Tackling Data Gaps in Small-Business Banking

Middesk CEO Kyle Mack discusses how his fintech helps banks vet small-business clients. We also take a look at the C&D order the Fed issued to Evolve Bancorp.

What a week, Bank Slaters!

We hit 1,000 subscribers just after sending our last newsletter and we’re off and running on the next 1,000! We’ve come a long way in a short amount of time and it is all because of you. Thanks for the ongoing support for what we’re doing here!

The notion of a summer slowdown seems to be a myth.

After returning from Q2 Connect in Austin, Texas, I drove to Charlotte to co-lead a workshop at the Fintech | Insurtech Generations conference. With Babette Reynolds at Bank of America, I helped an engaged group of fintech leaders better understand how to prepare for pitching their services to the banking industry.

On-site at Fintech | Insurtech Generations in Charlotte.

I also managed to make some time for several interviews. There was a lot of interest in discussing branches.

For S&P Global Market Intelligence, I shared insights on net closings, which have been slowing (see chart below). I observed that more banks have found a post-pandemic equilibrium between physical locations and digital capabilities, while folks like JPMorgan Chase, PNC, and Fifth Third are expanding in select markets.

I also discussed sale-leasebacks with American Banker, noting that bankers need a clear vision for what their footprint will look like years into the future before pursuing those transactions. The process for exiting a lease early is different than that for selling a branch.

"Branches are a finite source of revenue," I noted. "You can only sell a branch once."

Finally, I contributed an article for Bank Director that examines the types of questions directors should ask management teams about credit quality. I spoke with many smart people for this one, including Ken Lehman, Julie Stackhouse, and Yousef Valine.

Let’s talk about onboarding small-business clients.

While at Fintech | Insurtech Generations, I met Kyle Mack, the founder and CEO of Middesk, a fintech that helps banks vet and onboard small businesses. We had a great chat, discussing the difficulties lenders face in gathering enough data to approve loans and other services for relatively new companies. That’s where Middesk steps in.