As community banks embrace innovation, they do so with the knowledge that each new solution becomes a product in their portfolio. With every integration comes the reliance on existing systems to support regulatory compliance, operational requirements and customer-facing usability. That generally means core integrations or top-layer API enablement to ensure functionality that delivers an optimal user experience. And quite often, that’s much easier said than done.
It comes as no surprise that, by and large, community banks are dependent on their cores. As the innovation landscape evolves, so too do those relationships. Community banks remain focused on determining the right mix of integrations and layers to ensure a seamless experience for their teams and customers, while seeking to collaborate with their cores to achieve a more efficient outcome. However, while the innovation environment continues to shift, community banks’ underlying dependency on core providers remains constant.
At the same time, today’s innovation landscape requires novel approaches to infrastructure that introduce new compliance requirements, and agencies are aware of this dynamic. For instance, late last year, the Office of the Comptroller of the Currency (OCC) issued a request for information on community bank engagement with core providers, seeking input on the challenges community banks face, how those concerns affect competitive positioning and ways the OCC can play a role.
Community banks now must ensure that regulatory agencies and core providers both provide the elements they need to innovate. As we shared in our response to the OCC, any development that allows for innovation on a quicker, more creative basis is a win. Specifically, clearer, faster regulatory guidance that better clarifies expectations will help ease the burden on community banks. Regulatory sandboxes and pilot programs also create a way for community banks to test new solutions and offer an environment for experimentation. Core providers can also continue opening access via APIs and make those connections seamless and functional for community banks.
There’s clearly a lot at play as we continue in this era of innovation, and ICBA is committed to supporting community banks with actionable guidance to help them embrace opportunities. Whether it be by researching and identifying potential partners through ICBA Preferred Service Providers, corporate members or the ThinkTECH Accelerator or by better connecting with peers via the ICBA Community to learn from their experiences, we are here to support your journey. Community banks will continue to flourish by offering the distinct solutions that they know will uniquely support their customers and communities.
