A Passionate Mindset and Superior Execution: A Conversation with BM Technologies’ Luvleen Sidhu

A Passionate Mindset and Superior Execution: A Conversation with BM Technologies’ Luvleen Sidhu

Is there a better person to lead a conversation about bold leadership in fintech than Luvleen Sidhu? Chair, founder, and CEO of BM Technologies, Sidhu was the youngest female founder and CEO to take a company public when her firm listed on the New York Stock Exchange at the beginning of the year.

“I am proud to see BM Technologies take this historic step and enter the public markets,” Sidhu said in January. “We are delighted to be one of the first neo banking fintechs to go public. We are also EBITDA positive today, which serves to set us apart from other neo banking fintechs in the market.”

Formerly known as BankMobile, BM Technologies currently has more than two million account holders, and provides disbursement services at 700+ college campuses in the U.S., reaching one out of every three students in the country. The BaaS innovator was among the fintechs to earn recognition at the recently announced Finovate Awards, taking home top honors in the Best Fintech Partnership category for its collaboration with T-Mobile.

Beyond the Arc’s Steven Ramirez hosted a fireside chat with Luvleen Sidhu as part of the FinovateFall conference in New York last week. Below are a few excerpts from their conversation.

On what it takes to be a bold leader today

For me, being a bold leader really comes down to a few key things that, in my opinion, a bold leader would demonstrate. So that is being able to have a compelling and unique and unifying vision and purpose. (It is) being able to get people to buy into that, to be energized by that, committed to that. (It is also) being able to have superior execution, because you can have a great idea and be in the clouds, but unless you are working on improving, iterating, and being agile and adaptive to the times, you’re not going to succeed.

On the inspiration behind her company’s “bold bet” in 2016

We launched in 2015 as a direct-to-consumer strategy – like the Chimes, the Varos, the N26s of the world are doing now. We found out pretty early on that our pillar of being able to have a profitable, sustainable model as fast as possible wasn’t happening. The CAC was really high. We weren’t getting the sort of engagement and direct deposit customers which are critical in banking to actually get. So we took a bold bet in 2016 where we took a B2B2C approach and started implementing banking as a service, which is our strategy today.

On practicing bold leadership on an individual level

I think it’s contagious. When you’re bringing that innovative sort of passionate mindset and energy to work, then you engender that with everyone that you work with. It creates this ripple effect and you get others to buy in and work with you and you create a lot of tremendous momentum from that. I think it’s (important to) remain keen to continuous learning. This space is moving so fast. We can’t rest on our laurels for more than six months (before) you’ve got to innovate again. And so it’s people that make sure that they’re looking at what their customers are saying – and responding to that – but also looking at the competitive environment, how is it changing, how is it evolving … (That’s) how you remain competitive in the space.

Check out the rest of Luvleen Sidhu’s Fireside Chat: Why We Need Bold Leadership More Than Ever Before from FinovateFall 2021.

Leading Transformative and Innovative Change in Fintech: A Conversation with Karen G. Mills

Leading Transformative and Innovative Change in Fintech: A Conversation with Karen G. Mills

As part of our #womeninfintech series, we spoke with Karen Gordon Mills, a Senior Fellow at the Harvard Business School and a leading authority on U.S. competitiveness, entrepreneurship, and innovation. She details her perspective and experience with small businesses and lending, and highlights several other women leading the charge to create a better future with fintech.

How did you become interested in fintech?

Karen Mills: My interest in fintech grew out of my work with small businesses.

As Administrator of the U.S. Small Business Administration (SBA) from 2009 to 2013, I had a front-row seat to the challenges that small businesses face when accessing bank capital. Getting a loan is an onerous process even for the most creditworthy small business owners. It often involves carrying stacks of paperwork to a local bank and waiting months for a decision. That’s because for banks, lending to small businesses is actually pretty hard. They tend to lack complete information about the business that would allow them to determine profitability or cash flow, and since small businesses are such a heterogenous group, it’s difficult for loan officers to develop expertise in a specific sector. These frictions have led to a credit gap, especially among the smallest and most vulnerable businesses.  

The traditional lending process wasn’t working for this critical part of our economy. Yet it had been this way for decades and only started to change in the late 2000s, around the time I was at the SBA. That’s when a wave of new fintechs entered the market. The fintechs gathered nontraditional data streams from their small business customers (like daily transactions) to get around the lack of information, integrated them using application programming interfaces (APIs), and deployed machine learning tools to quickly generate insights about the business and automate loan decisioning. All of a sudden, small businesses could submit applications, receive decisions, and find new funds in their accounts in a matter of days.

I thought fintech’s potential to transform small business lending was so transformational that I wrote a book describing its evolution and possible outcomes: Fintech, Small Business & the American Dream. I’ve continued to speak about and research fintech developments in my current role as a Senior Fellow at Harvard Business School.

How have you seen the industry change across your career?

Mills: Lots of people initially thought the fintechs would knock traditional banks off the map. But that hasn’t happened. Although banks might be less nimble or tech-savvy, they have established customer bases and low-cost capital—which most fintechs don’t. One big change we have seen in recent years is a rise in bank-fintech partnerships, with each seeking to benefit from the other’s strengths. Another important development is the presence of Big Tech companies, like Apple and Amazon, whose wide reach and ability to create seamless user experiences allow them to make rapid and large-scale inroads with small businesses.

The pandemic has obviously brought massive change over the last year, and accelerated the uptake of digital technologies for both lenders and borrowers. The Paycheck Protection Program (PPP) played a key role, pushing banks to overhaul their systems and get money out the door at an unprecedented pace. Fintechs were especially important in distributing aid dollars to the smallest businesses, and they may be able to leverage that success into new customer relationships. Meanwhile, with more and more activity occurring online, small businesses will likely adopt new digital tools to serve their various needs—in everything from lending to advertising.

