Paths to Alternative Banking

Eric Garretson, CFO and Fintech Strategy Leader, NBKC Bank and Zach Anderson Pettet, Managing Director Fountain City Fintech, NBKC Bank
Eric Garretson, CFO and Fintech Strategy Leader, NBKC Bank

Eric Garretson, CFO and Fintech Strategy Leader, NBKC Bank

As the fintech space is heating up in the tech industry, what are the biggest challenges at present that the companies are struggling with?

Fintech has always been represented as the greatest evolution of financial services as it provides technology-driven products and solutions in the current market, remodeling the traditional banking industry. The biggest challenge that the fintech companies experience in the industry is dealing with banks and their regulations. They have been innovative for the longest time and have always been open to partnerships and agreements with the fintech companies. For the single reason that the size of the entities is giant, the process is more time-consuming than the usual. Our bank approaches the founders of these companies, works on the pain points, which at the minimum takes 18-24 months to strike up a partnership with these establishments. In such scenarios, start-up companies, which are already struggling to raise money, often, witness their business slipping out of their hands. What happens in such a situation is that big banks have slower processes. However, community banks like ours have quick and speedy means; they work collectively with the founders of the companies to upgrade their partnerships. Our turnaround time which includes the negotiation of contract, publication, Proof of Concept (POC), and other similar things takes a very short time, approximately 60 to 90 days, overcoming time constraints.

  The biggest task of an organization will always be to focus less on the programming languages and more on the culture inside it 

How is fintech reshaping the industry of financial services? Can you please elaborate on the current trends in the fintech space today so that the business thrives in the industry?

Macro-level planning in the market is witnessing a progressive move with the innovative idea of firms offering debit cards to the firms. Banks under the Durbin Amendment limit of $10 billion have got an interesting dynamic of interchangeability that makes it even more significant to revenue outcomes. The companies that work with community banks like ours provide debit cards, and that becomes a reason for substantial revenue opportunities owing to the amount of interchange that occurs between these banks.Zach Anderson Pettet, Managing Director Fountain City Fintech, NBKC Bank

The debit card also offers an opportunity for the people to save and not depend on the payday loan borrowers. Even on the lending side of the banking system, micro-loans are becoming very popular; where a consumer can either take from their savings or get a small amount of dollars on loan to make it to their payday.

Observing the current trends and challenges in the market, what do you think is the primary task of the C-level executives at this point of time?

C-level executives have a lot more responsibility than just the idea of building partnerships. Expanding business is not just about signing up newsletters; instead, it is more about what kind of mental models they develop for a collective understanding of the market. The biggest task of an organization will always be to focus less on the programming languages and more on the culture inside it. Our company has observed different fintech companies which were in partnership with groups but could not deliver suitable results; such scenarios leave much of an impact on the end-user. For this reason, an organization’s end-product depends on the excellent user interface, but what matters is to have a great back office to enhance the partnerships with another bank. A company might be in possession with the greatest technology worldwide, but if it cannot deliver the best services or manage money movement, it does not really matter how great the user interface is.

Could you elaborate on your approach to identifying the right partnership and solution providers for your organization?

Our organization has a different kind of notion when it comes to dealing with our partnerships. Unlike the way big companies and its founders approach a solution, our partners benefit equally on the fintech side. Our organization believes that C-level executives, entrepreneurs, founders, or any other executive group should create a company culture for high-performance of their workforce and ensure that subsequently both the company and the partners benefit mutually. Another aspect that should be stressed upon is vendor-customer relationships. While finding the appropriate solution providers, we often get trapped in situations where a lot of companies are deceptive. Since our firm indulges in calls and demonstrations to the companies that sell B2B products, it becomes a struggle for us to engage in such kind of duplicate services. Another significant factor is to ensure that the association and the technologies which a firm deals with should aim to fit in the context of strategic business units. Our organization has evolved to this extent with an important observation at the balance sheet and business as a fintech partnership strategy. Most importantly, it depends on how we grow our balance sheets, does more interviews, expands the business, and await positive results.

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