Independent Banker’s most innovative banks of 2019

Photo: David Arky

These five community banks are all making bold changes in different ways. They’re finding their own forms of pushing the envelope, whether it’s leading the charge in a new line of business or developing high-tech solutions that will benefit the entire community banking industry. What unites them is a willingness to think outside of the box. Based on nominations, here are five community banks that we think are leading the pack when it comes to innovation.


Customer Care

River Valley Bank in Wausau, Wis.
Assets: $1.4 billion

How a community bank becomes IncredibleBank

River Valley Bank launched its own online community bank, which it dubbed IncredibleBank, in 2009.

Q: What happens when a rural community bank’s online branding experiment delivers proof of concept? A: Something incredible.

That’s the case at $1.4 billion-asset River Valley Bank in Wausau, Wis., soon to be known as IncredibleBank. IncredibleBank launched in 2009 as River Valley’s online community bank, focusing on niche lending and SBA loans on top of traditional community bank products.

“What started as an innovative test product for different mobile services and products ended up being our surviving brand and is now flourishing,” says Todd Nagel, River Valley Bank’s president and CEO.

Tired of being mistaken for other companies, a credit union included, that had River Valley in their names, the bank sought out a distinctive identity that wasn’t already trademarked. The bank trademarked the IncredibleBank name 12 years ago, drawing inspiration from a former CEO who would dress up as IncrediBanker—who bore a strong resemblance to Mr. Incredible from the Pixar film The Incredibles—and say, “Have an incredible day,” on phone calls and in emails.

“We were really surprised at how well the name stuck with people,” says Nagel, noting how hard it is to find an untrademarked name. “But that means we had to commit to delivering customer service faster and better than what customers were expecting.”

Defining ‘incredible’

Nagel attributes much of the bank’s success to its trademarked Incredible Customer Experience and its playbook, now on version 3.0. It includes returning every call by the end of the day, even if it’s 8 p.m. When new customers are onboarded, staff reach out to ask if they have any questions, if they’d like a follow-up appointment and whether they prefer to be texted, called, emailed or just left alone. “We were surprised by how many people would say ‘Yes, I’d like to talk about it’ and then call within a week,” Nagel says.

Incredible banking means never having to talk to a robot when calling the bank, Nagel says. A live person answers the bank’s phone 18 hours a day on weekdays (7 a.m. to 11 p.m.), and the bank is testing 24-hour coverage.

Bank leadership traveled to Oregon, Texas, Florida, New York and California to survey customers across the U.S. to better understand why they chose the bank, if they’d buy another product, if they’d recommend it and what else they want to see. “The fun thing we discovered was customers saying, ‘You were the first one to call me back’ or ‘This is the best banking experience I ever had,’” Nagel adds, attributing the feedback to the playbook.

River Valley Bank used what it learned to develop products that were easy to use and met customer needs. For example, many customers wanted a checking account to pay loans. “We were using IncredibleBank as a test marketing tool. That’s why we cherished feedback so much, since [its customer base] was spread across time zones and geographies,” Nagel says.

The IncredibleBank platform served as a test market for loan products and niches. When financing small-ticket items like cars and boats proved a crowded and unprofitable area, the community bank got creative. Having a motor coach enthusiast on staff led to success in luxury motor coach lending. A former Caterpillar employee who is now with the bank helped build out its bulldozer, dump truck and heavy equipment lending. The bank serves the private aviation niche and is testing out cement trucks and cranes. “Like a community bank, we build relationships with these vendors, dealers and manufacturers,” Nagel says. “We go to trade shows and help support them and provide financing for something they sell.”

“Like a community bank, we build relationships with these vendors, dealers and manufacturers.”
—Todd Nagel, River Valley Bank/IncredibleBank

Nagel says the bank’s big secret is differentiation. “We want to be memorable,” he says.

—Kelly Pike


Fintech Developer

Cross River Bank in Fort Lee, N.J.
Assets: $1.5 billion

Innovating like a fintech

Photo: Dan Bigelow

If there ever was a community bank that blurred the lines between a bank and a fintech, it’d be Cross River Bank.
The one-branch, $1.5 billion-asset community bank in Fort Lee, N.J., offers an array of services to technology companies via technology platforms and application programming interfaces (APIs).

