Trailblazer: NBKC’s fintech accelerator

Zach Anderson Pettet, NBKC Bank. Photos: Steve Puppe

No slouch itself when it comes to technology, NBKC Bank is moving the needle through its fintech accelerator, Fountain City Fintech.

By Ed Avis

Name: NBKC Bank
Assets: $662 million
Location: Kansas City, Mo.
nbkc.com


When customers encounter NBKC Bank—whether it’s by walking into one of its four locations or by visiting nbkc.com—they immediately realize that the $662 million-asset community bank believes in technology.

Customers of the Kansas City, Mo., bank can do business on interactive teller machines (ITMs) with video links to live tellers, or they can use their smartphones to deposit checks remotely. They can pay their bills and set up recurring payments online with NBKC’s Bill Pay, and then access those services with Apple Touch ID or Android’s fingerprint API. And if they’re online and need help, “live chat” is a click away.

In short, practically every cutting-edge fintech feature available at the largest banks can also be found at NBKC.

“Our CEO [Brian Unruh] says we are a tech company, not just a bank,” explains Zach Anderson Pettet, NBKC’s fintech strategist.

Now NBKC has taken its commitment to technology up a level—and perhaps advanced the fintech industry as a whole. In October, the community bank launched a 75-day “fintech accelerator” designed to help six startup banking technology companies improve and test their technology in a real bank setting.

“We’re bringing these six companies to Kansas City and trying to develop six mutually beneficial relationships in 75 days,” Pettet says.

The idea for the accelerator, called Fountain City Fintech, emerged through the community bank’s conversations with fintech executives, who complained about the snail-like pace of most bank partnerships.

As a community bank … our size is an advantage, since our culture is nimble and we can move faster than anyone else.”
—Zach Anderson Pettet, NBKC Bank

“We figured out that the migraine problem with fintech startups is the speed of the bank partner they work with,” Pettet explains. “The average partnership took six months, and we heard horror stories of them taking up to 18 months. We realized that, as a community bank, maybe our size is an advantage, since our culture is nimble and we can move faster than anyone else.”

Three-pronged strategy

Pettet says the Fountain City Fintech accelerator was designed to help startups in three ways: by providing convenient access to a genuinely tech-savvy bank; by guiding the startups through compliance issues; and by helping them develop a strong culture.

The access part of the partnership is obvious: NBKC devoted 5,000 square feet of the third floor of its headquarters in Kansas City to the accelerator. Whenever one of the entrepreneurs wonders how a new idea or development will work in an actual bank, he or she can just walk down the hall and talk to a live bank employee.

Quick stat

$50,000

The minimum amount NBKC’s parent company invested in six fintech startups

The compliance element of the partnership is also essential. “We saw the need in the space for increased compliance advice,” Pettet says. “So we brought our compliance department and lawyers to bear. We analyze the whole situation and make sure, if they are a money transmitter, that they have the licenses they need, and if they’re not, that they have a letter explaining that. We’re making sure every piece of that is tied up in a pretty bow.”

Regarding culture, Pettet says it’s important for fintech entrepreneurs to take the time to consider how they make decisions, why they are doing what they’re doing and other such less-tangible concerns. “We’re running an internal program to help the entrepreneurs identify their values,” he says.

NBKC began soliciting applications from fintech startups in July and received applications from companies in 30 U.S. cities and 12 other countries. It narrowed the list to 10 in late August and picked the six winners in early September. Each was given $5,000 to help pay for living expenses in Kansas City.

The bank’s holding company, Ameri-National Corporation, also invested a minimum of $50,000 in the six startups.

The partnerships will ultimately help NBKC remain a cutting-edge community bank, but Pettet says the companies in the program are free to develop the technology they see as most suitable—not necessarily what NBKC needs for itself. The community bank may, or may not, end up using the technology the fintechs develop.

“We’re investing in these companies and building partnerships with them,” Pettet says. “We want them to be in a good spot and ready to go and grow like crazy.”

Pettet (left) works closely on Fountain City Fintech with program manager Megan Darnell.

Fintech initiatives at ICBA

More than three decades ago, ICBA identified the need to help its members develop bank card programs and launched a partnership with FIS to make that happen. Today, about 1,600 ICBA member banks use the ICBA Bancard platform, and the relationship between ICBA and FIS has flourished.

“They have always been a preferred partner when it comes to bank cards,” says Tina Giorgio, president and CEO of ICBA Bancard. “And now we are working together on some other things in the digital space. We are looking at more solutions that are easy to stand up and affordable, and put community banks in a position to be on the cutting edge.”

A recent result of the ICBA/FIS partnership is Goodcoin. This is a charitable giving platform that allows ICBA member banks to establish programs that customers can use to easily make one-time or recurring donations to charities.

Goodcoin was launched in March 2018. Three ICBA member banks are currently using it, and about three dozen others are moving toward implementation, according to Giorgio.

“Community banks are well known for supporting local charities, and this gives them the ability to conveniently partner with them,” she says.

The Goodcoin program embodies the spirit of the ICBA/FIS partnership, says Kevin Tweddle, ICBA group executive vice president of innovation and financial technology.

“That’s a good example of a success story of how FIS and ICBA worked together and identified an early-stage fintech that is doing something for community banks,” Tweddle says.


Ed Avis is a freelance writer in Illinois.

Top