Summer Series: Best of Conversations with Banking Leaders, Pt II

In our special summer series, we’re revisiting some of our illuminating discussions with banking leaders featured on the Believe in Banking podcast. In this episode, we’re talking technology with Jimmy Stead, Chief Consumer Banking Officer at Frost Bank; Luvleen Sidhu, Founder and CEO of BM Technologies; and Todd Nagel, President and CEO of IncredibleBank. These leaders discuss their individual approaches to banking technology focused on simplifying and streamlining transactions, but more importantly on making people’s lives better. Whether financial institutions build it from the ground up or partner with another company, having a digital and mobile strategy in banking is now a must for all banks and credit unions – even if they don’t have the big budgets of the big banks.

Text Transcript

Intro: This is Believe in Banking, a podcast series for decision makers, influencers, and leaders, featuring experts taking on the financial industry’s most pressing issues, with insight and empathy. The podcast features information and conversations designed to enlighten and empower. Here are your Believe in Banking hosts, Sean Keathley and Gina Bleedorn.

Sean Keathley: Welcome to our Believe in Banking podcast. I am Sean Keathley, President and CEO of Adrenaline. In our last podcast, we featured banking leaders, sharing their thoughts on some of the biggest challenges in banking, including how community banks can compete with the big banks and even deliver on customer expectations in this new 24/7 world. In this week’s special episode, we’re going to feature some of the best thinking from banking leaders. We’re also going to dive deeper into this always on aspect of banking, and talk about technology. And whether you build it yourself or partner with others, there’s no doubt that digital and mobile proficiency is table stakes for banks and credit unions, even if you don’t have the big budgets of the big banks. Consumers want the efficiency that digital provides, and these leaders discuss how they’re delivering.

Sean Keathley: This week we’ll hear from Jimmy Stead, Chief Consumer Banking Officer at Frost Bank, Luvleen Sidhu, Founder and CEO of BM Technologies, and Todd Nagel, President and CEO of IncredibleBank. We’re happy to return to these informative and illuminating discussions, thinking about the modern consumer banking experience, and we hope you enjoy.

Gina Bleedorn: Jimmy, it’s funny to hear you say that. And I say funny, because it’s such a wonderful and valuable customer seamless-ness feature where you’re reducing friction, that very few banks have actually employed, but other industries have started to employ, and once a consumer experiences it in another industry, they start to transfer those expectations to all industries. And it’s wonderful that you are doing it in banking whereas we know the expectations and delivery of a lot of technology oriented service deliveries are somewhat behind other industries. Tell us about your unique background at Frost, how you come from digital but that has propelled you into the role you are now in over all of consumer banking, and the importance of digital as it plays a role now, in that foundation plays a role in your job, very big job, at the bank?

Jimmy Stead: Yeah. So it might surprise you, I actually came out of school, I’m a hometown boy, went to school in the same city I grew up, with an accounting degree and most of the people in my life thought I was going to be a CPA and have a long career in accounting and finance, because it was just kind of something that came natural to me. But for me, I wasn’t happy. I was really missing something. And it was sort of a sense of purpose, that meaningful mission that we’re all kind of looking for and motivated by. I just didn’t have that when I was doing that job. And so I was pretty lost for a while and I was a pretty motivated and driven kid, so for me to be lost, it was a little unusual.

Jimmy Stead: But I found Frost Bank. I knew them to be a good company. I didn’t know a whole lot about them. They gave me a job as a personal banker, as a part of a leadership development program. Fast forward 21 years, I’m still here, and loving the work I get to do at Frost and the people that I get to work with, but in that journey, really, the pivotal thing that changed everything for me and really engaged me was about the time that I started was the time that our CEO at the time, Dick Evans and some of the other executives, they decided to build online banking in-house, which really for a bank our size back then in 1999 was a major decision. It was very unconventional and Dick’s quote from back then, Dick Evans our CEO, his quote, and it’s famous inside Frost was, “I don’t want a vendor between me and my customer/” Which really set the stage and I was so lucky to be a part of the initial team. We just had this team that was going to figure it out.

