Twelve leading community and regional banks announce the founding of Alloy Labs Alliance, a consortium approach to innovation and technology adoption. FinTech Forge will manage the Alliance, and Crowe LLP, a public accounting, consulting and technology firm with offices around the world, will provide consulting advice and services regarding regulatory and compliance matters.
“No bank wants to be the next Sears. To survive, every bank needs to innovate in order to drive down operating costs while ramping up the value we can deliver to the customer” said Chris Nichols, Chief Strategy Officer of CenterState Bank. “Community banks play a special role in the lives of our customers,” added Julie Thurlow, CEO of Reading Cooperative Bank, “but we don’t have the same IT and innovation budgets as the big banks to capitalize on that relationship.”
Alloy Labs is a platform for banks to identify shared areas of opportunity, and establish smaller workgroups to conduct a deep dive on specific opportunities or pain points. The workgroups explore the opportunity or pain point, screen potential partners, and share best practices through implementation. Working collaboratively, the banks are also able to work with earlier stage fintech startups to shape their solutions while reducing execution risk. Alloy Labs is currently working on both customer facing applications and back office efficiencies. Banks that aren’t ready to begin adopting new technology can still join the Alliance to learn from others in the group, share in ongoing research, and shape the direction of the consortium.
“While we are actively engaged with fintech startups on our own, Alloy Labs was an opportunity to accelerate our efforts” said Claire Devney, head of fintech partnerships at First National Bank of Omaha.
“We work with banks at all stages of their evolution. Some are just creating their internal capacity, while others are leaders looking to extend the impact of their efforts with the network effect of working with others” said Jason Henrichs, founder and Managing Director at FinTech Forge. “Working collaboratively helps banks move faster while managing risk and compliance” added JP Nicols, Managing Director and FinTech Forge’s co-founder.
“There’s a mistaken perception that smaller banks aren’t as innovative as the largest players”, said Jill Castilla, CEO of Citizens of Edmond, “we absolutely are, but need to take a different approach to maximize the impact.”
“We started our customer-facing fintech initiative a little over 4 years ago hoping that maybe it might turn into something. Today, we work with some of the best fintech companies in the world,” closed Mike McCrary who leads the fintech initiative for Lincoln Savings Bank.
Alloy Labs Alliance is a member-directed shared innovation lab and accelerator that reduces risks, lowers costs, and shortens the time between ideas and results. This is a new approach to collaboration and the adoption of new technology for banks without massive innovation and IT budgets. Founding members span the United States, representing institutions ranging from $251million to nearly $20 billion in assets. The Founding members include:
CenterState Bank - Florida
Citizens & Northern Bank - Pennsylvania
Citizens Bank of Edmond - Oklahoma
Columbia Bank - Washington
First National Bank of Omaha - Nebraska
Gulf Coast Bank & Trust Company - Louisiana
Inland Bank - Illinois
Lincoln Savings Bank - Iowa
Mercantile Bank of Michigan - Michigan
nbkc Bank - Missouri
QCR Holdings - Illinois
Reading Cooperative Bank - Massachusetts
Read the article in Business Insider: Small Banks Are Getting in on the Fintech Push
Read the article in American Banker: Small Banks Join Forces to Address Fintech Challenges