Texas National Bank looks outside their core for a modern banking platform to help launch their direct digital bank
Banks typically work exclusively with one core provider who delivers innovative business solutions for the bank and the bank’s customers. Less typical is for a bank to utilize two cores, operating independently of each other, to serve different lines of business, but this is exactly the approach Texas National Bank, a $170 million bank headquartered in Sweetwater, is pursuing by adding Data Center Inc. as a core partner for their direct digital bank.
Texas National Bank President and CEO, Mike Fernandez, knew that the future of his bank would be dependent on pursuing growth in an innovative way. “We are geographically constrained for branch growth, and the economy is not as strong in our markets as it is in other areas which presents headwinds to growth and obtaining new business. The traditional solution to this problem is to look for an acquisition opportunity, whole bank or branch, or to make a de novo market entry, but those solutions are incredibly expensive, especially compared to the direct digital bank approach,” Fernandez explained.
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“We Turned to Bankers Helping Bankers”
“When first exploring the idea of a direct digital bank, we contacted our current core provider, and while they are a great vendor for our main bank processing, they were simply unable to confidently assist us in creating a solution for our direct digital bank needs. This forced us to look for other options and solutions.” Fernandez details how they consulted with the “very visible” cores, but determined they weren’t the right fit either. “Eventually,” Fernandez continued, “we turned to Bankers Helping Bankers [a new, bankers only, platform designed for collaboration and communication among bankers]. They listened to our problem and connected us with Data Center, Inc.”
“What most people don’t realize about DCI is that we have been working with banks who are exploring Fintech solutions that fall outside the “normal” banking model for close to a decade,” explains DCI Senior Vice President of Digital Channels, Tanna Faulkner. “Our offerings and integrated systems are a perfect match for what Mike and his institution are looking to accomplish. These innovative solutions and uncommon collaborations are exactly what will save and secure community financial institutions for years to come, and that’s why DCI is eagerly seeking these types of partnerships.”
It became apparent to both parties, after the initial meetings, that DCI’s progressive and modern services were going to help Texas National make their idea a reality. “I knew DCI was the right choice, not just because their technology beat out everyone else, but when Tanna asked to see our business plan, I knew we weren’t just another contract to them and that they really were invested in helping us succeed. We had a partner, not just a provider,” Fernandez explains.
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The result, Bankers Lender, a direct digital bank tailored to bankers and delivered through a digital platform. Application, approval, and movement of funds will take place all online and all through one source. Fernandez and his team anticipate an April launch with initial customer offerings of:
- Unsecured revolving lines of credit;
- Unsecured closed-end loans;
- Secured revolving lines of credit;
- Secured closed-end loans; and
- Demand deposit accounts
“We have a rich history of supplying bankers with deposit and loan services in our geographic area, and Bankers Lender will further enhance our reach and reputation,” explains Fernandez. “This venture is coming to fruition because we found the right partner who also sees the gap this service fills and supplies the necessary tools to make the program run with an attractive interface for our customers.”
For DCI, this project falls directly in line with their culture and vision of securing a future for community financial institutions. “When they came back around with their plan and specific target audience, we were thrilled with the concept. It’s imperative that community banks help one another, even as customers. We are incredibly excited to see where this takes Texas National Bank and we are proud to collaborate with them,” Faulkner weighs in with her own excitement.
DCI and Texas National are in the middle of implementation with plans to launch Bankers Lender in April of this year, and while the approach may be uncommon, both parties believe one of the most dangerous phrases in business is “we’ve always done it this way.” Progress is rarely made by using ideas from the past, and this project is a potential blueprint for how others can take steps forward in the community banking industry.
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