Community banks and venture capital firms are joining forces through the newly launched BTech Consortium to help smaller financial institutions (FIs) invest in emerging fintech technologies to the tune of $100 million.  

Through the consortium, banks will collectively invest funds to help power various technology initiatives, Fred Cummings, founder and president at VC Elizabeth Park Capital Management, told Bank Automation News, noting the current pool sits at $20 million. The goal is to reach between $75 million and $100 million once membership grows.

The consortium, backed by Elizabeth Park and Strandview Capital, went live Nov. 1 to give community banks a competitive advantage with investments in finance-based tech firms that focus on lending, cybersecurity and payments, he said. 

“The biggest benefit we have is that we can augment [banks’] internal resources and they can leverage us to assist with the multitude of opportunities that exist,” Cummings said. “It should make [digitizing] more of an efficient process for the smaller community banks, less risky for the bank, and a less capital-intensive process.” 

“We’re hopeful that this helps the banks improve productivity,” he added. “Every bank in the country, no matter what size, is always striving to improve productivity, so having all of the right information on a client can help appropriately respond to their needs.” 

Cloud, RPA and API integration 

The consortium will initially focus on shifting legacy systems to cloud infrastructures, robotic process automation for cybersecurity and API integration into core systems to allow for expanded offerings, according to a release. 

Participating banks can access the consortium’s HUB to recommend emerging specialized fintechs, present research into growing banking trends and share best practices, according to the release. 

Eleven community banks are among BTech charter members, including: 

• $62 billion East West Bank, based in Los Angeles;  
• $20 billion Customers Bank, based in Reading, Pa.; 
• $12 billion OceanFirst Bank, based in Toms River, N.J.; 
• $9.6 billion Park National Bank, based in Newark, Ohio; 
• $8.2 billion Premier Bank, based in Sioux Falls, S.D.; 
• $7 billion Peoples Bank, based in Marietta, Ohio; 
• $6.2 billion Lake City Bank, based in Warsaw, Ind.; 
• $4.1 billion Farmers National Bank, based in Canfield, Ohio; 
• $2.7 billion First Western Trust Bank, based in Denver; 
• $1.6 billion Cal Private Bank, based in La Jolla, Calif.; and 
• $1.6 billion First Community Bank, based in Bluefield, Va. 

The consortium’s goal is to add 30 to 40 more banking members by the end of 2023, according to the release. 

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