Banks and fintechs talk partnerships in an increasingly digital world

Deposit growth

Digital transformation

Operational efficiency

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When Midwest BankCentre launched a digital brand, Rising Bank, it hit its deposits goal within a month. Now, it’s also realizing business efficiencies that benefit both brands.

Midwest BankCentre has seen plenty of changes in its 114-year history, but perhaps none so transformative as the digital revolution it started two years ago.

In 2019, the $2.3 billion-asset community bank in St. Louis, Mo., launched a digital-only brand known as Rising Bank, aiming to raise $100 million in deposits within one year. It blew past that goal in just six months and then finished the year with $130 million in deposits.

Rising Bank is one way Midwest BankCentre aims to achieve its longer-term vision of adding several hundred million dollars in new deposits within five years, as well as attracting younger customers and expanding its footprint. For the bank, brick-and-mortar branch expansion looked like a slow and costly way to achieving these goals, so its leaders decided instead to make a major commitment to digital technology.

“I refer to Rising Bank as a laboratory,” says Dale Oberkfell, Midwest BankCentre’s president and chief financial officer. “If you can learn how efficient it would be, then it would be easier to migrate the solutions to bigger parts of our organization.”

Overcoming customer friction

To prepare for the new division, Midwest BankCentre created a task force of 30 employees—about 10% of its total workforce—representing marketing, IT and other departments, as well as three members of the executive team. This structure ensured employee buy-in. “All were part of it, all bought into it and all understood it,” Oberkfell says.

Recognizing the community bank’s lack of online banking experience, Oberkfell looked for digital partners. “Bankers can make good choices, but the internet was a new place for us,” he says. “Our team wasn’t sure what our choices were. ‘Help me with our choices and we can arrive at the correct answer.’”

Oberkfell wanted to leverage Midwest BankCentre’s existing infrastructure, which is a Jack Henry core, and add new capabilities. In his research, Oberkfell learned that a customer’s online account opening experience is key.

With this in mind, the community bank chose to partner with MANTL, a fintech startup in New York City with a range of account-opening products. Though it’s a relatively new startup, MANTL had experience working with community banks. “They had real answers for the questions we were asking,” Oberkfell says. “They were very consultative.”

MANTL touts itself as core agnostic, meaning its solution works regardless of what core provider a bank uses. “We knew from the beginning that we would have to integrate with many core banking systems, so we built that competence in-house,” says Nathaniel Harley, MANTL CEO. “We provide deep core banking experience with modern best-in-class fintech developers that understand cloud-based platforms.”

Nathaniel Harley

The MANTL platform integrates other applications that may be necessary to provide additional online services. “We help the bank launch digital products quickly on top of its core,” Harley says. “It doesn’t have to go through the equivalent of a heart transplant to stand up new applications.”

Midwest BankCentre also developed a key partnership with Alloy, a digital know-your-customer (KYC) solution that makes account opening easier while helping the community bank satisfy Bank Secrecy Act (BSA) requirements. Rising Bank, for example, doesn’t require a signature card for opening an account, instead relying on six questions for verifying identity.

“KYC is one of the more mature spaces on the internet,” Oberkfell says. “The internet has exploded with databases about people. This KYC solution has been very, very successful for us.”

The result is that a customer can open a Rising Bank account online in three minutes. That achieves two fundamental “must haves” of online transactions: speed and no friction. “It’s an Amazon and Google world,” Oberkfell says. “People want to do what they want to do quickly and without a whole bunch of hassle. If you add friction to online account opening, such as requiring a signature card, 5% to 10% of people might drop off.”

Digital and legacy: stronger together

The community bank’s experience with Rising Bank has added efficiencies on the Midwest BankCentre side. For example, the digital brand’s online account opening capabilities have been migrated over to the parent bank. Even better, the legacy-digital partnership has been a two-way street. Once a Rising Bank account is opened, the MANTL platform drives the account into the bank’s core, where its banking products and services can be further leveraged.

“It uses our processes that we’ve had for years to drive other activity,” Oberkfell says. “Maybe a customer wants to originate an ACH transaction or transfer money from one account to another. It’s about going out to the internet, bringing in those deposits and then riding the rail of the 114-year old bank.”

The legacy-digital ties are also reinforced by the fact that Rising Bank branding comes from its Midwest BankCentre heritage. “We’ve always used a ‘Rising Together’ tagline, signifying that we want to help you rise up, do better, help the community do better,” Oberkfell says. “That carried over quite nicely into Rising Bank.”

Rising Bank ensured a successful launch with a streamlined website and public relations outreach to online review sites like DepositAccounts and NerdWallet. “Consumers trust those platforms, and our name was positively accepted very quickly,” Oberkfell says.

He regards the division as a new expression of the community bank’s heritage of focusing on the customer experience.

“We will not vacate the 114-year history we have built and go digital only,” Oberkfell says. “This is another channel to provide another choice efficiently for customers who desire that approach. That somewhat separates us community banks from big banks. Community banks distinguish themselves by who they are, how they engage with customers and how they impact local communities.”

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