‘One of the few launches where we got unsolicited positive feedback’: How nbkc gets more out of the fintech partner selection process

The following was produced by Tearsheet Studios. We worked with fintech software provider Autobooks to create a four part podcast series on the evolution of business banking and how banks can better service SMBs through a changing mindset, partnerships and integrations. Listen / read our first installment of the series here and here.

The old paradigm of banks versus fintechs is getting tired. The truth is, both sides of the industry have been partnering successfully for years and they’re finding new ways to partner. Finding ways to collaborate that bring the best each has to offer. That creates value to both parties beyond what each can do alone. 

nbkc is a 22 year old bank serving the Greater Kansas City region. The community bank has used partnerships with fintechs to go digital -- with mortgages and more recently, with consumer and business savings and checking accounts.

Evan Ashcraft is vice president of product strategy at nbkc. He joins us on the podcast to discuss how banks can get more out of the partner selection process, avoid common pitfalls, and prepare for a successful launch.

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The following excerpts were edited for clarity.

Evan Ashcraft, nbkc: I like to say we're a community bank with a nationwide footprint.

That’s Evan Ashcraft. Evan is vice president of product strategy at nbkc. 

Evan Ashcraft, nbkc: What that really means is I get involved in a lot of different things within the organization, trying to help figure out ways to better solve the customer experience through our product offerings.

We believe in best of breed scenarios. We partner with different partners to solve whatever the best of breed problems we're trying to solve.

When deciding on partners, Evan leads the selection process. The process includes some key decision makers and various steps to get to a successful partnership.

Evan Ashcraft, nbkc: To be honest, it's an ever changing process, as we continue to grow and expand our offerings. Our products and services tend to overlap in different ways. So we try to establish a kind of a long term strategic outlook, but what we are trying to achieve objectively is to identify requirements, challenges that we're trying to address, whether they're from a customer standpoint, business experience standpoint, or from an operational need, or clients need, etc.

My job is to help identify tools and services that we can partner with and build on, and work through that process to production.

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As banks get more practice at partnerships, they’re picking up some valuable learnings. Sure, they’re getting better at anticipating legal and regulatory issues earlier in the process. But they’re also able to think more strategically

Evan Ashcraft, nbkc: I think, by and large, banks are good at making sure that the things they select work and meet fee compliance and regulatory requirements. Banks tend to be relatively conservative on the technology side of things. The reality is we're a little bit slower at adapting or innovating things.

From a distribution standpoint, fintechs that have been around for over a decade or longer. They have challenged the industry and you're starting to see institutions being more aggressive as a result. Fintechs think about challenges and problems differently. And, frankly, that's what we've been doing at nbkc for the last four and a half plus years, as we work to take our account opening nationwide and offer related services to our customer base.

From his experience, Ashcraft knows what can go wrong when banks work on selecting fintech partners. Sometimes, silos don’t promote good communication about what different groups within the bank want or expect from a partnership.

Evan Ashcraft, nbkc: A lot of times the reality is the selection process itself isn't necessarily horrible. But what happens is things get purchased in a vacuum or done for one reason and the outcomes are identified for that or the outcomes of that project aren't identified correctly -- having scenarios where things are turned on and never used or not used as intended, and frankly, collecting dust on the product offering for our customers.

To mitigate this issue, banks can engaging different stakeholders earlier in the selection process to get everyone on the same page.

Evan Ashcraft, nbkc: In my 20 plus years, there's always been a wide variety of variance. What happens in nbkc is part of our process is to engage teams internally: from compliance to operations to marketing. This includes the business units and frontline staff to make sure that when we do launch something that there is understanding what that product offering is, wherever you're engaging with the bank -- from marketing emails to phone calls to support.

After the selection process comes launch. For nbkc, it pays a lot of attention to how the customer experience will be impacted by a new fintech partnership. It tries to work through different issues upfront so that it can minimize the problems that creep up in the rollout.

