Can a social media site help stem the flow of community banks selling out? Texas Independent Bankers Association President and CEO Christopher Williston thinks his group’s Bankers Helping Bankers service might do just that.
IBAT launches Bankers Helping Bankers, which matches banks with similar technology profiles, with other business groups, primarily state associations like itself that are affiliated with the Independent Community Bankers of America. It aims to make Bankers Helping Bankers available to all community banks in the country.
“We can say shamelessly and unequivocally that we want Bankers Helping Bankers to be part of what saves community banking,” Williston said in an interview. The platform’s core value proposition is to give bankers an easy and free way to evaluate technology options – a task that smaller institutions often struggle with.
“They mine their data set to look at all the other banks in the country that are built like them, on the same central platform, to see what they’re running,” Williston said. “These are the products that are actively working in banks like yours nationwide, so this question – ‘What integrates [with my system]?’ – gets a response.
It’s a matter of weight, according to Dave Mayo, CEO of FedFis, the company that provides the data that powers Bankers Helping Bankers.
“It’s like a Ford wheel and a Chevy wheel,” Mayo said. “There are some things that don’t fit. The technology is the same way. There are things that fit in and things that don’t. Once you understand this integration card, the game is launched. »
Currently, about 75% of the country’s roughly 4,800 community banks can access Bankers Helping Bankers, according to Williston.
The fact that banks have been consolidating at a rapid pace is indisputable.
Laurie Havener Hunsicker, a Compass Point analyst who closely follows M&A activity in the industry, says more than 1,200 deals were completed between 2017 and 2021. There were 4,831 federally insured banks as of early February , down 18% since the end of 2016, according to statistics from the Federal Deposit Insurance Corp.
Technology concerns are high on the list of reasons driving consolidation, Williston said.
A seemingly simple project like reviewing technology options can prove difficult for a cost-conscious local bank that would struggle to pay a consultant but is reluctant to approach technology vendors directly “and get into the pipeline of sale from all vendors nationwide,” Williston mentioned.
As a result, smaller banks find it difficult to access the expertise needed to assess their technology options, according to Mayo. “It’s been a black hole for bankers trying to figure out the technology,” he said.
FedFis has spent years building a database mapping the technology stacks of every bank in the country, Mayo said. The company has made it available for free through Bankers Helping Bankers, given its concerns about ongoing consolidation in the industry.
“Mathematically, it’s time to save community banks,” Mayo said. “If we take another five years before we start to turn things around, we’re going to lose an incredible part of our economic supply chain.”
Once bankers have located another bank through the database that uses similar technology, Bankers Helping Bankers allows them to contact and discuss their experiences. The site allows bankers to discuss fintech topics as well as their experiences with specific vendors.
Although Williston did not provide any information on the moves the banks made as a result of participating in Bankers Helping Bankers, the platform has already helped at least one bank.
Texas National Bank in Sweetwater participated in the design phase of Bankers Helping Bankers, and insights from Williston and Mayo played a crucial role in its decision to launch a separately branded digital bank later this year, Mike Fernandez said. , president and CEO of the $171.2 million bank. – heritage institution.
“We’re a small, family-owned bank, so we don’t feel the pressure from other community banks, but that doesn’t mean we don’t aspire to be a high-performing bank,” Fernandez said. “We need to find a way to reach more people and generate business that works for us. … They have shown us a path that we are passionate about.
Even so, Williston acknowledged that Bankers Helping Bankers would not halt industry consolidation. Rather, its goal is to put tools in the hands of community bank CEOs to make it easier for them to weigh their options.
“You have bankers there who are like, ‘OK, I’m 100 miles behind everybody,'” Williston said. “For them, coming together and being able to poll the community to find out where they are calms that sense of urgency.”