Today, we are talking with two winners of Tearsheet’s Bank/Fintech Partnership Award for Digital Transformation, Midwest BankCentre and MANTL. We’re joined by MBC’s President and CFO Dale Oberkfell and Nathaniel Harley, CEO and co-founder of MANTL.
We discuss the collaboration between the two firms on Rising Bank, a new digital brand launched by MBC along with MANTL. The company hit its one year deposit savings goals within five months and both parties are continuing to pursue the benefits of partnership to go deeper.
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The following excerpts were edited for clarity.
The beginning of the digital journey
Dale Oberkfell, Midwest BankCentre: Our digital transformation began about three years ago. I was at a meeting with a consultant who discussed two types of change: standing up an entirely new environment with new technologies versus a slower change that's made in place. That lit the fuse and helped me envision that approach of setting up a separate brand as a laboratory where we can do business in this digital environment, learn how to do it, and then migrate those learnings to the other side of the bank.
Time was on our side. Certain technologies made it easier to plug in to our core processor, Jack Henry. Another consultant recommended we talk to MANTL. That's where our discussions started. We started very aggressively working on this project in late May 2018. We rolled out this new experience in February of 2019. So, it goes back a ways but it really accelerated as we started identifying our vendors like MANTL.
Nature and scope
Nathaniel Harley, MANTL: When we first met Dale and MBC, we were excited for a variety of reasons. They were thinking about their digital branch in exactly the right way. The strategy they had when we first met was to stand up a digital-only brand as a complement to their 113 year old community bank brand. That was an exciting opportunity for us because it allowed them to jump into this digital branch environment without having to fully reinvent their legacy bank and brand at the time.
They also came to the project with very clear objectives. Often, when we speak to banks, they don't always have a clear outcome in mind. They don't know what to do with these new deposits they're trying to raise. Dale and his team were very outcome-focused from the very beginning. So, we were able to set very clear goals and basically determine how to judge if this project is successful.
Dale Oberkfell, Midwest BankCentre: The most important thing was that, as a community bank, we needed to rely on our core. So, it was important for our vendors to be core-agnostic and have enough experiences to help us with the right questions, so we could have choices in our decisions. Our problem is that we don't always know the right questions to ask with this technology. MANTL was a great partner in that regard.
Nathaniel Harley, MANTL: I don't think we had any issues from the get go. We both shared the common goal of moving quickly and agilely. Everyone at MBC was onboard. One of the things we recommend to banks we work with is to involve key stakeholders from the beginning.
We also take a very consultative approach. That sometimes means pushing back and challenging the notion of whether you really need to ask for a drivers license in the main flow. Or whether you only ask for that with high risk customers. Our job is to provide the tools for banks to grow core deposits online and reduce costs. We also give them data and information to make data-driven decisions. Technology is really only useful when it generates outcomes and the results you're looking for. So, focusing on these outcomes, we really understand that our success relies on MBC's success. This allows us to guide our banking partners in the right direction.
Dale Oberkfell, Midwest BankCentre: Our initial target when we engaged our partners was to generate $100 million in deposits in the first year. That's nothing other than looking at our constraints, our capital and size. We have to build our process within our capital growth and that drives our growth strategies. We went out looking for a new brand.
We couldn't use many ideas because they've been used or were currently in use. What it came back to is this concept that we use in our marketing, 'rising together'. It's something we do -- we want our customers to rise with us. All of a sudden, the word rising popped out of that tagline. We found out that Rising Bank is probably a good name and it actually aligns with MBC's marketing. It's unique how we went out to look in so many places and that we came back to something we really are already.
KPIs and objectives
Nathaniel Harley, MANTL: MBC set a goal to replace wholesale funding. I think their goal was $100 million in deposits in the first year. They wanted to upgrade their tech of their legacy bank and to build that competency internally. They also wanted to avoid cannibalizing their current customer base. Lastly, they wanted to attract a younger demographic.
MBC raised 75 percent of their deposit goals in 10 weeks and got to $100 million in 5 months. They ended up slowing down their marketing. I believe they ended the year 30 percent above goal, which is pretty powerful. That created a predictable way to raise core deposits at a lower cost than wholesale funding. They got really comfortable opening accounts online and I think the eventual goal is to roll that out to MBC.
We geofenced all the marketing outside of the St. Louis area so that the vast majority of the people came from outside the region. They ended up with 6 percent of all new accounts from people under the age of 25. That was a big increase.