Worcester Business Journal

www.wbjournal.com February 1, 2016 • Worcester Business Journal 13 >> B A N K I N G & F I N A N C E Get more from your banking relationship Small Business Solu ons at Fidelity Bank At Fidelity Bank we are commi ed to providing business owners with the exper se, products, and services to help you realize your financial hopes and dreams. Leominster Worcester Fitchburg Gardner Millbury Shirley Speak with our Small Business Specialist Jen Conrad, or any of our Branch Managers today at 800.581.5363 fidelitybankonline.com • Personal a en on • Big-business exper se • In-branch service • Access to the full capabili es of our cash management professionals Jennifer Conrad SVP, Small Business Specialist 508.762.3608 innovative financial services products, what they're lacking is the security banks are required by law to provide, and access to consumer information, said Robert Morgan, vice president for emerging technologies at the American Bankers Association. As a result, it makes a lot of sense for fintech startups and banks to work together. "This story that's been built up is that there's a tension between banks and non-bank fintech startups, where really the focus has been on partnering, so startups can offer services through a secure bank channel," Morgan said. "A lot of banks big and small are investing really heavily in developing these tech- nologies." When it comes to technology, Morgan said, he is seeing banks be innovative in three key areas: how they make pay- ments, how they interact with custom- ers, and how they lend money. "A lot of innovations we're seeing are really just new delivery channels for products that have been around for cen- turies," Morgan said. "We're changing the delivery platform and how custom- ers interact with it." Community bank involvement For some small local banks, their involvement in the fintech space depends on the services offered by their core pro- cessors – companies that provide back- end software to banks. Core processors such as FiServ, John Henry Banking Solutions and Fidelity Information Systems develop and host tech services for banks to provide to their customers and use internally. For example, Whitinsville-based UniBank recently adopted Apple Pay as a payment option for its customers after one of its core processors made it an option. Apple Pay was developed with security in mind, said Sheryl Shinn, chief information officer at UniBank. "Apple Pay is one of the fastest and easiest payment methods that currently exist, and we have seen tremendous adoption. We also like the security Apple Pay offers, which will help combat fraud, a big benefit," Shinn said. UniBank hasn't worked with any startups on its technologies, because it can be a challenge to find startup inno- vations compatible with the core proces- sor's internal tech structure, she said, though she has seen startups partner with core processors. Small banks also have access to user communities of other banks that use the same core processor, which is helpful because it gives banks across the country the chance to share knowledge and in some cases, band together to ask the core processor to offer a tech service customers want. "They face the same challenges we do. They understand the regulatory burden and limitations of what we can and can't do," Shinn said. Hudson-based Avidia Bank took a different approach. The bank partnered with Oxnard, Calif.-based tech company linked2pay to launch Avidia Pay, a cloud-based payment system that is a one-stop-shop for payment processing, billing and order management. Avidia Pay is available on mobile and can be white labeled, meaning businesses are allowed to put their names on it as they see fit. Linked2pay's platform is a multi-level platform that includes administrative tools and serves as a low-cost delivery system for credit card, electronic check and ACH payments. Thompson said it seemed like a good fit. "The benefit with linked2pay is we can make edits on the fly with them, it's quick and nimble to make any changes that we want to make," said Thompson. Threats and long-term solutions Most customer demand for banking technology comes, unsurprisingly, from mobile, Lively said, and in terms of cus- tomer experience, he said fintech start- ups are ahead of the game. For example, an app called OnDeck allows small businesses to apply for quickly processed loans, as well as lines of credit up to $100,000. Another app, called Banking Up, focuses on the work- ing poor and allows users to be part of the financial services sector without joining a bank. Community banks have to figure out ways to work with companies that create apps like these, Lively said. "Having the financial resources to be able to compete with these apps, but more importantly, figuring out ways we can partner with them, that's the ulti- mate goal," he said. Cliff Thompson of Avidia Bank demonstrates the electronic check deposit capability of Avidia Pay, the bank 's new cloud-based payment platform for businesses. P H O T O / M A T T V O L P I N I

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