“Since our inception, we’ve focused on where we can incorporate technology to improve efficiencies, synergies and access to banking services,” says Phil Goldfeder, Cross River’s senior vice president of public affairs. “Our chief technology officer was an early addition to the bank staff, and since then, we’ve worked to develop its technology in-house through which systems can process transaction-based payments via APIs.”

The state-chartered bank originates and services loans for 15 marketplace lending platforms, such as Marlette, loanDepot, Rocket Loans, Upstart and Affirm, using its proprietary technology Arix, which is driven by API connectivity.

But that’s not all: Cross River Bank offers payments solutions including Automated Clearing House (ACH), wire transfer, card disbursement and money transfer, all through APIs. For example, the community bank now has a partnership with Stripe, an online payment processor in San Francisco, that provides freelancers in the sharing economy—Lyft drivers, DoorDash delivery workers, etc.—access to their earnings whenever they need through push-to-card payments.

Cash disbursement solution

Another innovation: For 2019, Cross River Bank launched Mastercard Cash Pick-Up. The cash disbursement service allows banks and their disbursement partners to deliver cash quickly, securely and easily to any vetted consumer through enabled ATMs, without the use of a debit card.

And the bank isn’t done innovating. Cross River Bank recently began offering “banking-as-service,” also driven by APIs, that enables fintechs to plug in and access banking services and back-office functions in a way that meets regulatory compliance and consumer protection requirements.

“We’re a bank that’s learned the language of technology, so tech companies can keep innovating,” Goldfeder says. “We’re able to respond and provide banking services, whether that’s settlements, micro-deposits or access to savings account information for data aggregation.”

True to the community bank model

While Cross River Bank walks and talks like a fintech, Goldfeder emphasizes that it’s still very much a community bank. Even though it has just one branch, the bank is committed to servicing the needs of its local community, Goldfeder says.

“We do everything that a traditional community bank does. We do a significant amount of commercial real estate and SBA lending, we collect deposits and we offer cookies and coffee in our branch every day,” he says. “We just bring that hometown community bank feeling to fintech.”

“We just bring that hometown community bank feeling to fintech.”
—Phil Goldfeder, Cross River Bank

Goldfeder believes banks should continually look for ways to differentiate themselves through new solutions, whether these are developed in-house or through partnerships. “By taking strategic risks,” he says, “the fintech ecosystem is able to move the industry forward.”

—Katie Kuehner-Hebert


Leading Lender

First Federal Bank in Lake City, Fla.
Assets: $1.9 billion

Forging the way on cannabis banking

First Federal employees (left to right) chief risk officer Jim Moses, chief compliance officer Will Beardsley, president John Medina, BSA/AML compliance officer Cori Wells and BSA/AML specialty services program manager Jannon Forsythe visited a cannabis grower’s facility earlier this year.

Imagine getting a call from a well-established CPA desperate to find a new bank within a week. The catch? The CPA’s former financial institution was letting him go because he had a marijuana dispensary as a client.

John Medina, president of $1.9 billion-asset First Federal Bank in Lake City, Fla., doesn’t just get this call regularly. He’s found a way to safely bank the cannabis industry by leveraging new technology and the community bank’s existing compliance expertise.

First Federal created the Specialty Banking Division late in 2018 following the legalization of medical marijuana in Florida in November 2016. The bank spent months learning about the industry and developing solutions to bank it compliantly, hearing from customers directly involved in growing, holding or selling inventory in Florida. It also spoke to the CPAs, attorneys, venture capitalists, doctors and consultants who serve these companies nationwide.

External advice

First Federal knew that “seed-to-sell” customers needed large, stable and compliant financial institutions to provide banking services. Otherwise, they are forced into running cash businesses, increasing the risk of robbery and crime. Similarly, established professionals serving the industry regularly face disruption due to account closures. Medina knew his bank was in a good position to help.“We have historically banked MSBs [money service businesses]. We’re one of the few banks that have banked that high-risk population,” he says. “Looking at MRBs [marijuana-related businesses], it was really an extension of that.”

First Federal began by learning everything it could from legal counsel, experts and potential partners before becoming one of the only Florida institutions to bank the industry. Through months of collaboration and research from the bank’s compliance, risk management, operations, IT and senior management teams established new processes, developed new products and fee structures, and put compliance measures in place for 20 to 30 employees.

