and

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it's more driven by real tangible issues

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that the banks are trying to address.

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And then the third part is making

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sure that those collaborations, those

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companies are are really geared to do

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business the way community banks do.

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And that is that is an important part.

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But it's it's important to note that

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with the technology evolution we've

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seen in the last 10 years our, banks

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do have cost effective and affordable

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solutions that meet their budgetary

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requirements and can give them the

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types of capabilities they need to

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be competitive and address what their

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customers and communities are looking for.

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And given the rate of technological

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change at the moment faster than

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it ever has been before, yes.

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How difficult is it for

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community banks and people?

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That's that's probably the first

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step in this journey for not just

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community bankers, but really

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lots of different industries.

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And that is recognizing that the,

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lean approach, the agile approach that

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the technology companies take is also

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important for a lot of our banks to

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understand that, that they need to think

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in shorter duration, faster cycles.

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Move a little bit quicker

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the fast fail methodology.

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And that is something that not

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that sometimes is unsurprisingly,

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that they actually showed

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themselves during the P crisis.

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During that time they went fast,

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they were able to do this, they

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were able to make those changes.

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So, embracing that as really a,

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new way of approaching innovation

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is a key aspect of this.

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No longer do banks need to think about

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these 18 month long, big engagements

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and long, clumsy project cycles.

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They need to think in smaller

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bites and smaller iterations that

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that can take advantage of again,

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the technology that's built.

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To be delivered that way.

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Excellent, And so what are some

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of the kind of like most exciting

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tech developments in the space

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that you are noticing the moment?

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Yeah.

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So right now we're with, this new

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evolution of our accelerator program, as

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we brought it in-house and, standing it

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up in Atlanta, Georgia we're getting very.

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Much more aligned with

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topical current issues.

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And right now it's all about deposits

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and it's all about faster payments.

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So I'm pretty excited to see a lot

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of the new solutions that can really

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help our banks address the needs to

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not only retain key deposits, but

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help them acquire and secure more

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deposits in a more cost effective way.

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And then obviously the faster

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payments movement fed now

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coming at us real time payments.

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Provides a great opportunity for our

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banks to to again, take advantage of this

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evolving landscape and do it in a way that

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really addresses being cost effective,

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being efficient and and focusing on the

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right way to serve their customers in

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that high-tech and high-touch manner

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that is unique to community banks.

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Excellent, excellent.

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You mentioned the

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accelerator program there.

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Can you tell us a little bit

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more about that then some?

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Yeah.

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We, started a little over four years

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ago with this notion that we needed

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to find solution providers, early

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stage companies who could be groomed

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and molded and coached and mentored

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to do business the way community

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banks need them to do business.

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And so we thought about doing that.

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We built this once a year program we've

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had a great deal of success with it.

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Helped bring some 41 companies through

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the process and at the end of last year,

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we made the decision to really house it

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ourselves and run it year round so that

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we can run multiple programs, we can run

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a little bit faster with smaller cohorts

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and we can get really granular on water.

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The important issues like deposits

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and faster payments right now.

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And here we are, we're about halfway

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through this first version of our

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new ThinkTech Accelerator program.

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And and we're already seeing

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resounding success, lots of

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accolades from our bankers and the

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fintechs that we're working with.

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And we believe this model is is very

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important for us to, again, back to

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your earlier question, be able to

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adapt to a very fast paced technology.

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Evolution that's happening around us.

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Excellent, And loyalty and customer

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service are often titled as the

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big things when it comes to credit

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unions and community banks and stuff.

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What else do you think keeps people

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coming back to these small institutions?

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The, relationship is everything.

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Yeah.

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The the fact that community banks

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are doing almost two thirds of

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all small business loans, 80%

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of agricultural loans reinforces

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that they have a very important.

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Role in the communities they serve.

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And those, bonds have to be protected

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even as the banks evolve their technology.

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So, the banks have to be very intentional

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and thoughtful that they're not just

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pursuing technology for technology's sake,

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but that it fits the strategic goals and

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objectives of serving their customers

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the way they need to be served, giving

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them the convenience that the technology

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affords them, but at the same time,

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making sure that the banker and that.

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Relationship is tightly

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coupled to those solutions.

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Last thing the community bank wants

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to do is really disintermediate the

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relationship by driving a customer

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down a very monolithic digital channel

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and not giving them access to the

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important people skills that are

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part of nurturing that relationship.

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Excellent, excellent.

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It's been a bit of a tough start to the

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year in the US banking scene generally.

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Yeah.

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How has like the collapses of these

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banks impacted the community banking

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space and, how important is it to,

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protect community banking as a whole?

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I'll take the second part first.

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The, fact is if you look at small business

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America and you look at what happened

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during P and what's happened over the

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last couple of months, what you recognize

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is the diverse nature of our community

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banks is key to our economic engine

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here in the us Small business America

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is where jobs are created and community

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banks are helping fuel that growth.

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Secondly the community banks rose to

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the occasion as they always do, and

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highlighted the really good work and the

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differentiation between community banks

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and those two big DFA banks who really

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were at the center of the challenges

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we've seen over the last couple of months.

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Also what has been real interesting

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is is if you think about some of the

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fallout from, some of those challenges,

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A lot of small businesses recognized

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that they needed to be doing business

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with a banker, not just a bank.

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So our community banks were, there to

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rise to the occasion to make sure that

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a lot of the small businesses, a lot

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of those entrepreneurs who were worried

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about making payroll that infamous

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weekend had a community bank relationship

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and had somebody they could lean on.

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Had that that business card and that

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phone number of the CEO of the bank

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that they could call on when they needed

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needed help for their small businesses.

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And, I think this has been once again

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a manifest of how important community

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banks are to small business America

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and the economic engine that drives

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communities all over this country.

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Excellent.

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Thank you so much for taking the

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time out to speak with me, Charles.

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It's been a pleasure.

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I appreciate it and I appreciate

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the opportunity to catch up as well.

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Thank you.

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Cheer.

origins and and I really really appreciate

So I'm the Chief Innovation Officer at I C

B A and it's a role we created just a few

a key part of our mission and that mission

planet that give them the ability to serve

credit unions can, compete in the digital

approaching their, digital strategy then?

accelerator have to expose themselves to a

whole new level of solution providers that

here to four, they, they just didn't know

that exist or they were they, were really

just some kind of shiny object pursuit and

customers and communities are looking for.

FinTech Futures

Expert Insight

At the FinovateSpring 2023 conference in San Francisco, FinTech Futures caught up with Charles Potts, EVP and CIO at Independent Community Bankers of America (ICBA), to discuss how community banks and credit unions in the US can adapt and compete amid the rapid rate of digitalisation and the best ways to approach their digital strategies to ensure their offerings are up to date and can effectively meet quickly shifting customer expectations.

Digital

Banking

Digital Transformation