“The customer determines the value of the solution.”

Strategy
Jesse Honigberg

Cross River is no ordinary bank. Described by the New York Times as “the tiny bank that got pandemic aid to 100,000 small businesses,” Cross River partners with fintechs and other clients to empower consumers and reach underserved communities. We sat down with Jesse Honigberg, Cross River’s Technology Chief of Staff, to talk about inclusion, resilience, and Community Banking 2.0.

What sets Cross River apart? How is it different?

We’re here to solve difficult problems in compelling ways. Our goal is to rethink financial services—to create an enablement layer for getting underserved markets into the financial ecosystem. And the core of that is thinking about how financial services can provide an infrastructure that drives accessibility.

So what does financial inclusion mean to you? Why do you think it’s important?

Here at Cross River, we talk a lot about Community Banking 2.0. It’s no longer just about serving a certain physical geography. All of us exist in multiple cohorts, in multiple communities. And we all interact with our respective communities in a variety of ways. So how can we think about community in terms of enhancing people’s access to the wider financial market? And how can we enable an infrastructure that brings those communities together, building great experiences that cater specifically to the needs and pain points of each community—and then do that at scale?

During the pandemic, Cross River ultimately provided more than 480,000 loans to small businesses through the Paycheck Protection Program (PPP), making you the #2 PPP lender in the country. Going forward, what role do you see Cross River playing in helping businesses and communities thrive?

I think one of the most important things we can do is to make sure that different people from different backgrounds get fair access to financial services. We can’t just focus on the businesses or the individuals who might seem safe or comfortable in terms of the status quo. We need to think about how we can help every kind of business, the businesses of tomorrow, grow and thrive in a more just and equitable world.

So within that context, how do you see consumer expectations changing? And how does that drive the decisions you’re making at Cross River?

I think there are two divergent trends. One is the rapid embrace of digital. But at the same time, there’s a sizable contingent of the retail customer base that isn’t digitally savvy. So you can’t just think about building an experience that looks the slickest, or that every UI or UX person will love. You have to make the digital journey approachable and accessible for every cohort across the board. When we deployed online account opening, we worked closely with MANTL to achieve that—to create an experience that would resonate with everyone, regardless of their familiarity with digital tools.

Do you think there’s a generational factor at work here? In other words, do you see a clear generational divide in terms of digital savvy?

I do. And as I get older, I’m starting to think the divide will always be there. Sure, over time, you’ll see a rise in digital competency. More people will feel more comfortable on more platforms. But inevitably, there’s always going to be a wave at the very front—a wave of new natives who just instantly “get it”—and the rest of us will gradually fall a little more behind, no matter how sophisticated we think we are. In other words, there will always be a gap between the earliest adopters and everyone else. And we need to be mindful of that gap, because ultimately the customer determines the value of the solution—not the producer.

How do you see the relationship evolving between digital channels and brick-and-mortar branches?

Look, I’m a relatively digital-savvy person. I’m fine with doing just about anything online as long as everything’s going great. But when something goes wrong, I want to talk to someone on the phone. And if it involves my money, I want to be able to walk into a building and get my money. In other words, there’s always going to be a place for the branch ecosystem. The question is, how can you make your branches amplify the value of what you’re doing, and not just be a direct service channel? How can you make your branches into a megaphone to broadcast and reflect your brand, your mission, and the services you offer?

At Cross River, you work very closely with a lot of fintechs. What role do you see fintechs playing in the financial landscape going forward?

At first, fintechs were all about the unbundling of the traditional bank. Now many fintechs have pivoted to rebundling—combining some of those unbundled components and packaging them within a Banking 2.0 or 3.0 architecture. And I think that will continue to happen, but the new challenge for them will revolve around trust. They’re starting to run up against some of the challenges of being a bank—you know, the regulatory oversight and so forth. But overall, I think fintechs will continue to add a lot of value within the financial ecosystem by digging into embedded banking and rethinking those legacy processes that have built up around outmoded tools.

What advice would you give to a leader at a community bank or credit union who might
be at the very beginning of their digital journey?

Don’t try to change the world in one shot. Don’t try to do what everybody’s telling you to do right now. And don’t purchase a tool until you know what you’re going to build. Make sure you have tech-enabled salespeople who can actually walk your customers through the process of using a new solution, especially when it’s not working exactly the way it should. And keep in mind that the Pareto principle applies to almost everything in life. If 20 percent of your customers represent roughly 80 percent of your revenue, then take a close look at their pain points. Figure out what’s actually broken for your most valuable customers. Listen to those customers directly. Bring technology and operations folks to the table so they can hear it, too. Identify the common denominators based on what you’re hearing. Then break it all down into something you can actually address and achieve within a discrete and well-defined timeframe so you can solve it. Then go back to your customers and say hey, did this actually work? And if they say yes, then rinse and repeat with the next largest problem.

What role has MANTL played in all this?

What sets MANTL apart, in my opinion, is how you’re able to distill the customer experience to its most valuable essence—and then deliver consistently and beyond expectations. When we entered the tumult of the pandemic, we told your team that we wanted to go live quickly, and you rose to the challenge. You were able to deliver a fully working solution that met our compliance standards in less than four months from when the ink was signed on the contract. That’s pretty amazing. We’ve been able to create a very logical experience for our customers so they can get through the application process, get funded, and get onboarded onto our core without the need for constant support.

What’s next for you and Cross River?

It’s so important to me—both as an individual and as a Cross River employee—that community banking exists. I don’t want it to become a bunch of very large banks forcing customers into a very depersonalized experience. One of the things we learned from the pandemic was how important it is to know that there are financial services providers who can help you when times get tough. Community banks have served an absolutely critical role in getting so many individuals and businesses through a very challenging time. So anything we can do to keep expanding and sustaining that community banking model in the digital age is really worthwhile.

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