How have you seen female leadership influence the fintech space, particularly around small businesses?

Mills: Women have developed some of the most transformative and innovative fintech solutions that I’ve seen for small businesses. For example, Kathryn Petralia co-founded Kabbage, a company that pioneered the use of alternative data and machine learning to automate small business lending. As the head of Square Capital, Jackie Reses built out Square’s similarly data- and technology-driven strategy for providing small business loans. Both of these women, and many others like them, have created crucial new opportunities for small businesses to grow and thrive.  

Women’s leadership has also been influential in other, related spaces. In traditional banking, women like Jill Castilla, the CEO of Citizens Bank of Edmond, a community bank in Oklahoma, are spearheading digital transformations intended to provide better service for small businesses. In academia, female economists like Professor Sabrina Howell of NYU are doing crucial research around fintech’s impact on small businesses—including demonstrating how fintechs like Kabbage and Square played an outsize role in delivering PPP funds to minority-owned businesses during the pandemic. 

What more do you think can be done to support women in fintech?

Mills: First and foremost, we need more women in fintechs, in banks, and in the research and policy areas too. There are talented women coming up in banking and in other areas of finance who will push the industry to adopt more innovative solutions.

And, yes, there are things we can do to help. Investors need to funnel more money to female founders in fintech, and established companies and organizations need to implement better recruitment and selection strategies. There are brilliant, highly-qualified women out there who may well have the next big idea or innovation for small business customers. We just need to be more deliberate about bringing them on board and promoting them to the highest leadership levels – in ways that account for the biases and obstacles that women often face.   

We also need to be aware that simply recruiting more women isn’t good enough. It’s crucial to actively foster cultures of diversity, equity, and inclusion that provide women—and all underrepresented groups—with the resources and opportunities they need, and with an environment in which their contributions are valued. Organizations that do this well will be more successful in innovating and winning in a rapidly changing environment like the worlds of banking and fintech.

What advice would you give to women starting their careers in the industry now?

Mills: Fintech is a great industry to be in. Traditional banking is being challenged and organizations are more open to innovative thinking – because they have to be. Female leaders are most often excellent problem solvers. The solutions that fintechs put forward are game changing. Better access to capital can have a significant impact on the success and wellbeing of small business customers, and on the American economy.

My advice to women is that this is a critical time to get involved. Work to build a new environment that closes gaps in the market and improves access and opportunity for a more diverse set of small business owners. Get engaged, build relationships (and help each other out), pursue your ideas, and stay committed to your goals.

Photo by Debadutta from Pexels

Women in Fintech: Creating Shared and Seamless Experiences with Mithu Bhargava of NCR

Women in Fintech: Creating Shared and Seamless Experiences with Mithu Bhargava of NCR

How are fintechs helping financial institutions make successful digital transformations? What is required in order for financial institutions to maximize the opportunities available from increasingly ubiquitous enabling technologies to better engage and serve their customers and members? What lessons can we draw from those banks, credit unions, and other financial services providers that have prioritized digital transformation over the past several months?

We checked in with Mithu Bhargava, Senior Vice President and General Manager for NCR’s Global Professional Services Organization to talk about the current pace of digitization in financial services, and what financial institutions are doing to meet their customers’ growing expectations for shared, seamless experiences.

What are the most significant changes NCR has seen in the banking landscape over the past year?  

Mithu Bhargava: The pandemic served as an impetus for banks to digitally transform. While the industry has been talking about digital-first banking for years, Covid-19 firmly accelerated this transformation. At NCR, we were prepared to manage the shift; we have been evolving toward a digital-first and self-directed banking approach for years. As a result, we were able to help banks and credit unions continue to serve their customers and keep operations running even while social distancing. Moving forward, we believe digital-first banking will be the route institutions must take to survive.

Over the past year, we’ve also noticed a growing customer demand for cryptocurrency, which is why NCR recently announced that we’ve entered into a definitive agreement to acquire LibertyX, a leading cryptocurrency software provider. We plan to offer the LibertyX capabilities as part of our solutions for banks, retailers and restaurants across both physical and digital touchpoints. This will ultimately provide a complete digital currency solution for our customers.

It’s time for financial institutions to leverage flexible, modern digital technologies to navigate changing business needs and demands. At NCR, we firmly believe that digital-first banking doesn’t just mean adopting new digital banking tools, a common misconception. Rather, digital-first banking is a shift in mindset; it requires re-imagining an institution’s holistic digital strategy to evolve alongside customer expectations, digitizing all aspects of the financial journey and connecting digital and physical experiences. Financial institutions that focus on creating these shared, seamless experiences are able to differentiate their brand and expand existing customer relationships while attracting new ones. 

Obviously digital experienced a significant uptick because of the pandemic – is that here to stay? What role will branches play in the future?  

Bhargava: Yes, we believe that this trend in digital channels will not be reversed; consumers that traditionally shied away from digital (for example, older generations) have now seen how easy and convenient it is. While the branch will always remain a critical touchpoint, the pandemic has forced the traditional branch model to evolve. Branches are elevating in terms of functionality and services offered. Expect to see more banks and credit unions approach the branch from an advisory perspective, serving as a place for customers and members to go for personal financial advice and complex services—not routine transactions. 