Evan Ashcraft, nbkc: At this point, we are very focused on understanding the CX of the project. That's the lens that we try to view everything that we're doing through. Whether it's a back-end enhancement piece or an actual front-facing customer component, we try to look at the customer experience. What is the experience the customer is going to have? Or not have? Or what friction is introducing this going to cause our customers?

Taking that approach has allowed us to better identify rollout or dev burden issues during the rollout process. We're not perfect by any means. We have failures in that process, periodically. But we work to strive to fix those and evolve until the next project is better and more thought out.

Marketing sometimes gets short shrift at the selection table when banks partner. Evan recommends connecting marketing in so that its voice is represented. This should make for more successful launches.

Historically, it's been more of hey, the business line needs this or a product guy needs that. They tell marketing what they need to market the component or the feature. There has been a path that has always been taken. In my experience, there's sometimes a disconnect in how marketing might see a product or feature that's very different than what the business line or the product team is expecting to solve for that feature.

And so I think there's a desire to try to streamline that workflow and control that process that I think ultimately causes challenges when it comes to actually getting the tool in front of the customer. In most cases, changes are not necessarily evident to a customer if you don't have more marketing behind it.

We started looking at the equation differently, with a marketing viewpoint in there as well. They start to identify demographics and other data points of customers. Marketing looks at how the customer is going to interact with it. They provide a different lens, that interaction piece that ties into the CX or UX of the product. Conversely, that allows you to challenge the original intention of what the product was for, and hopefully get to a spot to better educate the customer than if you wait till the end of the cycle, getting just a little bit of back and forth. Having marketing along for the ride really helps give them an understanding of what we're trying to achieve, what we're doing, what we're all trying to achieve in a new product rollout.

nbkc has a variety of fintech partners. One of them is Autobooks. The relationship with the small business accounting platform came through another partner.

Evan Ashcraft, nbkc: Autobooks is unique in a few different ways. At nbkc, we are a partner of Q2 and we use their online banking platform. Q2 has been working to roll out what they call a marketplace. And they've asked us to be an early adopter of that program. And Autobooks is the first on the vendor side of that marketplace that was also in the process of being onboarded there.

Big software integrations are tricky. They take time, require a lot of user testing, and frequently get sidelined by other priorities at banks.

Evan Ashcraft, nbkc: One of the challenges in the past for looking at the Autobooks model was that we'd have to deal with this large, white label integration. A lot of things would have to be adjusted, and then it's a six to nine month project to get that to happen. And that's once you get all your other ancillary vendors lined up. It can become this massive project.

This opportunity with a marketplace dramatically streamlines that down. It allow us to go, okay, yeah, we have a path here that's going to take a few weeks. Keep in mind that this was a new thing for us, a new thing for Autobooks and a new thing for Q2. There was definitely a learning curve involved. But it was a relatively turnkey implementation process for us. We were able to move a lot faster. We spent a lot of that time on the marketing components of it.

nbkc has been around for 20 plus years now and with our nationwide rollout, we focused on consumer initially and then on small business. 2020 was a growth year for us. In December, 50 percent of the accounts that we opened were small business customers. And we're in a spot that that will continue trending to being more small business than consumer accounts being opened.

Autobooks isn't a silver bullet by any means for solving for different business account needs. But it can solve for a lot of the pain points that customers were having. They're using Square or other types of merchant processing solutions out there. And by layering in Autobooks, we were able to give our customers a tool that would help them get paid. And we were able to do so within a matter of several weeks. But the project itself was probably only like three weeks long for us to go from a signed agreement to implementation.

Part of the selection and launch processes should include discussions and plans about launching. When launching Autobooks, nbkc took a route that focused on building demand first, so when the integration did go live, small businesses wanted it.

