Name: Why one of fintech’s most powerful women bought a 95-year-old community bank
Uploaded: 2024-05-14
Duration: 5 min 18 s
Description: Lead Bank CEO Jackie Reses, a former Square executive, bought the Kansas City–based bank to address compliance and technology challenges facing fintechs.

Lead Bank CEO Jackie Reses, a former Square executive, bought the Kansas City–based bank to address compliance and technology challenges facing fintechs.

Why one of fintech’s most powerful women bought a 95-year-old community bank

Photo illustration by Fortune. Photo courtesy of Lead Bank.

Leadership

What made it really easy for us for people to say like, of course, you did like go, you, I'm not surprised. Of course you bought a bank, Jackie. It's one of those very funny things that I like if I tell people, they'll say like you, you bought a bank, like just, you know, unless you know me from square, it's such a weird thing to say like, yes, I own a bank. I went and bought a bank. But when you understand the story of like having built one from zero, you know, from an idea that I had it kind of feels obvious welcome to leadership next, the podcast about the changing rules of business leadership. I'm Alan Murray and I'm mia people who know you will associate you with fintech and Square in particular. Um But not necessarily with a, you know, nearly 100 year old community bank in Kansas City. So explain the strategy because not every fintech company has a bank. In fact, none of them do. Ironically, it's very hard to merge the two because the strategy around both of them are almost diametrically opposite in both in both business lines. So for me when I was at square, one of the things I experienced was extreme pain and frustration and working with bank partners. And what most people don't realize is the financial infrastructure products that they have in their wallets every day. So debit cards, credit cards, you know, loans that they might take out 100% of them are built in the banking system. There's always an underlying bank involved with every transaction with the evolution of fintech. People think of fintech is like the front end of that relationship. Like you have a relationship with a firm, you have a relationship with, you know XYZ fintech company, it could be paypal square chime ramp, you name it. And so um that's the way people think about it. But underneath there is the infrastructure that helps build those products. And so that's what we do. And so that's where I had this challenging situation where we would connect with banks that were very traditional banks and they weren't used to dealing with technology partners like us. And so I decided that I would go by a bank to do this with the technology angle and the substance of compliance knowledge from the environment of like what is it like to be a customer? What is it like to be involved and support what regulators are asking of us but translate it through the lens of understanding both sides of that puzzle so that we could deliver a really unique experience to our clients, our clients are, you know, huge fintech and consumer companies or are scaling fintech where they all want to run highly compliant programs because they are highly successful companies. But they want someone who can operate at the same speed that they can. And so that's how I've merged the two sides of the business. You know, we have a really strong team that sits in compliance and legal, really strong team in finance, really strong team in engineering and product. And the engineering and product piece is usually the piece that most community banks don't have. And our engineering team is second to none in the banking industry. They're fantastic. Um And they understand how to build primitives to support banking in a way that most, you know, most banks don't have. It's, it's pretty cool. I have to say what we're doing is pretty unique in the United States. What kinds of other products, tech products and tech products are you currently developing? Like where, where are you focusing your energy? It always sounds really silly to say because it's like master the obvious, I feel like I'm talking about products that have been around for 5000 years. First of all, they're all API S. So they're direct connections with our clients through API S and they are around core banking primitives in lending, in money movement in issuing. And so it sounds kind of funny to say like, oh, we focus on money movement. That's kind of what we do. But it's, and, and just to clarify though, you're talking about API S, you're developing tools that your customers can use to develop their own tools basically. And they embedded into the, the products you would never know that we exist. Except for if you look at the back of a lot of people's debit cards and credit cards. This is why it's one of these funny businesses like everyone uses us, but no one realizes they do. If you look at the bottom of a debit card or credit card, you're like, oh, issued by, huh? There's some bank on there. And interestingly a lot of the banks that those cards are issued on are usually small banks located in the middle of the country. And so we're one of those small banks located in the middle of the country.