We also anticipate the rise of digital bank branches that leverage self-directed technologies like ITMs and ATMs. Such technologies provide convenience and speed to customers while creating efficiencies for the institutions, enabling them to cost effectively extend service hours. More banks and credit unions are expanding the ITM functionality offered, incorporating more video teller capabilities to maintain the human connection. There will be a shift in how institutions manage these machines, as well; more will transfer the burden of machine maintenance and updates to a trusted partner via the cloud. Such a hosting option makes the self-directed banking channel simpler by offering a better, digital-first customer experience while reducing the total cost and onus of ownership. Branches are evolving to build profitable relationships and long-term loyalty.  

What trends should bankers watch out for here in the second half of the year?  

Bhargava: Customers expect a fast and frictionless experience at every touchpoint, and they’ve proven they’re not afraid to walk away when those expectations aren’t met. Looking forward, there will be a continued (and accelerated) convergence of digital and physical channels. What have traditionally been channel-specific experiences are being made ubiquitous across the bank through software that can connect those experiences.

Self-directed banking will also continue to take off. This approach puts the customer in the driver’s seat, allowing them to decide how they would like to engage with their bank or credit union across all channels and touchpoints. The need for a customer to ever have to work in silos is eliminated, creating a seamless, connected experience. Self-directed banking empowers the customer with flexibility and choice and those banks who embrace the shift will be well positioned for success heading into 2022 and beyond.  

Everyone talks about digital transformation, but many still struggle to get it right. What are some key tips and strategies to make it work?  

Bhargava: I have three thoughts on this. First, too often, we see bankers jump on emerging technology trends versus really evaluating their current gaps and needs. The first key to digital transformation is to focus on your bank’s overall approach; don’t just pick a technology but pick a specific problem area to focus on. Those that leverage rationalization to determine which processes are ready to be digitized right now and which need to be reimagined entirely before digitizing will be best positioned to navigate digital transformation. Digitizing a flawed process typically just makes a cumbersome process faster.

Second, once your bank has the right mindset for digital transformation, it’s time to focus on the people. Engaging the right leadership team with the relevant skillsets will be a huge asset. Digital transformation should be something that’s embraced organization-wide, not just at the leadership level. Make sure to secure buy-in from stakeholders across the institution. In addition to leveraging appropriate people from within the organization, most banks and credit unions find significant value in partnering with technology providers where appropriate to extend reach and come to market better and faster.

Setting goals and clearly defining a realistic digital transformation roadmap from the onset will allow the institution to evaluate progress. Technology should be used to help effectively monitor and measure performance against goals to help keep everyone on track. User feedback should also be evaluated throughout when applicable, not just at the very end. Finally, it’s important to remember to keep it simple. Complexity on the institution’s end can result in friction for customers.

The competitive landscape continues to intensify and grow more complicated – how can community and regional FIs protect their market share?  

Bhargava: The embrace of digital-first banking quickly and completely will position banks and credit unions for success. Why? Digital-first banking creates new and exciting opportunities for traditional institutions who now find themselves up against a slew of emerging fintech companies adept at swiftly closing the widening gaps between yesterday’s and tomorrow’s consumer banking needs. And the world has changed. We will never be the same as we were before March 2020, at least when it comes to how consumers interact and connect with their service providers.

Personalization will also be critical moving forward. Those that continue to leverage marketing campaigns to the masses will quickly turn off customers. Instead, outreach should be intentional and tailored. Institutions have a wealth of data available to them, and it’s time to use it for insights to guide customers in making the smartest financial decisions.

Digital-first banking is all about merging digital and physical experiences to meet customers’ timely financial needs and making it simple to serve the customer across all channels and touchpoints—without breaking the back office. Those that can do this while leveraging their data to personalize engagements will be well equipped to protect their market share and relevance.

Photo by Vraj Shah from Pexels

Women in Fintech: Learning to be Nimble in the Face of Uncertain Circumstances

Women in Fintech: Learning to be Nimble in the Face of Uncertain Circumstances

Our Women in Fintech Series continues with an interview featuring Kathryn Petralia, co-founder of Kabbage, an American Express Company.

We caught up with Kathryn Petralia to discuss her journey to success as the co-founder of Kabbage, an American Express Company, how alternative lending is democratizing access to financial services, and the importance of advocating for inclusion for every employee and end user.

Can you tell us how you got involved in fintech?

Kathryn Petralia: I was always interested in technology, its possibilities and impact, but I never considered it a career until much later. I was on track to earn a masters degree in English when a family friend asked me join a tech company he had invested in at the time. I ended up ditching the graduate program to take advantage of the opportunity.

From there I spent close to 15 years working in the credit, payments, and e-commerce industries, leading strategy and corporate development, as well as founding multiple companies. When my co-founder, Rob Frohwein, approached me about the idea of Kabbage, I immediately saw the potential to help small businesses gain access to capital via real-time data.

What drew you to the world of alternative lending? 

Petralia: I’ve been in alternative lending since the late ’90s, and my passion for helping small businesses has always been a driving force.

I was drawn to alternative lending as it’s a very interesting area of financial services that was ripe for disruption as new technologies paved a path to give customers a better experience.

At the time, I could see that automation and access to real-time data could do away with the lengthy, manual processes which were the status quo in the industry, and democratize access to financial services.

Where did you find support as you were starting out? 

Petralia: It’s important to have a strong partner and support system at home and in the office. I’ve been fortunate that my husband has been an at-home dad for our kids. And I’m an advocate of having a co-founder in business, someone that compliments one another’s strengths and weaknesses, and I’ve been lucky to have Rob a part of this journey.

Kabbage has grown into a hugely successful company. Can you share some of the challenges you have faced on your journey? 

Petralia: It was very challenging to raise money when we first launched Kabbage, especially in Atlanta where the venture community was small and there was not a lot of competition at the time. This unfortunately tends to drive down company valuations. It was hard to get Silicon Valley investors behind Atlanta businesses, but we ultimately succeeded and really raised the profile of Atlanta as a fintech and startup hub.

