Fintech Trends and Opportunities for Community Banks

February 8, 2021

Webinar Small Business

Community banks

Fintech trends are constantly evolving, creating new opportunities for financial institutions like community banks to better serve their customers. By keeping up with emerging fintech trends, community banks can jump ahead of the competition through early adoption and implementation of new processes and software.

Not only is it important to keep up with fintech trends, but it is also essential to understand the impact that each trend has on community banks. Once you understand the direct and indirect effects, you can identify fintech opportunities that will take your institution to the next level without losing any of the value that you already provide to customers.

Terry Ammons, Partner at Wipfli recently joined Info-Pro for a webinar to talk about current fintech trends, as well as how these trends impact and create opportunities for community banks.

Banking-as-a-service (BaaS)

Fintech is often at the front-end of online and app-based financial transactions, while banks are on the back-end processing the transactions. This is either done by banks working directly with fintech companies and handling everything else in-house or by partnering with an API provider.

Implementing banking-as-a-service allows community banks to increase overall revenue, grow the balance sheet, and make fintechs the customer-facing side of the transaction. However, banks should also understand that implementing BaaS requires a deep technical understanding, adds a layer of difficulty with risk management, and requires extra capital.

Point-of-need financing

Point-of-need financing is a huge trend throughout many industries and is virtually a modern version of indirect lending for higher-value online purchases. It allows buyers flexible loan terms and is delivered at the time of purchase using a programmatic decision-making process. A few examples of these providers are: PayPal, Klarna, and Affirm.

Adding point-of-need financing to your community bank’s suite of services will bring in additional income, help strengthen your business relationships, and assist you with maintaining customer ownership. As with BaaS, there is more risk management and regulatory oversight needed over your chosen provider, and you will need more capital to support this.

Integrated small business banking

There are many fintechs that want to serve the small business market by offering a product that integrates transaction data into the small business general ledger. 

A well-known example is QuickBooks, which allows bank data to be transferred into the application where it can be used for a variety of functions. This integrated small business banking setup allows organizations to easily receive and pay funds based on customer needs.

Finding an integrated small business banking provider for your community bank will keep all transactions within the bank’s ecosystem while helping small businesses by simplifying the way they invoice and pay bills.

Utilizing data analytics

A few data analytics tools that are specific to community banks are KlariVis and FI Works. These tools focus on profitability and understanding the value of customers, as well as risk management.

Acquiring data that is actionable and that allows for quick decision-making is essential for community banks. Data analytics tools drive growth and help bring in revenue by helping banks segment, target, acquire, and retain customers. 

Applying fintech trends to your community bank

Understanding fintech trends and turning them into opportunities for your community bank is important for your organization’s bottom line, growth, and reputation. Be sure to utilize fintech providers in a way that makes sense for your specific business and customers.

Info-Pro takes “the complex” and makes it easy. We collect and integrate data from the 26,000+ property tax authorities nationwide into a user-friendly software platform, enabling community banks to easily identify property tax delinquencies and pay escrow taxes. To learn more, contact us today.