Fintech companies are banking on consumers’ value-driven money decisions

Climate First Bank, a St. Petersburg-based community bank founded in 2021 by Florida banking industry veteran Ken LaRoe, tried to differentiate itself from the beginning. That especially includes its emphasis on providing loans for solar power plants and other green energy projects.

Looking ahead to 2023, the bank plans to accelerate its approach to serving customers who want to do well with their money. A big step there comes from its parent company, Climate First Bancorp, which recently launched a fintech subsidiary, OneEthos, which creates a suite of what it calls “mission-aligned” financial products and services.

OneEthos’ first product was the digital solar lending platform it created for Climate First Bank, currently its only client. It helped the bank reach more than $200 million in assets and exceed $140 million in loans in its first 12 months in business.

Now, thanks to the acquisition of a tech startup called Ecountabl, OneEthos plans to introduce a value-driven online and mobile banking platform that it will eventually market to community banks and credit unions across the country. One of the product’s core functions will be to analyze credit and debit card transactions and let bank customers know about brands and companies in line with their values, whatever they may be; it may also suggest local and minority-owned businesses that offer similar goods and services.

But with all the environmental, social and governance (ESG) information already available to consumers, do banks need to offer such a service, and does it even make sense from a return perspective?

Climate First Bank’s Chief Technology Officer and OneEthos CEO Marcio deOliveira says the answer is yes. He believes OneEthos, powered by Ecountabl, will be a difference maker for one big reason that can be summed up in one word: community.

“For community banks,” he says, “community was defined by a geographic area. Because of technology, that’s changing. We define community a little differently—as a group of people who share the same values.”

This change has been well documented – and lamented – in the political realm, where hyper-partisanship has taken hold. But in banking and finance, executives like deOliveira — a veteran of St. Petersburg-based C1 Bank, which was acquired by Bank OZK in 2016 — see big benefits.

“It goes beyond environmental sustainability,” he says. “The discovery component is very powerful. We are able to offer a solution that appeals to customers who feel strongly about their community, and which could be a lucrative opportunity for both OneEthos and its holding company.”

Ecountabl has a database of more than 10,000 companies that includes a full index of each firm’s ESG performance, and it has created an algorithm that runs in the background of online and mobile banking platforms, ranking transactions “according to what is important to you ,” deOliveira says. “It’s a computer company.”

OneEthos, he adds, first approached Ecountabl thinking it would hire the firm as a supplier. But CEO Andy Burr and CTO Justin Bretting, who have since joined the OneEthos team, thought an acquisition made more sense.

“We went through a buy vs. build analysis,” says deOliveira. “Over a period of several months, we decided that an acquisition would be the best option for everyone. It would allow us to move faster in terms of development, and we would give the Econtabl team the funds and resources they needed to execute our vision.”

Climate First Bank customers, deOliveira says, should start seeing the effects of the Econtabl acquisition by the end of the first quarter or the beginning of the second quarter of next year.

But that, if all goes as planned, will be just the beginning.

“A medium-term strategy is to share the technology we’ve built with other financial institutions,” he says. “There are more than 10,000 small financial institutions and organizations trying to solve this problem of community and how you define it in a digital age, when people don’t go to bank branches anymore. How do you solve that? We want to open up our technology to as many banks as possible, and it’s exponential.”

However, few banks are currently driven by the same values ​​as Climate First Bank. What if a customer in another bank using the OneEthos platform does not want their expenses tracked and analyzed?

“That concern is valid,” says deOliveira. “We’re making sure we have controls in place, that we’re meeting all compliance and regulatory expectations. And yes, our customers will be able to decide whether they want to use that feature or not.”