The right tech

The bank hired someone with extensive legal, compliance and banking experience in the cannabis industry to run the division. It also engaged in due diligence to find a technology partner. “There were really only a handful of tech platforms with the tools to monitor risk and help our customers,” Medina says.

The community bank settled on Hypur of Scottsdale, Ariz., a platform that tracks everything from account applications and document management to payments, transaction monitoring and reporting. First Federal’s other partners conduct extensive background checks, help with gap analysis and review policies and infrastructure. This not only aids the bank’s compliance team, which is responsible for huge amounts of data from tracking cash from seed to the point of sale, but also uncovers information about potential irregularities that can be passed on to clients. With many MRBs raising substantial funds, the bank must vet the capital-raising process and any individuals with a controlling interest.

“We need to understand where funds are coming from and where they are going,” Medina says. “There are just a lot of details that having a system that understands the risk associated with every transaction is very helpful.”

“When we go through exam cycles with regulatory agencies, we want to be the benchmark for doing it the right way.”
—John Medina, First Federal Bank

Three months in, First Federal Bank has about 100 cannabis industry customers and is beginning to see an increase in non-interest-bearing deposits and revenue from non-interest-free income from account analysis. “While we have good basis today, I can only imagine, two, three or five years from now, the innovation and technology infrastructure in place to do even more, better and faster,” Medina says. “When we go through exam cycles with regulatory agencies, we want to be the benchmark for doing it the right way.”

—Kelly Pike


Nonbranch Builder

Citizens Bank of Edmond in Edmond, Okla.
Assets: $300 million

Redefining the branch

When Citizens Bank of Edmond sold off all but one of its branches in 2013, president and CEO Jill Castilla swore the community bank would never have branches again.

That was before the $300 million-asset bank in Edmond, Okla., found itself connecting with millennial small-business owners in Oklahoma City’s Midtown neighborhood. Business owners were eager to move their business to the bank, but there was a problem. Many of the businesses were cash-heavy and needed easy access to currency outside of banking hours. “We heard stories of merchants going door to door to barter and exchange to get pennies, nickels, quarters,” Castilla says.

She didn’t want to turn away business, but she also didn’t want to open a new branch. And after research and brainstorming with the owner of a local coffee shop, Castilla couldn’t find a ready-made solution. So, Citizens Bank of Edmond modified an off-the-shelf interactive teller concept that Castilla designed to build on technology to create Midtown Bank, a 1,000-square-foot unmanned bank available 24 hours a day. Citizens Bank worked with vendors to design two pieces of technology: one that allows customers to deposit, withdraw and exchange bulk cash, and one that dispenses rolled coins.

Located across the street from the coffee shop, the self-service electronic banking facility provides currency counting, change orders and rolls, bulk change collection, free Wi-Fi and a meeting space available to customers. “We see about 250 transactions a week,” Castilla reports. “Within three months we had $15 million in loans, which paid for our five-year lease and equipment.”

Customers were originally required to sign a nondisclosure agreement to see and use the space. “We did not realize we were creating something unique,” Castilla says. “We were just trying to fill a need for customers.” The bank has a patent pending and is considering expanding the concept to other areas and licensing it to other community banks.

Lateral thinking

Citizens Bank’s previous innovations helped make Midtown Bank a reality in just a few months. It leveraged technology from Vault 405, a 30,000-square-foot coworking space for customers that Citizen Bank launched in March 2018. Available to business customers and nonprofits, Vault 405 offers 24/7 access to private offices, a podcasting studio and a collaborative workspace. The community bank was able to utilize its app to allow customer access to Vault 405 to ensure secure entry into Midtown Bank.

“I’m a big believer in turning weaknesses into strengths,” Castilla says. One of the branches the bank sold off became Vault 405 after Castilla paid inspirational visits to NerdWallet and various Google offices. “We had all this space, and through my travels, I organically came up with the idea for a coworking space for customers to support the entrepreneurial community in Oklahoma City.”

“I’m a big believer in turning weaknesses into strengths.”
—Jill Castilla, Citizens Bank of Edmond

Vault 405 was filled within six months and is now regularly used by 100 entrepreneurs and countless community groups. New customers make up 80% of its clients, bringing in $25,000 a month in new revenue. The cross-pollination of companies and ideas has already resulted in the launch of a new fintech company that could end up providing services to Citizens Bank.

