By Marlee Ribnick
Digital growth is an essential consideration for banks looking to scale in today’s marketplace. Executives must consider the range of solutions to determine whether a fintech partnership is the right step, how to choose the right one and how to find ways to successfully implement these complex technologies.
Three community bank executives, each representing a different core technology, discussed these matters at ABA’s 2024 Annual Convention in New York City. The conversation was moderated by Nancy Schneier, founder and chief revenue officer at Vikar Technologies.
When considering a new core or fintech partnership, the first question Matthew Hein asks is, “What can we absorb?” Then, the EVP and chief banking officer of Firstrust Bank considers whether it’s the right time to be partnering at all.
A major decision-making factor is flexibility — how important is it to take something out of the box to launch immediately versus the ability to customize a platform to a bank’s needs.
Part of the research process involves asking vendors many questions. Christopher Richards, first EVP and chief banking services officer at Cape Cod Five Cents Savings Bank, stresses that, while a vendor might have experience in other areas, it might not have the specific experience you need for your undertaking. Some banks can take that risk — others might not be in the same position.
Steve Schieffelin, SVP and head of the IT business relationship management group at Dime Community Bank, says business partners drive all decisions. When considering new tech, if all things are equal, he’d prefer to remain in the Fiserv ecosystem. If there are significant differences, he’d look around and then narrow options down.
All panelists noted that speed to market is a must, but cost is the bottom line.
Once a bank has identified a digital solution, the next step is buy-in. Schieffelin notes the importance of early involvement with an executive-level sponsor — it’s vital to determine business requirements and get the genuine backing of everyone at the bank. “I don’t want emails, I want signatures in blood,” joked Schieffelin, who is also a member of ABA’s Core Platforms Committee.
Hein says that successful implementation is about adoption — setting ROI aside to set reasonable success goals. “You need to start somewhere,” said Hein, and there are going to be “‘aha’ moments when we get there.” Engage your team up front, get momentum and quick wins early in the process. Of course, that’s an internal strategy. For customers, Hein says, “You just have to get it right.”
When considering new tech, if all things are equal, he’d prefer to remain in the Fiserv ecosystem. If there are significant differences, he’d look around and then narrow options down.
Friends and family are necessary sounding boards, according to Schieffelin. He recommends delaying a public launch for two weeks to do a trial with friends and family who will give honest feedback.
One example of a successful digital implementation came from Schieffelin. He spoke about his bank’s recent effort to launch digital online account opening. It partnered with Terafina — a fully Fiserv-integrated solution that was validated in advance and provided a surprisingly simple API-driven integration.
Firstrust Bank, looking for loan origination flexibility, engaged with Schneier and her team at Vikar Technologies. Hein attributes success in this partnership to Vikar’s attentiveness, and the feeling that they were in it together. Vikar had already proven it was able to link into Firstrust’s core, which laid a foundation of ease and trust.
Last April, Richards’ bank went through a merger. It maneuvered its core search with a “project management mindset” — that is, it kept stakeholders informed every step of the way. This aided in continual buy-in.
The panelists discussed whether it’s best practice to partner with a core with packages or go with a fintech. Schieffelin says it’s all about building a relationship with trust and transparency. He does look to the core first, but, he adds, “the core can’t be all things to all people.” It is common to find a core that has a solution, but not the right solution for your bank.
How does a bank find fintech partners? Schieffelin recommends starting with existing business partners, and using the resources made available by the American Bankers Association.
“Banks should talk amongst themselves peer to peer,” Schneier added from the moderator’s seat.
TOOLKIT >> Connect with fellow bank innovation and IT professionals in the ABA Tech and Core Platforms Exchange, a members-only place to ask questions and share insights. Join at aba.com/communities.