What advice do you have for small businesses coming through the pandemic?  

Petralia: While businesses were forced to adapt their processes to stay afloat during the pandemic, it’s crucial for them to continue evolving for long-term success. According to our Small Business Recovery Report, 77 percent of small businesses agreed they’re more open than ever before to replace old systems and adopt new technologies to run their company more efficiently.

Be nimble in the face of uncertain circumstances and adopt new technologies that will aid in the success of your business.

Where do you see fintech heading in the next 12 months?

Petralia: The pandemic highlighted where small businesses have cash flow gaps and operational blind spots, so fintechs should shift their focus and offer more comprehensive solutions that address these concerns. Offering a full suite of solutions and integrated platforms can provide business owners with the tools they need to solve their immediate needs while instilling more confidence in how they run their company with data.

What more do you think can be done to support women in fintech?

Petralia: There is so much more we can do to create equality in fintech. The gender disparity in fintech is due, in part, to the tendency of white-male-dominated industries to invest in other white-male-dominated businesses (which is of course true for technology companies generally). We can ensure this situation doesn’t endure by building inclusive products and encouraging leaders to make diverse hires. It’s crucial that we continue promoting policies and products that minimize biases and create a more inclusive industry.

What advice would you give to women starting their careers in the industry now?

Petralia: Women in Fintech must advocate for inclusion not just for leadership, but also for every employee and end user. But as for those women—or men, frankly— just joining the industry or pursuing their goals, I always advise to really take the time to be the smartest about your field, job, or industry. That will earn you seats at tables and trust among executive teams that will help propel you and your career.

Photo by Tim Gouw from Pexels

Women in Fintech: Finding Community and Investing in Social Capital

Women in Fintech: Finding Community and Investing in Social Capital

Our Women in Fintech Series continues with an interview featuring Pauline Roteta, Co-Founder and CEO of Pasito.

We spoke with Pauline to discuss the importance of DEI in current fintech trends, the benefits of finding one’s community, and her journey to founding Pasito, the fintech that delivers financial wellness through inclusive employee benefits.

Pauline will be joining our Women In Fintech Power Panel: Paving The Way For The Next Generation Of Female Founders & Executives – How Can We Reach A Gender-Neutral Future In Financial Services? at FinovateFall next month.

Tell us about yourself.

Pauline Roteta: I went to college to be a Civil Engineer. Growing up in a small town in Argentina, I was awestruck by the sheer size of development in New York and wanted to be part of that continuous cycle of growth. While I cherish the process thinking engineering gave me, after a couple of civil and construction internships, I was hired by Goldman Sachs for the summer and have never looked back.

In finance, I found a community of the sharpest minds tackling global challenges and saw the opportunity to effect impact at scale.

Now a decade later, I can safely say that finance has given me the development and growth I was after. I’ve been part of teams that grew multi-billion dollar businesses from scratch, led acquisitions, raised private equity funds, and I have been the most senior female investor of a private markets investment fund. In 2021, with this experience under my belt, I co-founded Pasito, a female-led fintech delivering inclusive benefits for working parents. As a founder and business leader, I am now even more excited than at the start of my career for the tremendous growth opportunity ahead for fintech companies like Pasito.

How have you seen the industry change across your career?

Roteta: So much has changed in 10 years. When I first joined BlackRock, we were focused on the European Debt Crisis and unraveling legacy portfolios from the 2008 Financial Crisis. While technology was important to the business model, most of our analysis and delivery was in person. The active-passive debate was just starting. Fintech wasn’t mainstream and wasn’t seen as a threat by incumbents.

Fast-forward to today: we’ve seen a proliferation of fintech companies that are effectively competing with long-time incumbents in wealth, banking, and payments. In the space where we are building, there has been less disruption. Plan administrators continue their manual processes. Technology looks like it’s from the first days of the internet. Customers haven’t yet been delighted. Pasito is working on changing that.

Where do you see fintech heading in the next 12 months?

Roteta: After the events of 2020, financial health and diversity, equity, and inclusion will remain top of mind for businesses and the government. We’re seeing employers treat financial and mental wellness with the same care that they treat physical health. That’s a huge win for the retail consumer and creates an opening for new business models in fintech to fill in the gap left behind by wealth management.

When it comes to DEI, we see fintech pushing the boundaries of financial product and service personalization.

While we’ve seen an explosion in fintech, it’s important to remember most of the big problems remain without a solution. The U.S. has never been more unequal. The wealthiest families, who are primarily white, own most of the stock market. Black and Latinx families have limited access to financial advice, and their assets amount to a fraction of the average American household wealth. At Pasito, we are working on closing this gap, one product at a time. Our hope is that more fintechs will build with this mission in mind, rather than continuing to develop products that solidify the status quo.

What more do you think can be done to support women in fintech?

Roteta: We have a long way to go in fintech to reap the benefits of a diverse workforce. The easiest way to begin this work is for leaders in the space – both men and women – to first look inward and ask:

  • What am I doing to actively advance women in fintech?
  • How am I contributing to female-founded and women-led companies and initiatives?
  • How many women are working for my company? (if the answer is not many, then ask WHY?)
  • How is my culture inclusive and inviting to women?

The second easiest way to support women in fintech is to simply listen. What do women need to join the industry? If you ask, they will tell you. (Hint: it usually boils down to equal pay, family-friendly benefits, and flexibility.)

Lastly, invest social and financial capital in women. Women with powerful ideas will not only increase the return on your investment, but also the overall positive impact you can have on the world.

Where did you find support in the fintech world?