Midtown Bank uses iPads to create an inclusive and engaging customer experience, Castilla says.

“What propelled me was engaging with other banks that have those same intentions and drawing inspiration and courage from their success,” she says. “It’s not replicating or copying what someone else is doing but using the success of what peers are endeavoring to do to help me see what’s missing from my market and elevate what I’m expecting of myself and my bank.”


Kelly Pike is a writer in Virginia.


New Tech

Nicolet National Bank in Green Bay, Wis.
Assets: $3 billion

Investing in customer-centric innovation

President and CEO Mike Daniels and executive vice president Eric Witczak are in the midst of innovating Nicolet National Bank’s customer experience.

Designing products and services that put customer needs first is a community bank imperative. But many community bankers feel like they’re dependent on their core processor to provide them with digital banking services and other new technologies, only to hear from customers that they’re looking for even more.

Such was the feedback that Mike Daniels, president and CEO of the $3 billion-asset Nicolet National Bank in Green Bay, Wis., got about the community bank’s mobile app, which was provided by its core processor.

“We’ve always been a very progressive organization, but when we listened to people talk about what the big banks are doing, we realized that while we don’t need to be bleeding-edge, we do need to be better than just a follow-along community bank,” Daniels says.

Nicolet’s management decided it could do better by promoting Ryan Eardley, a tech-smart intern and recent college graduate, to a new position: director of innovation. They paired him with Seth Ollila, a banking technology expert who led the project management area and furnished Eardley with a cross-functional team and a mission to find ways to develop even better products and services, so the bank didn’t have to rely on its core processor.

“I told the innovation team to start from the customer experience and work backward,” Daniels says.

Customer needs come first

Typically, innovation at community banks is driven by the IT or operations departments, but the new products and services they develop tend to serve their departments’ needs more than those of the customer, Daniels says.

“The product or service may be secure, but the customer has to sign on five times, or it may be designed to make it easier for the operations team to process, but it’s too cumbersome for customers,” he explains. “I want products and services designed to meet customer needs first.”

Early on, the new innovation team found a vendor that could provide a better mobile banking app: Alkami Technology in Plano, Texas. Daniels says he believes the company’s app is superior to that of the bank’s core processor, and its flexibility allows the community bank to build in additional functionality.

The innovation team is doing just that by turning the bank’s Salesforce solution into much more than a customer relationship management (CRM) tool, says Eric Witczak, Nicolet National Bank’s executive vice president.

“We made the decision to utilize Salesforce as a CRM, but then we realized we could do a whole lot more with it and not completely rely on our core,” he adds. “Through the use of open APIs [application platform interfaces], we’re able to specialize the platform and put the customer first in everything we do.”

One step at a time

Phase one was developing and acquiring open APIs that enabled the community bank to buy solutions like Salesforce that can get into the core, Witczak says. Phase two is beta testing new digital banking applications, and then implementing a “financial services cloud” that will enable customers to apply for and open multiple types of accounts via the mobile app, such as deposit accounts, mortgages, credit cards—“you name it,” Daniels says.

“We then plan to personalize solutions for customers with a ‘marketing cloud,’” Witczak says. “In phase three, there will be additional artificial intelligence functionality built into the Salesforce.com platform, so that it can automatically detect when customers might need something and then automatically suggest solutions.”

Nicolet National Bank has partnered with other fintechs, such as ClickSWITCH in Minneapolis, which makes it easier for customers to switch financial institutions. The community bank offers TAP Lending through Blend, a loan software company in San Francisco that provides the technology that allows customers to upload documents needed to complete mortgage applications.

The community bank’s aim is to continue to be relevant and “not just accept what happens” to it, according to Daniels. Nicolet National Bank achieves this by engaging young professionals like Eardley who are spearheading innovation.

“If your customer base ages out with the bank, then you don’t have a franchise.”
—Mike Daniels, Nicolet National Bank

“He understands technology, but perhaps even more importantly, he understands what the younger generations want, which is critical to a bank’s survival,” Daniels says. “If your customer base ages out with the bank, then you don’t have a franchise.”

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Katie Kuehner-Hebert is a writer in California.

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