Emphasis on fintech gives NBKC 'a kind of youthfulness'

Kansas City-based NBKC Bank took a huge leap of faith in 2018 by launching the area’s first financial technology accelerator, and since then it has reshaped the way the bank thinks about its business.

NBKC’s Fountain City Fintech had two cohorts complete its accelerator, affecting 11 fintech startups. The bank paused the program in March 2020 after its vice president of fintech strategy Zach Pettet left to pursue other opportunities. But the experiment pushed the bank outside its comfort zone.

“We were on this technology scene and didn’t really completely know what it would mean for our bank. We were saying that we weren’t content with the status quo, that we needed to do something," Chief Technology Officer Scott Ramon said. "By being in that space early, we’ve really positioned ourselves to be one of the leaders in that 'banking as a service' space, and it shows with the types of partnerships we’ve been able to put together.”

NBKC Bank shifted from running an accelerator to forming banking partnerships with active fintechs. The fintechs offer solutions to common problems banks face, and the bank brings the customers, FDIC insurance and compliance with banking regulations.

NBKC’s fintech partners include:

“We've positioned ourselves as that behind-the-scenes partner for many fintech companies, doing all the work of gathering the customers and presenting the products to the customers,” Ramon said. “The customer signs up through the fintech, which does all the due diligence around who those customers are, collecting whatever documents they need to collect. We sit behind the scenes and provide the actual deposit accounts, debit cards or whatever it is. That's actually been, and continues to be, very successful for us."

Ramon said working with fintechs for the past few years has changed NBKC's culture.

“It gives us a kind of youthfulness,” Ramon said. “It’s an ambitious outlook on how we run our own business. It lets us question things. It lets us put our money where our mouth is when we say, 'We’re not comfortable with the status quo.' We want to be disruptors. We want to be changing how folks go about banking. That was all born out in our relationships with fintechs.”

It's also given the bank confidence to build its own software someday. Ramon said there is a lot of subpar financial services software that is not user-friendly and based on old, stodgy systems that are hard to integrate, making the data inaccessible in some cases.

“Our software development teams are focused on things like automation, and we’re also building custom applications for our customers to use, like the experience around applying for a home loan or the experience around opening up a checking account or a savings account,” Ramon said. “We started to take those over and we're replacing the third parties that were charging more and more and more for their services, because they could. They were entrenched in all these banks."

NBKC Bank’s latest internal release is a new application that allows retail and commercial clients to open bank accounts through automated systems. It has robust fraud detection in place. It aimed to make opening a new account have a seamless onboarding experience that keeps bank employees from having to do repetitive tasks.

“We’d like to get to a point where none of that human back-and-forth interaction has to happen,” Ramon said. “We're building these automations, and it’s making it different in terms of where we direct our staff and how we withstand fluctuations in in the market. For instance, the interest rate environment had naturally caused surges in areas like home loans. We want to be able to withstand those surges and absorb them without having massive swings in head count."