New platform aims to bridge ‘translation layers’ between banks, fintechs

Patrick Sells is launching a new venture that aims to bridge the gap between two sectors he knows very well.

Sells, who has held the role of chief innovation officer at crypto firm NYDIG and New York-based Quontic Bank, is launching True Digital Group, an online platform designed to help financial institutions innovate and more easily identify and implement new fintech partners.

Banks or credit unions pay a fee to join and can access seminars focusing on topics such as compliance, crypto and lending.

A key goal of the platform, which Sells plans to roll out in the next four to six weeks, is to speed up the time it takes for banks to find a fintech whose services match their needs.

“There is a huge amount of time that is wasted and frustration that comes from

the process of just trying to find the right fintech partner and actually get to the finish line with them,” said Sells, who spent two years at Quontic before joining NYDIG in 2020.

The reason for this, says Sells, is due to a “missing translation layer” between banks and fintechs.

True Digital helps bridge this gap by presenting fintech data and services in a way that is convenient for financial institutions, he said.

“A bank could log in and say, ‘Our goal this year is to grow our non-interest income, or to grow our loans,’ using banking terms. And what they would see on the other side are the fintechs that specifically help with that, he said.

Sells said he wants True Digital to be a neutral platform. Only banks and credit unions can join as members, and only fintechs with a working relationship with a bank or credit union that is an existing member can appear on the platform, he said.

This prevents a fintech from inflating its bank partnership numbers, a frustrating practice that a bank may not uncover until months of discussion and due diligence have passed, Sells said.

The policy also ensures that financial institutions have another bank or credit union that can vouch for fintech.

“A fintech cannot just appear on the platform without the financial institution willing to speak as a reference,” he said. “We have to be very thoughtful about how we deal with different entity types. A lot of people have tried something in this area, but if a fintech could pay to appear higher on the list, suddenly you’ve compromised trust in the platform.”

True Digital currently has about 50 to 70 members, Sells said.

Vantage Bank CEO Jeff Sinnott, whose $3.3 billion asset institution has signed on as a True Digital partner, said he plans to use the platform to look at technology stacks across different banks and credit unions.

These insights will help accelerate the San Antonio, Texas-based bank’s innovation goals by enabling it to more quickly determine which fintechs will work best with Vantage’s systems, he said.

“It’s a very interesting time for community banks and credit unions, in terms of technology. In many ways, technology’s barriers are lower than they’ve ever been for the industry. But in other ways, it takes an incredible amount of effort and time to qualify potential partners,” said he.

Finding the right fintech candidate can take his bank seven to nine months, Sinnott said.

“We’re casting a very wide net because the fintech partners and players are changing so quickly. Who they’re communicating with, in terms of legacy technologies, is hard to determine,” he said.

Get them talking

Although the platform is intended to speed up what can be a lengthy process, the goal is not for banks to outsource their due diligence, Sells said.

“We’re just trying to speed up the, ‘Who do I talk to?'” part. That’s where I think the most time is lost, Sells said. “That can actually free up more time to spend on deeper due diligence, which hopefully helps the bank avoid problems.”

Anecdotally, Sells said he is aware that banks and credit unions share knowledge and advice on fintech partnerships, but the process, he said, is still very analog.

“Our observation is that it’s all happening, and it’s very effective in theory, because you can really trust the other banker you’re talking to, but it’s just not easy to find the right banks to talk to.”

True Digital aims to expand financial institutions’ networks, especially when it comes to securing the right fintech partner, Sells said.

“We want to be very thoughtful about what banks or credit unions need. We really want to be their advocate and we want to be a trusted partner,” he said.