NOVEMBER 202419The Challenge (Risk) Integrating Fintech partners and their business needs into our bank's risk management programs is a multifaceted challenge.·Multifunctional Execution: Successfully onboarding a Fintech requires synchronized execution across treasury management, IT, compliance and risk, BSA, vendor management, fraud prevention, deposit operations, legal, cards, and payments--all under strict deadlines.·Project-Based Pressures: Unlike the traditional model where these functions respond to gradually evolving customer volumes and needs, Fintech onboarding demands that these risk functions provide a comprehensive "all clear" before hundreds of customers are onboarded at once.·Increasing Regulatory Scrutiny: The regulatory landscape is shifting towards greater oversight of BaaS providers, raising the stakes of effective compliance.·Heightened Fraud Risks: The rise in fraud threats necessitates careful consideration of the additional layer of vulnerability introduced by a Fintech intermediary, particularly in areas like anti-money laundering (AML) and fraud detection for wire and ACH transactions.Overcoming Constraints:Academy Bank is actively pursuing the future benefits of innovation while balancing current operating expenses. "One of the primary concerns is managing the real expense of increasing staff before realizing revenue, especially when the specific skills needed for smooth onboarding remain uncertain," said Holewinski.Neartech: A Solution in MotionAcademy Bank is deploying a "neartech" team-of-teams approach, integrating subject matter experts in various risk and operations departments into the Fintech project to ensure timely progression. This strategy operates on several key assumptions:·Resource Flexibility: Commercial banking departments, including treasury management and credit analysts, can provide part-time resources to fill gaps in Fintech staffing. Processes and approval tools used in commercial lending are being adapted to streamline Fintech evaluation, underwriting, and onboarding.·Talent Development: By engaging existing talent, we solve immediate challenges and develop employees into innovators and leaders.·Building Expertise: Collaborative work on high-value projects fosters a virtuous cycle of deep learning, skill enhancement, and cross-departmental networking.The Neartech concept, which came out of the Bank's Innovation Hub, is a shared resource collaborative model that supports the Fintech onboarding process, while subject matter experts in risk, IT, and operations play the lead role in providing the technical expertise unique to their functions and ensuring that people, processes, and technology are aligned to deliver an excellent customer experience. And they now enjoy the support of skilled bankers who help guide deliverables and approval timelines.Cultivating Innovation and Collaboration:Beyond project facilitation, Neartech is instrumental in fostering a culture of innovation within our bank. By involving key departments, we're breaking down silos and creating an institutional knowledge and people network effect that integrates Fintech deeply into our operations.·Fractional Resource Redeployment: Expands capacity without increasing headcount while keeping critical projects on track.·Tech-Savvy Engagement: Neartech enhances the technical proficiency of our bankers, positioning them--and the bank--for success in a more technologically-driven future.·Enhanced Communication: A significant, indirect benefit of this initiative is the shared language and understanding between our IT leaders and broader bank leadership.In essence, Academy Bank's Neartech approach exemplifies how leveraging internal resources strategically can bridge gaps, drive innovation, and prepare the bank for a competitive, tech-savvy future in the industry."Navigating innovation within the strict confines of banking regulation demands more than just ambition; it requires a delicate balance of foresight, agility, and unwavering commitment to compliance and doing things right," said Holewinski. "At Academy Bank, we've learned that the key to leading in this space is not just about breaking new ground but about building a solid foundation that supports both innovation and security. As we continue to evolve, our success will be measured not just by the partnerships we form but by the trust we maintain and the value we deliver to our clients and stakeholders." BCInnovating in banking is akin to redesigning an airplane mid-flight--every change must be meticulously planned and executed, all while ensuring proper risk management protocols are in place and maintaining trust
< Page 9 | Page 11 >