Independent Banker - September 2022 - 24

PORTFOLIO INNOVATION STATION
Agtech's innovation
opportunities
By Charles Potts, ICBA
fl ow, becomes a natural by-product.
Farmers and Merchants Bank in
Milligan, Neb., serves as an example.
Just before the pandemic, the
$130 million-asset bank implemented
remote signatures, empowering
farmers to e-sign loan documents and
return them electronically to the bank.
About six months ago, the bank also
hired a remote loan offi cer who makes
" farm calls. " The loan offi cer takes the
paperwork to the farmer and reviews
it before scanning and submitting the
documents via secure email. The bank
is also considering a video chat-based
app that will allow it to host secure
virtual meetings.
he COVID-19 pandemic placed
unprecedented stress on food
supply chains, with bottlenecks in
farm labor, processing, transport
and logistics, according to the
Organization for Economic
Cooperation and Development, and
these challenges show no signs of
letting up. Against this backdrop,
agtech-the application of technology
to every aspect of the food production
process, from farm to table-is
growing in importance to the mission
of ICBA and community banks.
As ICBA reported in March of this
year, community banks with less
than $10 billion in assets provide
80% of all ag fi nancing and are often
the catalysts for new and expanded
business opportunities within their
communities. In fact, community
banks provide about $155 billion in
agriculture loans.
Despite the demand, the loan
process in the agricultural sector
remains predominantly manual. This
presents an opportunity to apply
T
advances achieved in other lending
areas, especially commercial lending,
to transform ag lending.
For example, by applying artifi cial
intelligence (AI) to analyze data and
create standardized processes that
include benchmarking and lending
risk assessments, community banks
can enhance the eff ectiveness and
effi ciency of the loan process for the
agricultural community. Innovations
like these, applied to the farming
industry, can accelerate the lending
process for farmers, saving them time
and money.
Often, community banks sit
in the middle of the ecosystem,
providing point solutions to various
participants in the agricultural
process-from the farmer and grower
to the processing and transportation
sides. The opportunity to create a
cohesive end-to-end supply chain
and enterprise resource planning
system, where community banks can
be the facilitators of moving money,
removing friction and improving cash
As opportunities in agtech ripen,
ICBA is exploring innovations targeting
this market segment. To that end, ICBA
is asking its community bank members
to help identify potential agtech
applicants for its 2023 ThinkTECH
Accelerator Program.
Start by talking to your agricultural
customers to identify areas of friction,
pain points and opportunities to
improve the speed and effi ciency of
the lending process. Then, share that
information with ICBA so we can fi nd
and source potential solutions and
providers.
No technology barrier should
preclude a farmer and lender from
improving the speed, effi ciency and
eff ectiveness of the lending process.
The demand is evident. Finding
innovative ways to harness what we
know to provide more effi cient and
eff ective approaches to addressing the
needs of everybody involved in the
agricultural ecosystem is the shining
light of opportunity. 
Charles Potts (charles.potts@icba.org)
is ICBA executive vice president and
chief innovation off icer
24 Q ICBA Independent Banker Q September 2022
Photo by Enigma Images/iStock
Independent Banker - September 2022

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