Jimmy Stead: Through that process, I just volunteered to do things. I played as many different roles as I could. And I got to learn a whole lot about technology, both the internal workings of technology and the really technical stuff. But also I got to learn about the customer facing side and how you build technology for people that makes their lives better and simplifies things. I got to be a student of what it takes to build a great team that can accomplish something great like that. And one of the things I really learned through that whole process that’s really driven me, that I find motivating, I talked about having passion earlier. I think rooting out complexity and trying to simplify things is my favorite thing to do. And that’s really about what building technology for people is about in my opinion. And so I’ve got a lot of experience doing that.

Jimmy Stead: Another sort of exciting event was back in 2011, when we decided to build our mobile app, we had over a decade of experience at that point and we brought together a small team of people. And I think we’ve produced something really special. It’s kind of Malcolm Gladwell’s 10,000 hour rule. We had learned and we had practiced and we had made mistakes and over time we’d gotten better and better. And then we put this little team together and we built an app in nine months. And the first week we had over 10,000 downloads, we had a five-star rating, and it was just a really great experience, but it went back to we had had a decade of experience at that point.

Jimmy Stead: So to get back to your question, Phil asked me to lead the consumer bank. It is definitely a non-traditional choice of the guy that kind of grew up and then led digital for a while. And I think really the idea there was to bring that personal experience, that magic that our people have with our customers, that connection they have closer to the digital experience, which was also really strong and good, and we needed to bring those things together.

Jimmy Stead: And then a couple of years later, Phil also asked me to lead the IT department. So that started earlier this year in January. And boy, it’s been exciting to have an even wider view, understanding the sense of urgency we have to have to have modern, nimble technology that can power the company and make experiences for our customers simpler and better. It’s really a high stakes thing.

Sean Keathley: Well, Luvleen, and thank you. This is going to be exciting conversation. We’re going to jump in. Our listeners are dying to hear what you have to say. Your story is so unique, both personally, but also for BM Technologies and BankMobile. Tell the listeners about the story, how did the company come about, and talk about just the dramatic growth and all the success that you’ve been experiencing since then.

Luvleen Sidhu: So we started BankMobile, which BM Technologies was formerly known as BankMobile until we went public earlier this year, and BankMobile really started with the premise that banking could be better. It could be substantially better, especially around a few things. Number one, affordability, transparency, more consumer friendly products. And was there a way to really deliver banking where we were solving for these consumer pain points and also solving for the inefficiencies of the actual business model of banking, which is really much branch based banking? And so taking all of this into consideration, we wanted to be able to utilize technology to create a better banking experience for millions of Americans. And that’s what we set out to do a little over six years ago.

Luvleen Sidhu: And since then we have become one of the largest digital banking platforms in the country. We have over 2 million account holders today. We are we believe the first neobanking FinTech to go public. And we are, we believe again, the first neobanking FinTech to actually be EBITDA positive and to have a path towards profitability.

Sean Keathley: That’s such a neat thing to think about because so many technology companies have lot of cash, but don’t make any money. I mean that’s that last point you were making.

Luvleen Sidhu: Exactly. And that is important because we believed when we set out that we’ve not only create a product that was more affordable, that was easier to use, but also had a growth model and a net income model that was at least equal to, if not better than traditional banks, and profitability was key in making sure that we fulfilled that mandate. And what has really allowed us to be profitable is the model that we pursue, which is a B2B to C strategy, and Banking as a Service, which has really allowed us fundamentally to be able to acquire bank customers at very high volumes and at very low cost. So today we’re acquiring a bank customer at less than $10 through our partnership or B2B to C model. And we’re also providing substantial value to the partners in this ecosystem of Banking as a Service.

Luvleen Sidhu: And what that is is that we enable them to utilize our technology to be able to roll out a full suite of completely branded digital banking products to their customers, to their employees, to better attract, engage, and retain them, to create more differentiation for themselves, to create an emotional connection. And we help them do this at really a fraction of the time, the fraction of the costs that it would take them to do it themselves. And of course, if they’re a non-bank, to be able to do this without having to become a bank. So that’s at a very high level, a little bit about our genesis and where we are today.

