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Jo Ann Barefoot explores how to create fair and inclusive consumer financial services through innovative ideas for industry and regulators

A New Breed of Community Bank: My Fun and Fascinating Conversation with NBKC

Barefoot Innovation Podcast

A New Breed of Community Bank: My Fun and Fascinating Conversation with NBKC

Courtney Cole

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If you’re ready for a breath of fresh air, today’s show is for you. It’s fun, it’s fascinating, and it’s filled to the brim with ideas that many of us haven’t heard before.

NBKC bank is a community bank that thinks and acts like a start-up company.  My guests are its CEO, Brian Unruh, and Zach Pettet, who is the bank’s Fintech Strategist and who heads its Fountain City Fintech affiliate, which is the first “partnership accelerator” run by a community bank.

We were nowhere near Silicon Valley or New York, or London, or Singapore. The KC in NBKC stands for Kansas City. That’s in Missouri. As our US listeners know, that’s in the American midwest, the heartland. It’s more than a thousand miles from either the Pacific coast or the Atlantic coast. And the bank isn’t big, as banks go. It isn’t new, either. It’s been there for a long time.

And yet, and yet, NBKC is completely overhauling its business model, its strategy, its culture, and its future, for the digital age. And in the process, as our conversation clearly shows, they are having a very good time.

Part of their strategy is that they’ve joined the growing ranks of partner banks that are supporting fintechs. Some time back, we did an episode with Gilles Gade, CEO of Cross River Bank, which is a leader in that space as well. NBKC has developed an original format for this work, by launching a fintech accelerator as part of the strategy. Zach explains that he talked with about 150 start-ups within the first few months in his role. Part of what he heard were what he and Brian call the “horror stories” of start-ups trying to work with large banks. Big bank diligence and onboarding processes often leave these companies waiting a year or more for approval, while their capital dwindles and their runway disappears. (We’ve done two shows with large bank accelerators that are also working on this challenge). At Fountain City, NBKC is solving it with the accelerator. It enables them to attract the most interesting companies, understand them quickly, help them address any weaknesses, and either move them into a partnership relationship or, alternatively, reject them, especially if the company doesn’t take regulatory mandates seriously. Zach takes pride in getting to no very rapidly, if no is going to be the answer, to conserve innovators’ precious time.

We talked about their 2018 cohort in the accelerator, and what they are looking for in their next round -- again, they’ve been partnering with some of the most exciting companies in the space. They share extensively about how they designed and run the program, with help from a law firm and in consultation with their regulators. Brian attributes their success in this to the bank’s transparency about what they are trying to accomplish, and to their authenticity in working with these partners.

One fun fact -- Zach has recently launched a podcast show of his own, called For Fintech’s Sake, and has asked me to be a guest on it. So be sure to watch for that and follow his show.

Brian says NBKC has always been entrepreneurial. They actually banned traditional banking conferences for their executives a while back, in favor of attending technology conferences like Finovate. I laughed out loud at their description of what goes through their minds when they see someone at the bank wearing a suit.

Links

Link to full transcription

Finovate

Fountain City Fintech

NBKC.com

Barefoot Innovation Podcast: How to Digitize a Bank: Citizen’s Lamont Young

Barefoot Innovation Podcast: Innovation at a Small Bank: Radius CEO Mike Butler

Barefoot Innovation Podcast: Innovation and Community Banks: Eastern Bank CEO Bob Rivers

Onward

American Banker Article: What This Community Bank Learned From Its Fintech Accelerator

Twitter: @brianunruh @zachpettet

Emails:  zach.pettet@NBKC.com, brian.unruh@nbkc.com

More on Brian Unruh - Co-founder of NBKC 20 years ago

More on Zach Pettet

More for our Listeners
I hope you enjoyed today’s show. Remember to leave us a five-star rating on your podcast platform so we can help more listeners find the show. Also come to our website to subscribe to Barefoot Innovation -- the newsletter, podcast and updates, and please follow me on Twitter, LinkedIn, and Facebook.

We have great episodes coming up. We have an amazing conversation with Prince Michael of Liechtenstein. We recorded with Rob Frohwein and Kathryn Petralia of Kabbage at LendIt. We’re talking with Counselor to the Secretary of the Treasury, Craig Phillips, and with the outgoing Chairman of the CFTC, Chris Giancarlo -- his second show with us. We’ll talk with MIT’s David Shrier; with Gary Shiffman of Giant Oak; with Dale Nirvani Pfeifer of Goodworld; Vinny Lingham of Civic; Karen Mills with Harvard, as well as the Aspen Institute and Prudential.  

And guess what -- we’re coming up to our 100th episode. We’re planning something extra special for that milestone!

I’ll be speaking at quite a few private events this spring. If you’re interested in booking me, contact jay@provokemanagement.com.  Some of the public places I’ll hope to see our listeners include:

LendIt FinTech USA, April 8-9, San Francisco, CA -- I’ll be on the main stage doing a fireside chat with CFPB Innovation head Paul Watkins and outgoing head of the California Department of Business Oversight, Jan Owen.

Santa Fe Group’s 12th Annual Shared Assessments Third Party Risk Summit, April 10-11, Washington, DC

The Innovate Finance Global Summit, April 29-30, London

Comply 2019, May 14-15, New York, NY

Bank Director's Bank Audit & Risk Committees Conference, June 12, Chicago, IL

American Banker Association’s Regulatory Compliance Conference, June 9-12, New Orleans, LA

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The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.