Niamh Kristufek is the head of US business banking at BMO Harris Bank. Her team services about 2 million consumer and small businesses with products, digital capabilities and experiences to help them reach their financial goals.
Niamh joins us to discuss BMO’s support of women via its collaboration with the 1871 Innovation Program. The partnership launched the first cohort of the WMN•FINtech program, specifically supporting female entrepreneurs in fintech with resources, programming, and mentorship.
Getting started in banking
I’ve been in banking for 25 years. I started right out of college. It was always my passion, because growing up, my dad owned his own business and I used to go into the bank with him. I knew his banker. So I was always fascinated in the partnership between the entrepreneur and the bank and the role the bank had to play in it. I always kind of knew I wanted to go into banking.
I started as a bank teller way back in the day when I was in high school, went into commercial banking right after college and then worked my career through that process.
Growing up in small business
When you’re part of a self employed household, there isn’t really a line between work and life. I always know that our small business owners go to bed at night thinking about their family and their work, their employees, and how they’re going to pay their own family’s bills. They’re one in the same. Growing up, dinner conversation was often about the project that was being worked on through my dad’s company. My brother worked for my dad, I worked for my dad, friends worked for our dad. So it’s always just so intrinsic a part of your life.
I think I take that to work with me knowing that when you’re talking to a small business owner, they’re up at night worrying about their family, but also their employees, families, and they’re also worried about how do they stay relevant, how do they stay open, and how do they stay secure? And so I always say a good banking relationship means that it’s during good times, we are so symbiotic that you don’t really think about meeting us until you need us. But when you need us, we’re there, resilient and a real partner to help you make real financial progress.
Serving small businesses during Corona
Our book keeps changing because of COVID. We serve 2 million customers in the retail business space for consumer and small business across our eight state footprint, primarily in the Midwest, Arizona and Florida.
How small businesses are doing right now depends on the type of business. A lot of small business owners have the ability to pivot quicker, because they’re not moving the Titanic. And so a lot of our great customers have really come up with success stories on how they went digital, how they revised hours, how they use the PPP program to really build a bridge.
But you know, there’s always going to be certain industries that are a little harder. We know that in the restaurant industry, takeout food can only bring them so far. So it’s a matter of what’s their resiliency plan now? When we see and we talk to them, it’s more about their liquidity position, how do they work better with us with their partners? Are you talking to customers about better terms? Are you talking to vendors about better terms?
SMBs going digital
I think digital is such a critical channel for the small business space, and for banking in general. But for small business in particular, if you think about a small business owner, a small business owner wears many hats. They’re running their business, they’re the primary salesperson, they’re probably doing the books at night, and so they need seamless digital experiences.
And they’re experts in what they know. They’re not experts in everything. No one can be an expert in everything. But they also don’t have the massive support networks of a large corporation. So when we look for innovation in digital, a lot of times we’re looking for, how do we give robust solutions to our clients, whether they be the consumer or the small business space? Where we can really help them make financial progress in ways that are not our wheelhouse, or are nice extensions of what we do from a financial services way?
The role of fintech
There are fintechs out there and service providers that are customer centric, and looking to help our customers make progress in a digital way that is more integrated into their life and seamless and frictionless. We’re always looking at it with a lens of how does digital free up our resources so we can be more human when they want human contact, but make it easy when they want digital.
It’s more about differentiating ourselves based on our expertise and what we know. If there’s someone out there who’s doing it better, and we can buy that service, we’re willing to buy that service if it’s not a differentiator for us, because building is not always the answer. That’s why fintech partnerships are so valuable to us because it goes back to that small business owner — respect the expertise of who knows what they know, and then look for those valuable partners that help us push forward into the space.
Innovation partnership with 1871
We have been partnered with 1871 since 2017. 1871 is synonymous with innovation in Chicago and supporting the fintech community. In 2019, we actually spread it to more of a national reach. So it wasn’t just Chicago companies that were in our cohort. And then this past year, we did a woman founder cohort for the first time.
We did that because we were excited to bridge that gap. As we see women founders not really competing at the same level these days with their male peers — only about 20% of first round fundings went to women founders in 2019. When we asked 1871 if they were willing to go with an all-women cohort, they were excited about the idea, and we just forged ahead.
The WMN•FINtech program
The WMN•FINtech program is a three pronged program. First, there’s a mentoring program. We now have two layers of mentoring. One is a mentor of a banker, here at the bank, who really works with them kind of on day-to-day business questions, financial questions, gets to know the company. And then there’s also an executive champion. And that’s a new layer we added in this year. All the companies have been assigned a different executive in the bank. and the value of that isn’t really getting into the weeds of their business plan, what they’re working on, but more about having an executive they can talk to about strategic initiatives in the bank that might have a much broader sense of where we’re going.
Just getting them used to talking to executives at large companies is a different skill set. We’ve gotten the feedback that they’re really excited about having that experience. And they’re all women because we’re a bank that prides ourselves with a lot of senior leaders who are women — 10 years of the Most Powerful Women in Banking Team. So, we had a lot of executives to go and ask to participate.
Then 1871 brings another level of programming called their PYROS programming. That’s 13 weeks of workshops, seminars and one-on-one mentoring of their expertise that really focuses on growing their customer base and how they attract and grow their investor base, specifically in the fintech area.
And last but not least, we have BMO programming that is topical. One of the major ones is a class specifically on the essentials of sourcing and supplier management. So what is it like when you become a supplier at a large company? What does vendor management look like? What does the risk process look like?
We really look at the success rate of the companies that we’ve done in the past, that they’ve been able to grow and sustain and expand. For us, it’s about the longevity of the companies. 1871 has 650 alumni businesses, and we have created 11,000 jobs. And we like to say we’re a tiny part of that. And so we look at our past cohorts and
Women-led companies in this cohort
We had 10 finalists, and then we had five companies selected from the finalists group. And they all have in common that they’re there to assist our customer base in some critical way.
The first one is based here in Chicago. It’s called Expand HR. HR is hard. HR is tricky. And so this company specifically works for the small business owner to have better HR experiences for their employees and stronger compliance through digital channels. As the head of small business, I’m a little passionate about that one, and I can get behind that.
We have another one called Hope Trust, which is in New Jersey. This is an interesting company because they offer trust services and care planning for families that have a family member with special needs. Special needs trusts are something you have to set up, so care can be taken on by someone else. That’s something that everyone has to do with a special needs child or even adult in their life. This makes it automated and digital using the expertise and proprietary technology they created. That one clicks close to home because I have a special needs child.
And then our next three companies are all similar with slightly different technology and slightly different target markets and methodology. It’s Plinqit in Michigan, Pocketnest, also in Detroit, and then The Wealth Factory out of Washington, DC. And they’re all around financial literacy, financial education, tools, training and digital platforms, because we know from studies that people know what to do, but they don’t get over the hurdle of doing it. We all know we should save for a rainy day, but Americans in general, myself included, don’t save enough for a rainy day.