Hartford Business Journal

14 HARTFORDBUSINESS.COM | NOVEMBER 29, 2021 Fintechs: Friend or Foe? While some banks see financial tech companies as threats, other lenders partner to adopt new digital services By Matthew Broderick Special to the Hartford Business Journal T he past year and a half has been busy for David Mitchell. As Liberty Bank's executive vice president and chief digital officer since July 2020, Mitchell has led efforts to not only navigate the bank through shifts in customer behavior during the pandemic, but more importantly to incorporate new technologies across nearly all aspects of the banking experience — from money movement and customer onboarding to small business invoicing and customer service — with the hopes it will drive the mutual lender's growth and revenue amid a market landscape that has seen a steep decline in the number of banks over the past decade and skyrocketing growth among financial technology, or fintech, companies. Mitchell himself knows both the banking and fintech worlds well. Before joining Liberty Bank last year, he was president of Glastonbury- based NYMBUS, a cloud software provider to the fintech industry. "Since the Great Recession of 2008, the number of [traditional] financial institutions like banks and credit unions has dropped from 20,000 to around 8,000 now," Mitchell said. In contrast, there have been more than 35,000 fintech deals since 2010, worth more than $1 trillion, according to 2021 S&P Global Market Intelligence data. As fintech companies like Mint, PayPal, Venmo and Apple Pay have gained traction, they have disrupted the traditional banking model and forced banks and credit unions to invest in or partner with innovative technologies that align with the convenience and simplicity consumers demand in an increasingly mobile device-fueled society. That's driven large financial institutions and private equity companies to invest billions in fintech. For the first three quarters of 2021 alone, fintech investment has increased to $91.5 billion in global funding, nearly doubling the total the sector attracted in all of 2020. JPMorgan Chase, the biggest U.S. bank by assets, has acquired three fintech companies since last December. Some banks, particularly large money-center institutions, view fintechs as a threat to their business, as online-only financial services companies have poached millions of customers in recent years. But others, including smaller community lenders, view them as an opportunity and are partnering with fintechs to adopt new technology they otherwise wouldn't be able to develop in-house. For example, Liberty Bank has signed partnership deals with several new vendors, including Alkami, one of fastest-growing digital banking HBJ PHOTO | STEVE LASCHEVER David Mitchell is leading Liberty Bank's efforts to establish partnerships with fintech companies so the mutual bank can add new digital services.

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