Roteta: We’ve seen tremendous support from Startup BostonParenthood VenturesThe Capital Network, other fintech founders, and personal mentors. The insight and community from these networks have been invaluable for Pasito’s early growth stage. Our leadership team is now paying it forward to other founders, so we can collectively level the playing field in hiring, building, and fundraising.

What advice would you give to women starting their careers in the industry now?

Roteta: Be confident. Find your community. Listen to founders who have been there before. Conduct market validation before spending your money. Be selective of your investors. Above all else, stay true to your mission and values.

Photo by RF._.studio from Pexels

Women in Fintech: Anita Drentlaw on Building a New Generation of Leaders

Women in Fintech: Anita Drentlaw on Building a New Generation of Leaders

As part of Finovate’s Women in Fintech series, we spoke with Anita Drentlaw, President of New Market Bank.

Drentlaw is a fourth generational banker, who is committed to serving her community and keeping the bank within the family. She is passionate about the uniqueness of community banks and their importance in the financial industry – especially given the role of community banks in the recent disbursement of Paycheck Protection Program (PPP) loans. Drentlaw continues to build on and add to the bank’s family-like culture, developing leaders, and helping her team achieve strategic plans. She’s also involved in her local chamber of commerce, mentorship organizations, and non-profits.

What got you interested in finance and banking, and what do you enjoy most in your role?

Anita Drentlaw: Banking has been a family business for five generations, and I’m proud to carry on our family traditions and legacies. I’ve found community banking to be a perfect fit with my personality, lifestyle, and values.

What I like most about the role is the variety; it all starts with how we’re able to help and give back to the community. Community banking is about finding ways to work together to make something great. On any given day, I’m working with four generations of my family, including my daughter who worked with us over the summer.

I’ve also enjoyed being able to create a culture that makes everyone feel like they’re part of this family; they want to be here and are as proud of the New Market Bank as we are.

Are there family legacies you hope to pass onto future generations as it relates to the bank and its culture?

Drentlaw: Each generation builds upon our family’s culture to create something stronger. We have a great leadership development program focused on developing our team as well as the next generation of bankers. Our family is committed to staying a family-owned bank; our community has an appreciation for our commitment to staying a family-owned institution and giving back. That is a big part of our legacy.

I want to pass on the idea that not everything is black and white. I came from an accounting background where I believed everything always had to be perfect. But my dad changed this for me. He told me to accept that 80% is sometimes good enough and sometimes there’s gray in the world. This challenged me to think beyond my idea of perfection and do the same for others at our bank.

What is the difference between managing and leading? And how does it impact the bank’s culture?

Drentlaw: In the leadership development program that we have attended, our instructor, Erik Therwanger of ThinkGREAT, always says, “manage the work, but lead the people.” I think that statement is so true. We’re a bank that likes to lead; we empower our team to be leaders and provide them with the tools necessary to be successful. Being a leader requires having a stake in the game. We want our team to feel like they’re part of a larger vision and mission – one that they’ve helped create, have ownership in, and feel strongly about accomplishing. We’re not in the business of managing our employees, but want them to feel like the bank is just as much a part of their family as it ours.

Why is it important to strike a balance between in-person and digital interactions these days?

Drentlaw: There’s a place for both in-person banking and digital interactions, and the pandemic has certainly proved this concept. The need to move to a largely digital environment, for our team as well as customers, was possible thanks to the modern technologies we’ve added from partners like Jack Henry.

Moving forward, we must be available to customers whenever, wherever, and however we can be. While digital has expanded our customer touchpoints, it’s not – and shouldn’t be – the only way we communicate and build relationships. People bank at community banks like ours for the relationship; we’re the people who care – the ones at the football games, church events, restaurants. People might not think brick and mortar is important, yet branches aren’t completely obsolete, and customers still visit them. We want to be there for our customers for things they’d prefer to do in-person, as well as those that they choose to do online. For us, it’s about offering choices to our customers to meet their lifestyles and banking needs.

Why is advocating for women – and yourself – important in the industry?

Drentlaw: As women in the fintech industry, we have a duty to inspire and show other women what success can be. Advocating for yourself means standing up for what you believe in and never settling for anything less than you deserve. It’s about being brave enough to have the tough conversations and challenging the status quo. For younger women, it’s about finding their voice and tapping into the wisdom needed to reach the next level. We’re building the next generation of leaders in the industry, and that must include strong female leadership and influence.

Where do you think the future of fintech is heading over the next 12 months?

Drentlaw: This past year has shown the importance of community. We were able to help 360 small businesses in the South Metro tap into the Paycheck Protection Program – many of which were not existing customers. These loans infused more than $25 million into small businesses and our communities.

Next, fintech can help community bankers continue to revive our economies with greater customer insights that allow us to be more consultative and develop even deeper relationships. I have a feeling we’re going to see strong use cases launched to strengthen the relationships that consumers and businesses have with their bankers.

Women in Fintech with Lena McDearmid on Humanizing AI for Better Lending

Women in Fintech with Lena McDearmid on Humanizing AI for Better Lending

As part of our #WomeninFintech series, Finovate speaks to inspiring women about their career in financial services and technology, their unique insights into the challenges and solutions for the industry today, and their advice for the next generation of women leaders just starting out. Today, we join Lena McDearmid, COO at Artis Technologies, a provider of embedded financial services platforms for digital, point-of-need lending and payments. Lena helped launch the startup earlier this year with a mission to refine the consumer lending experience by merging the art of technology with the science of finance to create the best consumer experience possible.

What led you to fintech and specifically down a path toward acquiring the expertise you have now?

Lena McDearmid: It started with my mother responding to an ad in the paper looking for someone to manage short-term loans from retail locations. Here I, unfortunately, learned about the negative side of lending, but also how to build programs to help get people out of destructive cycles. This inspired me to move to Atlanta where I joined an online mortgage startup company.

