Independent Banker - November 2020 - 95

Trailblazer
Bringing relationship
banking to fintechs
Nearly 120 years ago, Lincoln Savings Bank
was a one-branch ag bank. Today, it's a
leading player in the world of fintech enablers
and banking-as-a-service (BaaS), helping to
bring financial services to people across the
U.S. By Eric Best
hrough its latest initiative, Lincoln Savings
Bank is able to reach roughly 3 million new
customers. That's not far off the population of its
home state of Iowa.
But many of those customers aren't located in
the Midwest-far from it, in fact. The $1.4 billion-asset
community bank in Reinbeck, Iowa,
serves these customers through LSBX, its fintech
department. By offering banking-as-a-service,
or BaaS, to popular financial services apps like
Square's person-to-person payment Cash App in
San Francisco; investing app Acorns in Irvine, Calif.;
M1 Finance in Chicago; and Qapital of Stockholm,
Sweden; Lincoln Savings Bank has grown in
ways its local market hasn't.
" The number of relevant customers in our footprint
is decreasing, and so [we asked], what are we
going to do? " says Mike McCrary, the community
bank's first vice president and relationship manager.
" I started looking around [and asked,] what
would a digital-first community bank look like?
How do we remain useful [and] relevant within
our customer base 20, 50 years from now? There
was definitely long-term thinking. It's not hard to
come up with analogies for industries that have
been disrupted and what that's meant for them. "
The work started back in 2013 with talks with
CorePro, which offers solutions for digital banking
Quick stat
3
million
The number of
customers LSBX
reaches through
its fintech
partners
T
and other financial services to consumers,
businesses and other fintechs. Qapital was an
early adopter of CorePro, Austin-based Q2's open
application programming interface (API) core
platform. LSBX
uses the platform's
core solutions to
make working with
fintechs possible.
" Early on, I
think we were
willing to try and
Name: Lincoln
Savings Bank
Location: Reinbeck, Iowa
Assets: $1.4 billion
experiment, " McCrary says. " It's really difficult
to experiment in banking ... but you can do it
in small-scale, metered ways. One of the things
we brought to the table was that we were able to
make and maintain long-term business relationships.
These are highly engaged, highly involved
relationships. "
But these partnerships weren't forged overnight.
The community bank had a lot of due diligence
to do before onboarding, McCrary says.
This included looking at business plans, examining
the investors behind these companies and
sniffing out compliance or legal risks. It's not so
different to what the community bank's commercial
lending department does when it's forging
small business lending relationships.
" This is a venture that we're all-in on, " says
Kelly Flege, Lincoln Savings Bank's first vice president
and LSBX leader, " but not at the expense
of our traditional community bank relationships
and infrastructure. "
Lincoln Savings Bank brought on the technical
and regulatory expertise to make LSBX work. It
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Independent Banker - November 2020

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