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A convergence of financial and market components presents neighborhood banks with new alternatives for innovation and development as they give the impression of being to the brand new yr.

By Charles Potts, ICBA

The fintech panorama is shifting. Investments in new firms have slowed, valuations that some early-stage firms commanded final yr are ratcheting again, and monetary know-how suppliers are tightening their proverbial belts. Whereas difficult for some, this convergence of financial and market components presents neighborhood banks with new alternatives for innovation and development as they give the impression of being to the brand new yr.

With neighborhood banks finalizing 2023 budgets, now is a superb time to reevaluate present enterprise partnerships and take into account whether or not partnering with further or totally different fintech suppliers would higher meet the financial institution’s and clients’ wants.

For neighborhood banks which have but to begin evaluating digital options and suppliers, now’s the time to behave. Present market shifts have created a purchaser’s market, placing neighborhood banks in a positive place to renegotiate contractual phrases and turn out to be extra selective of their supplier decisions.

As neighborhood banks leverage these market benefits, they need to take into account partnering with suppliers that bundle their providers and options to satisfy clients’ calls for. For the previous few years, fintechs have labored to handle particular challenges or niches, making a siloed strategy that resulted in a number of answer suppliers and platforms, creating pointless friction for neighborhood banks and their clients.

In response, neighborhood banks, like $779 million-asset Lead Financial institution in Kansas Metropolis, Mo., have begun investing in fintech suppliers that may arm them with the capabilities to bundle their providers and streamline processes. We see this identical pattern taking part in out in bigger monetary establishments as properly. Earlier this yr, Financial institution of America introduced its new tremendous app, which facilitates bundling a number of options below one umbrella.

On this time of financial uncertainty, neighborhood banks even have a possibility to remind their clients of their presence, worth and stability. By means of partnerships with sturdy answer suppliers and a eager give attention to attending to clients’ needs, neighborhood banks can’t solely improve buyer loyalty however deliver new clients into the fold.

Digital banking options stay a major focus for ICBA, mirrored in initiatives corresponding to our famend ThinkTECH Accelerator program, which we’re bringing in-house in 2023. We’re excited to take the subsequent step on this journey to construct extra complete programming aimed toward additional addressing the rising wants of neighborhood banks and the purchasers they serve.

Think about the chances and embrace the alternatives earlier than you. Seize the second to discover innovation.

Charles Potts (charles.potts@icba.org) is ICBA government vp and chief innovation officer