However, in 2008, I could see a coming shift away from the trending jumbo hybrid real-estate loans into more stable and traditional loan types. With that foresight, I moved into conventional lending where I would diversify my underwriting experience with mortgage refinances, auto loans, personal credit cards as well as debt consolidation. I learned the importance of empathizing with customers’ needs and offering more customized products based on their unique loan usage.

From there, I went to a company that focused exclusively on underwriting auto loans, where I had my first realization of a “culture-first” experience proving that employees who are happy and positively impacted by their work culture are better able to focus on the customer’s experience. I believe completely that a customer’s experience is the most important part of business.

After my time there, I was then recruited to build out the credit department at GreenSky where, for the first time, I had direct contact with technology and could see what tech could do for my operations. I spent eight years going from credit operations, to project management, and finally to technical product ownership, before leaving to start Artis.

The journey of my career is one of constant learning and growth. I am a builder of companies, products, teams, and experience. Had I not had the good fortune to walk down so many different paths, there is no way that I would be here today having the confidence knowing that at Artis, we are building a company and products that are ultimately helping the consumer with more accessible financing, the most important part of business.

Where do you see the future of the fintech heading in the next 12 months?

McDearmid: Continually increasing reliance on big data and the ability to incorporate alternative data for better decision making, especially when it comes to credit. Stronger reliance on user experience and customizations per user. 

How can the financial services industry humanize AI and gain the trust of its customers? How is Artis Technologies helping?

McDearmid: It starts with the data scientists and the data. We have to know, throughout the design process, that there are humans analyzing this data. We also have to know what data elements are sensitive and understand how biases can get into the models so that we can design bias-free models and analytics. Finally, we must study the outputs and analyze their impacts on humans to ensure there are no adverse effects.

What does being one of the company’s women co-founders mean to you? And how does this set the example for other women looking to break into the field?

McDearmid: It means a great deal; most of the women in my family were entrepreneurs and as a co-founder, I now feel as if I am in their company. I imagine that the more women see other women as co-founders and leaders, this will encourage them to strive for these roles, as the women in my family inspired me. Each light on a path makes the path a little brighter and easier to follow.

How are you tackling the challenges and redefining the role of women at Artis?

McDearmid: One of the reasons I co-founded Artis was because I saw an opportunity to overcome the typical challenges women face in being heard and seen as leaders. Because Artis is a startup, it’s given me the opportunity to help define, not redefine, the importance of women and diversity at our company from the beginning. All of which are supported by my other like-minded male co-founders.

Why is it important to have multiple voices in the room, and hold each other accountable throughout the journey?

McDearmid: Diversity leads to quality. The ability to draw on multiple perspectives and experiences enriches discussions and solutions. And, without accountability, there can be no real growth, honesty, or radical transparency. Through accountability, we hold ourselves to our standards and continue our growth — regardless of gender.

What advice would you give to women starting out in fintech now?

McDearmid: Find a mentor and advocate. Believe in yourself and be assertive while learning as much as you can about all aspects of the business and industry.

Celebrating #WomenInFintech

Celebrating #WomenInFintech

At the beginning of this week, Greg Palmer wrote,

In order for fintech to be for everyone, it needs to be from everyone.

It’s a line that will strike a chord with anyone, across industries, who find themselves in the minority within teams and businesses, or even the sole representative of a different background or perspective.

Addressing gender-gap challenges in the finance industry is on-going, and a key part of this is providing a platform for women to share their insights and vision for the future of fintech. As part of this endeavor, we brought together some of the leading women from FinovateEurope to share their thoughts not only on issues on diversity in the workplace, but also on the key pain points in their field and their ideas on how to overcome them.

First, here’s a look at an interview with Dr. Louise Beaumont, Tech U.K.’s Co-Chair of the Open Banking & Payments Working Group. Beaumont was the Chair of the Open Banking Industry Stage at FinovateEurope last month and spoke with Finovate Research Analyst David Penn on the future of open finance, why banks need to believe they are trusted, and creating a full data daisy.

Penn also interviewed Ghela Boskovich, Founder of FemTechGlobal and Chair of the Digital Future Industry Stage at FinovateEurope. In this conversation, Boskovich explores why culture is the cornerstone on which financial institutions built looks at and the need for more public education around data.

The next interview was with Theo Lau, Founder at Unconventional Ventures and Chair of FinovateEurope’s Future Tech Industry Stage. Lau explores the challenges AI presents to legacy businesses and gender diversity in fintech.

Finally, here’s a conversation with Simone Vroegop, Head of European Product Management of Financial Technology at Brown Brothers Harriman. Vroegop discusses why it is crucial to have an open mind and look to where value can be added to an asset manager’s operating system, and why she’s surprised that hasn’t been more disruption in the sector.

Watch all our interviews with #WomenInFintech now >>

To promote the gender goal of 50/50 diversity in financial services, women who register by this Friday, March 13, can purchase a ticket to any 2020 Finovate event at a 50% discount. Just enter the code EQUALITY on the booking form.

Women in Fintech: Kathleen Craig on the Importance of Financial Literacy

Women in Fintech: Kathleen Craig on the Importance of Financial Literacy

As we approach the end of the summer, we reignite our #WomeninFintech series. We recently spoke with Kathleen Craig, CEO, HTMA creators of Banker Jr. and Plinqit about what inspired her to launch fintech software for banks and credit unions to engage their next generation of customers and why she thinks the future of fintech has to become more relationship driven.

Finovate: How did you start your career?

Kathleen Craig: I have more than a decade of banking and customer service experience. Prior to launching HTMA, I served as Vice President of eServices at a Michigan-based community bank. I studied Business Administration at Eastern Michigan University.

