True Digital, provider of an online platform that helps financial institutions
On Wednesday, the company announced that it had formed a partnership with the Mid-Size Bank Coalition of America, a network for such financial institutions to exchange information about best practices and more. Members of the MSBC typically hold between $10 billion and $100 billion of assets.
Patrick Sells, the CEO and cofounder of
True Digital and TechPassport help banks assess and monitor fintech vendors and partners.
"When we started the business we thought that under $10 [billion] or $15 billion [of assets] would be the sweet spot," said Sells in an interview. True Digital has more than 200 financial institution members at the moment, the smallest being a de novo with $40 million of assets; several have less than $1 billion of assets and several more have less than $10 billion of assets.
But as the business geared up, "We discovered that the larger the bank, the more vendors they use and the more excited they were about the platform."
Sells estimates that a bank with $10 billion of assets typically has more than 200 vendors.
This partnership doesn't give members of the coalition special access or a different experience from other members, but there is "this idea of a network in a network," said Wyatt Abernethy, managing director of digital and treasury at Veritex Community Bank in Dallas, in an interview. "Midsize banks in the coalition may have the ability to share additional information with each other that stays inside of their mini network, while they still get the access and power of the full network."
Veritex, which has $12.1 billion of assets, is a recent customer of True Digital. Abernethy estimates that his bank has more than 200 vendors that help run the business.
"As we crested $10 billion, our requirements around vendor management and third-party due diligence increased as well," he said. "It can be overwhelming to try to manage and strategically align that."
Abernethy found identifying appropriate vendors and finding and soliciting feedback from bankers to be a lengthy and manual process.
"Banks that more closely resemble our size are much more meaningful for our risk and compliance folks in terms of providing feedback," he said. "We can't compete with larger banks in terms of technology spend, but if we can be tactical and partner well with other banks, we can get the same lift."
Jim Reuter, CEO of FirstBank in Denver, echoes the sentiment.
"While there are ever more vendors that exist, the fundamental challenge of finding, optimizing, and partnering with them has gotten harder," he said via email. "True Digital is unique in what I've seen in the business model, approach, and product itself in how it can significantly help banks add new capabilities and save time and money."
Sells says that the neutrality of True Digital sets it apart. Only vendors that member financial institutions use can be part of the database, and True Digital only takes fees from its bank customers, not vendors. Users can search for vendors by category, such as loan origination or brokerage technology, or by goal, such as "improve balance sheet management." When they land on a certain vendor, they can see a breakdown of True Digital members using it, review risk assessment considerations and more. To date, True Digital has amassed about 1,000 vendors in its database.
