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[Music] this is fintech futures reporting from finovate spring in san francisco and i'm joined by josh roland from lead bank how are you josh i'm great how are you i'm excellent thank you have you been joining the conference sir i really like it really like it's great to be in san francisco it's great to be back with people you know at one of these so happy to be here amazing um so just to quickly get started we want to give us a quick introduction to yourself and what you're doing sure lead bank is a community bank community bank based in kansas city missouri um we're about 780 million dollars in assets um i'm the ceo uh vice chairman of the bank and uh you know we do our geographically focused community bank work in the kansas city metropolitan area but over the last four to five years we've become very involved with fintech partnerships so now we serve national consumers across the country through fintech partnerships and we're very proud of that okay great so you're here speaking on a panel then about how community banks and credit unions can compete in the digital world so what would you say are the key challenges in facing community banks when it comes to digital transformation well i think the primary challenge is around mindset honestly um and mindset goes to even such things as like what you think the appropriate level of capital is for a community bank and then how you how you think about whether you're going to invest that capital in growth opportunities or you think that the capital ratio is itself just untouchable and uh banks community banks that are struggling with low growth in their domestic market in their kind of typical geographic market um need to get over that mindset um because the honest truth is that with the capital levels with the size of community banks we have actually an advantage in terms of how nimble we can be how responsive we can be and in fact the dialogue with our regulators is so is so good generally that we can do a lot if we can kind of get over the mindset that that yeah we want to compete but we really can't invest capital in the future and i think that's that's what i see right now okay and so how has lead bank then been looking to approach its own digital transformation journey well you know i think what we've said is it's critical we are a small bank in a very competitive banking market in our geography and years ago we said well what are the opportunities for next generation of of banking and the first thing is we did we said we have to get away from the idea that community means geography and so by doing that we started to look for partnerships that served the same kind of traditional demographic the sir same kind of client base that we were serving in our geography we needed to be able to say what are the opportunities to serve those businesses or those people who would ordinarily be our customers via technology so we've partnered with fintech companies on the front end uh who are doing the marketing and servicing of consumer-focused products um whether it's additional um whether it's credit builder products um secured cards or uh in some cases um uh consumer loans uh to try to enable that the second part of that though is to build out the infrastructure and so we've taken we've taken the learning that we've gotten from the individual partner relationships look you know taken that and said okay what do we need to do in terms of our core system how do we need to improve that so that we can ex so that we can then scale more rapidly in broad fintech relationships excellent so with how quickly then things tend to change in terms of the digital transformation kind of area um how has that been difficult for you in terms of like keeping keeping up with that change has it been you know have you tried to tackle that have you gone for doing a little a lot or i viewed them with more partnerships however you have your own school well i honestly i i might just challenge you on the idea that it's difficult okay or that it's changing so much the fact is that banks community banks in this country have the ability to do almost any service and the flip side of that is that we only do those services you know so if you think about that and you think okay well digital transformation means accessing more markets more client markets whether it's business or consumer which is what we do through digital then the question is i am going to incrementally build out a digitally transformed bank by looking at the verticals where i have opportunity so whether you say that okay well now crypto is the flavor of the month and everybody's going to be doing crypto the fact is i'm less motivated by that i'm looking at what are the services that we are particularly competent to provide as a community bank we know what those are because we've been doing that for 100 years or so so then we find partners and systems to enable us to scale those essentially across the country and that's that's just about finding the opportunity and then realizing that you're building a total universal platform through technology to serve banking clients and that those clients have their needs have not really changed and that i mean you've mentioned that i mean that customer relationship side of things is one of the key selling points for community banks um how have you been looking to focus in on that and what is it that community banks can offer that bigger players can't in that sense well i said it before i think it's essentially nimbleness and flexibility yeah and in some ways i might say it's a kind of a scrappiness that community banks the mindset that they need to get into which is that instead of sitting there and bemoaning the fact that the big banks and the fintech companies are coming in and you know taking our market share the reality is what are you going to do about it so to me the small size of a community bank the access to decision makers means that decisions can get made really fast and deployed quickly with the right kinds of partners if you find a fintech partner that actually understands the compliance and the kind of ethical responsibility of banking if they get that then you can really outperform much bigger entities because you have that you have that close proximity to decisioning and to implementation and that's been our uh that's been really the the recipe for our success in building these partnerships excellent and just to finish things off then what new digital use cases are you most excited by at the moment and are there any new developments that you tell us about at least well honestly i i think the i think the thing that i'm most excited about is compliance as a service um banks are great at compliance because we have to be we don't have a choice so instead of viewing that as a cost center let's view that as our market differentiator the fintech companies don't have the compliance mindset that we as community banks do okay so let's take that put a premium on that build out those services and then sell them as value-add not as an inconvenience because the fact is the fintech companies recognize that that is all they need they need that they don't need our user interface they probably don't like it they don't need our marketing they probably don't like it what they need is a safe sound reliable platform to bank from so what we need to do is double down on our investments in quality people expertise and technology in compliance so that we can charge a premium for the for the sophistication and the robustness of our compliance platforms that's where we're going to put our money that's what i think is interesting great thanks so thanks for that josh thanks for having me it's a pleasure it's a pleasure excellent thank you [Music]