Finovate: What sparked your interest in fintech?

Craig: During my time with eServices in 2010 through 2012, I could see the writing on the wall that our community bank was going to need to compete in the digital arena. At the time the large cores were making this really hard to do. I understood that open banking and open API’s were an inevitability and I wanted to be a part of driving our industry forward to a place where only the largest technology companies could use technology and consumer data to serve $1 billion bank customers better.

Finovate: What prompted you to launch HTMA/Banker Jr etc.?

Craig: My motivation to create HTMA came from my passion for technology, children, and financial literacy. Our first product, Banker Jr. for banks and Member Jr. for credit unions, launched in January 2013 to provide financial education to children while giving institutions the opportunity to tap into their up and coming customer base through a branded platform. The solution is now licensed by financial institutions in nineteen states.

Finovate: Why is it important to teach financial literacy to children?

Craig: Financial education is lacking, especially among the youngest generations, and we are seeing the effects in consumer financial behavior and saving habits. In fact, according to GOBankingRates, over half (58 percent) of American adults do not have $1,000 in their savings accounts to cover emergency expenses, and many are struggling to pay down debt. Forbes reported that 38 percent of United States households carry credit card debt. Just under half (43 percent) of individuals with student loans are not making payments. Additionally, one in three Americans have no money saved for retirement.

Meanwhile, only 16.4 percent of United States students are required to take a personal finance course to graduate high school, however, the group where the biggest lack of financial literacy can be seen is Millennials, with only 24 percent demonstrating basic financial knowledge. This is a serious problem.

Finovate: Why is it important for banks to embrace new tech?

Craig: One of the biggest differentiators for community financial institutions is their customer service and ability to help their community members. However, increasingly people are not walking in the doors, so technology is going to be the best way for them to translate that great customer service to a digital experience. To do this, we are going to have to push for it and be creative and innovative.  Digital lends itself to transactions versus relationships, but we believe it can do both.

Finovate: Where do you think the future of fintech is heading?

Craig: It has to be more relationship driven. While it is great that folks can check balances, deposit checks and transfer money, people really need guidance and help with their money. Right now education and guided experience is not happening yet in fintech. There is a lot of talk about AI, chatbots and data driven tech, but measured successful outcomes that demonstrate a customer is better off having used your platform is what fintechs need to be striving for. The future of fintechs needs to be made up of less buzzwords and more customer results.

Finovate: What piece of advice would you give women starting out their career in finance/ fintech?

Craig: First, you need to do what you are passionate about. Secondly, have great mentors and advocates. The wider and more diverse your circle is the more fun you will have and the more success you will be able to achieve by learning from those you surround yourself with.

Women in FinTech: “The Ability to Serve Customers in the Best Manner Possible is Where I Draw Energy.”

Women in FinTech: “The Ability to Serve Customers in the Best Manner Possible is Where I Draw Energy.”

As part of our #WomeninFinTech series, we sat down with Kristin Marcuccilli, executive vice president and chief operating officer at STAR Financial Bank.

We talked about her transition from the world of college football to the world of banking and finance, what technology she thinks will lead the way, and why it is important to work with like-minded individuals to drive a business forward.

Finovate: How did you start your career?

Kristin Marcuccilli: STAR Financial Bank is a privately-owned family bank that’s been around for more than 75 years; in fact, my grandfather’s name is the “T” (Thomas) in STAR. Despite this family history, I didn’t always aspire to become a banker. I earned a bachelor’s degree in psychology and pre-medicine from the University of Notre Dame, and my student work in football operations and player development ultimately led me to my first job in the Notre Dame Football office for three years.  It wasn’t until later that I decided to pursue a master’s degree in business administration and management from Indiana University.

While working toward my master’s degree, I asked my dad about potential opportunities with the bank – though I still was unsure if this was the right path, I became more curious as I progressed in my studies and job experiences. When an opportunity to join the bank arose, I had to follow the same process as anyone else. Our bank has strict rules about family employees: we must work somewhere else for five years first; new positions won’t be created just for family members; and we must pursue an MBA or banking certification to even be considered for a senior management role.

In 2008, I joined the bank as a project manager, and haven’t looked back since. Over the past 11 years, I have worked my way up to chief operating officer, and I now help oversee our technology partnerships, project management efforts, bank operations and strategic direction. During my time at the bank, I’ve helped establish a strategic vision, oversaw a website redesign, helped implement 55 Interactive Teller Machines and have enhanced our digital banking strategy.

Finovate: What sparked your interest in fintech?

Marcuccilli:My interest in fintech stems from the reason I choose to work in community banking – it’s a relationship business, and our team’s involvement in creative thinking that will ultimately help change and influence the way people and businesses interact with their bank is an ever-present and ever-evolving challenge. A passion for fintech calls for an entrepreneurial spirit and the ability to embrace failure and change nearly every day. For me, that’s an exciting challenge.

Finovate: What technologies have you seen lately that have excited you?

Marcuccilli: New technology seems to appear overnight. Years from now, we expect that real-time payments will be the norm – no more waiting for money to move overnight or over the course of several days via check. The application of biometrics and advanced analytics for enhanced security will continue to expand and evolve, and artificial intelligence will support personalized customer experience through digital channels. Electronic delivery of documents, signatures and account opening will also likely be dominating a once paper-intensive banking environment. Self-service kiosks will also have advanced to replace much of the standard transaction activity both as in-branch and as standalone options. All of this excites me, as the ability to serve our customers in the best manner possible is where I draw energy.

Finovate: Why is it important for banks to embrace new tech? How is Star Financial Bank doing this?

