This year marked BankTech Ventures second annual Limited Partner Summit. BankTech Ventures is the first venture fund created specifically by and for key leaders in the community banking landscape. Launched in 2021, over 100 banks are now part of the fund, with 11 investments already made and over 100 companies in its current pipeline ready to continue fueling the innovation ecosystem for community banks.
This is BankTech Ventures’ annual opportunity to showcase the fund's performance over the last year and introduce its portfolio and pipeline companies. They brought together some of the top leaders and experts in the community banking and financial technology space to discuss industry innovation, sharing lessons learned and best practices and brainstorming what the future of community banking will look like and how we’ll get there.
The summit’s line-up of expert speakers highlighted how it’s been a challenging year for fintechs, with the landscape changing for investments/funding (lots of carnage but also lots of opportunity). And while it was suggested that now may be a good time for bold moves, that doesn't mean unnecessary risks. Banking has changed too, shifting to be less relationship driven and more transactional. Yet the fundamentals have stayed the same, with the overarching discussion centering around three core themes for bankers – “Know Your Data,” “Win the Talent War,” and “Back to Basics.”
For today’s community banks, data is the new gold, driving decision-making and strategy development. But as was highlighted, it's not about data hoarding but rather knowing your data—comprehending it and deriving real-world, actionable insights. Banks should leverage the right technologies to analyze their data and ensure they understand their customers better. This will allow them to create personalized service that not only meet their individual needs but could also uncover new opportunities.
Talent continues to be a key concern for banks, with many panelists observing that recruiting will likely look different this year. While recruiting tech talent continues to be the #1 challenge for ICBA members polled, several bankers also shared that recruiting quality tech talent has actually become much easier over the past few months, likely due to layoffs in the tech sector (though most agreed that front office churn is still a major issue). Some panelists speculated that the fast-paced evolution of fintech has escalated demands on bank leadership. Banks must cultivate environments that are culture-ready and continue to support talent along their team members’ journeys. Banks must also ensure their staff are equipped with the right tools for the digital world, enabling them to do their jobs effectively and efficiently.
Stressing how banks should focus on the basics was a reminder that although digitalization is rapidly advancing with no signs of slowing down, the fundamentals of banking—deposit acquisition/retention, and understanding/catering to customer behaviors and needs are still critical to success. As digital channels continue to grow, it's important for banks to recognize how their customers want to access their money, whether it's through mobile banking, digital wallets or physical branches.
Keynote speaker, Chris Skinner delivered some thought-provoking insights, sharing his views on the interesting dichotomy between the financial and technology worlds (i.e., tech wants to change the world, while finance traditionally wants to keep it the same), how banks/banking at its most fundamental serves two key purposes: the store of value and exchange of trust, and warnings of the pitfalls for banks to inadvertently create a back-office “bank-enstein” where lots of dead tech can end up cobbled together with newer digital interfaces.
Overall, the summit was an engaging event, not only showcasing the current line-up of great technologies supported through the fund driving innovation for community banks, but also offering both bankers and fintech leaders useful, real world peer insights on these partnerships. The conversations were always lively and full of interesting and often candid discussions on navigating the waters between bankers and their technology vendors. The financial services landscape is rapidly evolving and while some bankers may be hesitant to act, summit experts reminded them that indecision is still a decision and each day that you do nothing, you are one step further from your market. However, making an effective change also doesn’t mean you have to do everything at once and “boil the ocean.” Bankers should start small solving one thing well as the first step in building their momentum and laying the groundwork for their evolution. If they do, hopefully they’ll have their own success stories to share at next year’s event.