January 29, 2021

A lot of people, including me, care about community banks. They are much more than providers of financial services. They are the backbone of their communities. That matters now more than ever, as many of these communities are struggling, especially in the pandemic. These banks know their markets deeply, which both inspires them, and enables them, to serve their consumers and businesses in unique ways.

As a sector, they are also in trouble. Their numbers are dropping every year. Compared with either large banks or with fintechs, they face daunting impediments. It’s a complex challenge, but arguably their biggest obstacle is in modernizing their technology, to meet the demands of today’s customers and to streamline their operations to capture efficiencies, so that they can compete effectively with big firms that have economies of scale and with small startups that were “born digital” and have much more efficient cost structures.

Today’s guest offers one solution for them. He is Nathaniel Harley, the CEO of MANTL.

In our conversation, Nathaniel starts by noting that fintechs have now surpassed bank branches in opening first-time bank accounts. MANTL aims to help reverse that trend by giving banks an easy way to offer a first-class onboarding experience for their customers.

As with so many other things, COVID has sharply accelerated the need for new technology. Nathaniel shares the striking numbers of customers shifting from branches to online channels, and especially to large banks’ online services, since the pandemic began. Many community banks have taken up the challenge, using 2020 to take the leap to high-tech onboarding. Increasingly, they see new tech adoption as an investment rather than an expense. Some also see it as a way to expand beyond their local footprints, which can be invaluable for institutions in slow-growth markets. Nathaniel talks about what prevents banks from making this shift, the characteristics of the banks that do, and the culture battles that can accompany the transition.

When talking about the future of community banks, the elephant in the room is their dependence on legacy core IT providers. Nathaniel has opinions on that technology, the contracts, and its impacts on customers. He shares striking numbers about customer drop off rates in account opening. Consumers today, in their first touch interacting with a new bank (or anything else) instantly size up tech. They know whether it’s good, or whether it ‘s old. If it’s old, and it’s clunky and frustrating, they don’t persist. They walk away immediately to find something better -- since better options are all around. The main solution for this, Nathaniel thinks -- as do I -- will be banks and fintech firms working together.

On that, he has thoughts for regulators as they ponder how to make that happen. This includes insights on the FDIC’s important initiative to explore creating a public/private body to set up standards and a certification system to make it easier for community banks to work with tech companies.

More on Nathaniel

Nathaniel Harley is the CEO and co-founder of MANTL, a technology company helping banks and credit unions grow. Founded in 2016, MANTL aims to level the digital playing field for smaller financial institutions. The company has helped banks raise billions in core deposits with its high performing account opening solution. In addition to leading the firm, Nathaniel serves as an Angel Investor for Koral Ventures. He earned his bachelor’s degree in Mathematical Methods and Social Sciences from Northwestern University (Kellogg).

More for our Listeners

Please follow AIR on LinkedIn and Twitter, and also follow me personally on Twitter @JoAnnBarefoot. And be sure to leave us a five-star rating on your favorite podcast platform.

Watch for some great upcoming shows. They include Susan French of BBVA, Maria Gotsch of Partnership Fund, Mike de Vere and Teddy Flo of Zest, Pindar Wong of VeriFi, Rob Nichols of the American Bankers Association, and Sharmista Appaya and Ivo Jenik of the World Bank and CGAP, respectively.

The 2021 virtual events and conferences are also coming onstream. I am excited to have been chosen alongside Cleve Mesidor to speak at South by Southwest on “Diversifying Tech.” Make sure to register and join us! I will also be speaking at #ACCERATERegTech2021 in March. I’ll speak at both Harvard University and the US Treasury in February. And I’m looking forward to speaking at LendIt, in April. I’ll hope to see many of you at these great gatherings.

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