Why is a Chautauqua County-based community bank partnering with a local fintech startup?
According to the Lake Shore Savings Bank’s CEO, it’s about being an early adopter of cutting-edge technology that can be offered to business customers.
Buffalo-based Verivend has developed a secure billing management solution that seeks to replace paper trails and email chains, and it is staffed by co-founders that come from successful companies such as ACV Auctions, Willis Towers Watson and Buffalo Fuel Corp.
Bank CEO Daniel Reininga said it’s a strategic move, giving business bankers a product that customers can’t find anywhere else. Existing payment processes are rife with inefficiency and security weaknesses, he said.
Lake Shore is helping Verivend develop its onboarding process for customers.
“We think this is a great opportunity for our customer to be involved in the business-to-business digital wallet,” Reininga said. “Verivend’s systems are state-of-the-art, and they are really bringing cybersecurity to a new level in the payment world.”
It’s not uncommon in Buffalo to find local banks striking meaningful partnerships with startups. M&T Bank introduced its own internal startup, Nota, in 2019 and M&T executives such as CEO Rene Jones and CIO Michael Wisler have written checks to local startups in recent years.
Reininga said that could change as the innovative nature of fintech startups provide a dose of innovation that isn't natural to a community bank.
Dunkirk-based Lake Shore has 11 branches in Western New York, including five in Chautauqua County and six in Erie County.
Reininga said he got involved with the Verivend team partly because of its experienced co-founding team. Verivend CEO Rodney Reisdorf is coming off a successful decade stint with Liazon/Willis Towers Watson, president Aaron Santarosa’s The Santarosa Group oversees a portfolio of local energy firms and CTO Jonathan Ebel was recruited away from ACV Auctions.
“You’ve got players who know the digital space incredibly well, and know scaling incredibly well,” Reininga said. “They know how to take a product national. We’re helping them design their entire onboarding process for customers.”
Reisdorf said recently that the company is starting to see fast traction in the professional services and banking industry in Western New York, as firms see the value of implementing Verivend internally and offering it to their extensive list of clients.
Reininga said all banks are being encouraged to strike partnerships with fintechs and that this is his way of defining that trend through community banking.
“This is a vetted system that has discovered, in my opinion, a great opportunity to grow a service point for business customers," he said.