Sean Keathley: Amazing.

Gina Bleedorn: Luvleen, we met you back six years ago or more on that journey. It was shortly after the HireONE partnership and in the initial stages of Customers Bank, and even at the time we were working on some strategies to reach younger demographics, college bound students, post-college. Talk to us about digital first banking. You have certainly seen and are filling the gap between low and middle-income Americans and giving them affordable financial services. What do you think about that gap, how it developed, and what the future of digital first banking looks like?

Luvleen Sidhu:

When we first launched BankMobile, we were so excited to have you as a very close partner to help us with our launch. It’s definitely great memories that we had working with your team. And I’m so glad to hear that you guys are still doing well and spreading your knowledge and expertise to so many partners that you work with. So digital first, traditional banks have typically been branch based, and it’s really focused on geographic sort of physical location. And what’s really important in a digital world is to really create digital communities where there’s communities based on shared values, shared interests, shared needs, and that’s what technology really enables us to do.

Sean Keathley: So Todd, one of the things I think is really unique about IncredibleBank, and you’ve already said it, we do hear a lot from community organizations that the people makes them stand out, but we have not met organizations that take it to heart like you do. And I think both that and your digital background, I’m thinking both of those things perhaps prepared you for this last year that no one saw coming. So maybe talk a little bit about that, just the commitment in the culture, and how every single person believes in the bank, but also your digital launch, full decade ago, how did that dual strategy puts you in a position to succeed in the last year with all the headwinds of COVID and the challenges that your communities you serve faced?

Todd Nagel: Certainly, the timing couldn’t be better for the launch of a pandemic, as ridiculous as that sounds, because like the military we had to mobilize our entire workforce. And luckily we had a good portion of our workforce that was digital first, that was leaning digital first, however trying to create an incredible customer experience still. But we were set up very nicely having and being able to open up accounts online, unassisted by people. That definitely helped us. And then of course, when PPP came around, we literally had to set that product up overnight and we were ready to go before the big banks.

I love picking on big banks just because it’s easy, and we love competing against big banks because it’s easy. And when we set up PPP, we actually had customers from larger banks that we had been prospecting for a long time come over to us. And we were able to stand up some technology really quick, and given the size of our company, mobilize really quickly. And I think we opened something like 1500 checking accounts online in the first three months of the pandemic. And I know for sure we did 2300 PPP loans, all electronic because obviously our branches and lobbies were closed. So yes, having the platform being digital first. And then I think also being entrepreneurial helped out a lot.

Gina Bleedorn: What do you think you get from that physical channel and how do you leverage the physical versus the digital where you started to get the best return really from each and give the best experience to customers within each?

Todd Nagel: It’s a great question. Again, I think having started, which was 100% digital, you couldn’t go into a branch and open an account because no branches existed. And then having the legacy 50 year old, River Valley Bank brand, which was brick and mortar, hand-in-hand delivery, certainly was a challenge when we put the two cultures together. However, what’s been fun is I remember our mission statement that we came up with in 2019, and it was our 2021 vision, which was three years out, and that was to make all our transactional people into digital ambassadors. And I’m paraphrasing that.

Todd Nagel: And so we were talking about being digital ambassadors in our branches in 2018. I think that was, now looking back, that’s pretty forward-thinking. So our people really have transformed from being very transactional, come in, bring your check, deposit it, to being digital ambassadors. And what that means is we actually help more people with their mobile banking and perhaps set up these statements than we do actually cash checks. That was fun for us to be ahead of the game. It was real fun to take your traditional transactional banker and get them leaning towards the digital side and say, “Hey, you don’t have to abandon talking to customers, but if you get this digital, this mobile, this online banking skillset, you can really help customers move forward and cement the relationship.”

Outro: You’ve been listening to Believe in Banking, a podcast series created to empower decision makers, influencers, and industry leaders in financial services. Be sure to also join us on our flagship site,