Marcuccilli: In our rapidly changing industry, banks that are slow to adapt risk falling behind and losing critical business. Bankers have a significant advantage when it comes to building valuable relationships and supporting their local communities, but they must also add modern technology to remain nimble and relevant.

At STAR, we place a strong emphasis on maintaining our community focus while optimizing delivery channels and meeting customers where they are on their financial journey. We take a collaborative approach when evaluating and implementing new technology, starting at the top with our CEO who encourages the team to embrace change.

I am proud to be part of a powerhouse team, working alongside innovators and leaders who dedicate significant time and effort toward studying technology and client behavior to best meet our community’s needs. We have a group of smart, data-driven individuals who ensure our technology and services align with our business and customer demands.

Finovate: Where do you think the future of fintech is heading?

Marcuccilli: Delivery channel optimization (to ensure convenient and engaging customer experience), security threats and payments are all rapidly evolving and will continue to be a major focus in the fintech space. To effectively address these trends, there will be a growing demand and emphasis on the selection of third-party partnerships.  Finding the right technology partner – both a technical and cultural fit – will be important in facilitating the best experience for customers.

Finovate: Why is the #WomeininTech movement important?

Marcuccilli: There is a general lack of female representation in financial services, especially when it comes to the technology side of the house.  As industry professionals, we can help influence this by supporting and encouraging women to join and contribute to the field. Series like these are a powerful way to highlight how women are innovating and making a difference in their local communities through financial services and technology.

Finovate: What piece of advice would you give women starting out their career in finance/ fintech?

Marcuccilli: My advice is to be open to different possibilities within the financial services and fintech space as there are no shortage of opportunities. It’s important to surround yourself with strategic and smart individuals who help build up the team, supporting professional goals and development. I’d also encourage women to become involved in their local communities. Learning and growing from individuals outside of your organization can also be key to professional success. When we commit to staying attuned to business and industry trends and recent developments, we’re able to better support an ecosystem of entrepreneurship and growth in our local communities.

Finovate: And what piece of advice do you have for other banks to attract and retain more star female talent?

Marcuccilli: At STAR, we prioritize collaboration and innovation, and that’s been very attractive to top talent. Showing potential employees that the bank cares about exploring new ideas from all levels of the institution, not just from management or the C-suite, can be a powerful differentiator. Institutions that break down silos, encourage cross department collaboration and transparency, and embrace change will find more success in attracting and retaining star female talent.

Women in FinTech: It’s Time to Jump Right In

Women in FinTech: It’s Time to Jump Right In

As part of Finovate Live, and our #WomeninFinTech series, we sat down with Mary Wisniewski, Consumer Banking and Fintech Reporter at Bankrate, to get her take on the fintech industry, looking from the outside in, and what she thinks can be done to help close the gap and get more women into the sector.

Mary will be chairing the Digital Banking stream at FinovateSpring in San Francisco this May. Find out more about how you can get involved.

Finovate: How did you start your career?

Mary Wisniewski: I started my journalism career by writing about high-end jewelry for a business audience. Then I stumbled into writing about tech that debt collectors use to collect arrears. After that, I found myself blogging about fintech for Bank Innovation. Since then (and + 10 years), I haven’t parted ways with the fintech and digital banking beat.

Finovate: Why is fintech an exciting industry to be a part of in 2019?

Wisniewski: Because of the possibilities. There’s so much promise for fintech to help improve traditional banking products and services for consumers – including by revamping the credit score system. That’s huge. As a reporter, I find the industry fascinating to cover. Banking is in the middle of an existential crisis, and the story possibilities are endless.

Finovate: What is your prediction for fintech over the next 5 years?

Wisniewski: The way consumers share their data to use fintech services – and/or get products – will continue to move away from requiring them to hand over their bank user names and passwords. As the model evolves and banks use APIs over screen scraping, we must all stay tuned to the risk of banks calling the shots of what data they share or don’t share. We also need to pay attention to how inclusive the new data-sharing model is.

While there are a lot of headlines about banks and fintech companies working as partners more than ever, I believe it’s not quite so cheery as that. There are a lot of battles ahead.

Finovate: Do you think we see too few women in fintech?

Wisniewski: Yes. There is a gender imbalance. Just look at the empty women’s bathroom lines at conferences as evidence. In fact, this issue is something I blogged about in 2015 for American Banker. I could re-post this again today – my points remain the same.

Finovate: How can businesses better attract and retain female talent?

Wisniewski: This question is a hard one to answer, so I also sought input from a pro and my pal, Bonnie McGeer, the executive editor of American Banker. What follows are some actionable ideas – some from her and a couple from me – all of which I support:

  • Make sure women feel respected in the workplace – and that includes with raises. It also includes supporting their ideas with budget.
  • Avoid “bro club” vibes, including by not making women the butt of jokes. Comments like “you’re a lot better looking than the last guy sitting here” need to stop, too.
  • Require all those in leadership to be an official mentor/sponsor for one year to at least two employees (one male, one female) who are relatively new hires.
  • Go beyond golf for networking opportunities.
  • Make diverse hiring/promotions a component of annual evaluations for every manager that does hiring, and make poor performers on this component ineligible for raises/promotions that year. If women are at 10% overall of hiring/promotions for a particular group, that’s not acceptable.

Finovate: What advice would you have for women starting their career in fintech?

Wisniewski: Jump right in. You’ll get annoyed at times. But there are so many wonderful people in this industry – connect with them, at events and on Twitter. Also, don’t feel intimidated. Yes, there are people who have worked in fintech for a long time. But you’ll have something to offer they might not. You’ll feel in your zone soon enough. If you do get nervous, don’t underestimate what a power song can do before speaking to someone.