Trent Sorbe, Chief Payments Officer at First International Bank and Trust (FIBT) chats about the modern state of banking as a service and how fintech is enabling transformation in this global fintech interview:
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Tell us more about your fintech journey and your role at FIBT.
I’m a lifelong payments person. I got my start on the regulatory side at the FDIC working primarily in payments. I’ve threaded that experience into every bank I’ve worked at. My 30+ years in payments has led me to continually discover new ways to bridge the innovation gaps between payments, fintech and banking.
My experience also includes roles at major card issuers, which has given me the opportunity to contribute to the evolution of financial services, including developing 14 patents. In 2023, I joined First International Bank & Trust (FIBT) as their first Chief Payments Officer to lead Kotapay, our digital payments division. There’s been strong growth at Kotapay, which processed over $100 billion in ACH originations last year and just recently launched Kavinu, a new direct-to-bank banking as a service (BaaS) platform.
We’d love the unique details on Kavinu and your thoughts on why BaaS is picking up pace today?
Kavinu represents a significant shift in BaaS by re-centering the partnership model through a bank-direct approach. This model eliminates the fragmentation that has plagued traditional middleware models with unnecessary complexity and instability. We’ve leveraged Kotapay’s robust infrastructure that processes roughly $120 billion in settlements and 60 million transactions annually to create a cloud-native, API-driven solution that connects innovators directly with our bank.
The acceleration of BaaS is being driven by a market need for more stable, efficient bank-fintech partnerships rooted in responsible fintech innovation. We’re seeing financial innovators frustrated by the shortcomings of early BaaS models still seeking solutions to support speed to market and simpler partnerships. Kavinu is a ‘BaaS 2.0’ approach that eliminates the need for multiple third-party relationships. Instead, Kavinu connects financial innovators directly to an experienced bank partner already supporting efficient electronic payments at scale, which will help strengthen this next generation of BaaS.
Read More: The Hidden Culprit Behind a “Seamless” Digital Banking Experience
How are you seeing the digital banking and global payments landscape evolve today?
Money must move in real time. That’s becoming table stakes, and it doesn’t matter the purpose. We are a real-time global ecosystem and if you don’t accept that, or you aren’t working toward that understanding then you are going to find yourself in a difficult spot in the very near future. At FIBT, we recognize that real-time payments, traditional cards, and virtual payments are fundamental to modern banking, and we’re focused on combining the right technology, scale, and experience to deliver these essential services to our customers.
In what ways are you observing AI enhancements impact the overall fintech and payments segment?
There are tremendous opportunities in fraud protection driven by AI where you can better understand your customer. By establishing individual behavior patterns, a team can escalate anomalies or possible fraud attempts quicker. It’s exciting to think of the possibilities of AI helping to uncover deep granularities in customer behavior – better than ever before. There will be a competitive disadvantage for banks who aren’t looking to accelerate their AI usage.
A few of the top fintech innovators that have held your attention over the recent years and why?
I think Green Dot is a good company to watch to see where sustainable fintech is heading in America. They are in a unique position of being a fintech and a bank charter, enabling them to operate with a tech-first mindset. They have recognized the realities of being a bank quicker than others and have overcome the philosophical hurdle of knowing why it takes so long to do certain things in banking.
Five fintech myths you’d like to bust here before we wrap up?
- Bank-fintech partnerships are not dead. There’s a common misconception that the two can’t work together effectively given the regulatory environment, but we’re seeing plenty of examples that prove otherwise.
- The belief that international remittances automatically equate to money laundering is a harmful myth. While compliance is critical, we can’t let unfounded stigmas prevent us from serving important cross-border payment needs. The industry has made tremendous strides in building robust compliance frameworks.
- It’s also a myth that BaaS is going away. While BaaS 1.0 had its challenges, the model has evolved significantly. Our Kavinu platform represents the promise of BaaS 2.0 – a more direct, stable, and scalable approach that eliminates the fragmentation of legacy middleware models.
- Another misconception is that big banks aren’t going to get deeply involved in fintech. I expect to see increasing engagement between traditional banks and the fintech ecosystem as we recognize the tremendous value of collaborating on payments and fintech innovation.
- Lastly, it’s a myth that ubiquitous acceptance of real-time payments is going to happen quickly. While momentum is certainly building – with FedNow being the latest major real-time payments initiative – achieving widespread adoption will take time. Real-time payments are table stakes in today’s banking landscape, but it will take time to gain widespread RTP acceptance.
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Kotapay is an electronic payment solutions provider based in Fargo, North Dakota. Since our founding in 1993, we have provided fast, accurate, and secure electronic payment services to more than 107,000 companies in all 50 states and Puerto Rico. Kotapay is owned by First International Bank & Trust (FIBT), a federally regulated bank with more than $5 billion in assets. We provide services to a multitude of industries including payroll providers, accountants, non-profits, healthcare, utility companies, and more.
First International Bank & Trust (FIBT) is a full-service, family-owned community bank serving communities across North Dakota, South Dakota, Arizona, and Minnesota. Founded in 1910 as Farmer’s State Bank in Arnegard, ND, FIBT’s foundation was built on the bond between its employees and customers. Today, FIBT remains committed to that personal touch by remaining local, caring for customers, and staying involved in their communities.
Trent Sorbe joined First International Bank & Trust (FIBT) in 2023 as the institution’s first Chief Payments Officer. With more than 30 years of credit, debit, and prepaid cards and payments experience, Trent is leading the bank’s payment initiatives, including its Kotapay division, a top 30 ACH originator in 2022 that settled over $100 billion in ACH originations in 2023.