Evan Ashcraft, nbkc: For our launch plan, we decided to do something a little bit different for a traditional bank by taking a page from the fintechs that we work with. We actually launched with a waitlist. So we sent out some messaging to our customer base, letting them know, hey, we're working on this new partnership with Autobooks and the benefits that a business might get with it. We sent that to our current customer base. And within a matter of couple days, we had over 100 different small businesses raise their hand, saying, hey, I want to be on that waitlist. And then beyond that, that was about two and a half, three weeks before we were actually able to really kick the project off and move things forward.

We flipped the switch and Autobooks was available to customers. We engaged our current customer base in some communication workflows that we agreed to with Autobooks. They have a pretty elaborate philosophy around marketing. That didn't always jive with us and our approach to doing business and so we worked with them to kind of streamline that those marketing messages and how we were talking about the tool to our customers.

We also used some new features within our Q2 environment to present information in front of the customer. So we had basically an interstitial using Q2 Discover to introduce Autobooks to our current customers, explain it to them, what it is and where they could go to sign up for it through the marketplace. And then we also did some targeted in app ads around it. The reality is, it sounds like a lot, but it was relatively limited. We weren't calling customers directly. We weren't doing a lot of paid media outreach on the phase one piece.

nbkc’s Ashcraft sees his customers using the new functionality. Usage metrics for the Autobooks partnership are pointing in the right direction.

Evan Ashcraft, nbkc: We're now about three months later. We have over 100 customers on the platform. We have some customers that are using us to an extent where we are billing 300 to 400 subscribers monthly to Autobooks and collecting low dollar payments. We see that the average business that signed up is engaged on the platform within 17 days, whether that means they've signed up with login information, sent an invoice and gotten back, which is where half of what the industry norm is on collecting payment. So we are taking a business from taking 30 days to get payment from a customer down to half that. That sounds like a pretty good win to me for small business.

This is one of the few launches that I've ever done where we got unsolicited positive feedback from customers going, hey, this is awesome. You know, Autobooks for the win! type deal, tweeting out and posting on Facebook and Instagram and other places as well. The reality is, most of the time, when we hear back from a customer at product launch, it's usually because there's some sort of challenge or issue that occurred and we have to resolve it. And it's not about how positive the experiences are for them.

Because getting the right partners is so important, the selection process requires a lot of resources. It’s important to find partners a bank can scale with and introduce new products and functionality with in the future. nbkc plans to do more work with Autobooks in the future.

Evan Ashcraft, nbkc: We do. Actually, we wrote out an update last week, where we are introducing a feature inside Q2 that allows customers to immediately jump into sending an invoice to collect payment. It's the shortened workflow of the full Autobooks suite, where it's just focused on the payment components of it, not on the account reconciliation, reporting and other tools that it offers. We launched it on Thursday, and I had to look at some numbers but we have gotten some positive feedback from customers engaging there. The cool thing with it is they don't have to have a monthly fee to use it. They're using it just for that function, and there's interchange fees that apply. That really helps the customer get onboarded to new things faster.

Beyond that, we're getting ready to do a phase two marketing campaign that will be focused externally from the bank, looking to bring in new customers and engage customers directly.

nbkc continues to work on its customer engagement. Whether that’s improving existing functionality or introducing new stuff, the bankis focused on helping its clients.

Evan Ashcraft, nbkc: For me, our future is focused on really trying to address customer experience challenges, making things easier to use, whether it's on our business or consumer side. We're trying to do some things that just sound like basic things that some banks already have that others don't. And with that, it also means partnering with other solutions like Autobooks that we can roll out to our customers in the same fashion, with a quick turn around, giving them access to the tools that they need. And frankly, we want to get out of the way when they don't need us.

That's kind of been our long standing understanding of how banking should work. Everyone needs a bank, whether you're a consumer or business. You need a bank to be able to move money around. And our objective is to be able to make it super easy and simple for you to do so and get out of the way when you don't need us. You shouldn't have to call your bank regularly to do some basic stuff. My job is to help provide tools to make sure that's as easy as possible for you.