ThinkTECH Discussion: Capturing the Innovation Mindset with Avidia Bank

By Charles E. Potts

To think differently, you have to, well, think differently.

While that is not a profound concept, it can be alarmingly difficult to execute. New ideas get bogged down in established procedures, compliance requirements, ROI discussions, proof points, and other standard banking business practices. Yet, having to meet those check boxes before running with an idea means that sometimes the process limits the potential.

Not that I’m against process in any way; in fact, it’s quite the contrary. If you’ve heard me speak, you know I’m a proponent of leveraging innovation-based practices to address community bank problems. From the lean methodology to design thinking, identifying an approach that works for your organization can help put some structure around your product innovation.

But it takes more than know-how to shift gears from responding to anticipating market needs. You have to have a willingness to put all of your business practices through a microscope, and come to terms with the reality that setbacks are a part of the innovation journey.

I recently had the opportunity to discuss innovation philosophy with Bob Conery, a member of this year’s ThinkTECH Accelerator Selection Committee and the chief operations officer at the $2 billion-asset Avidia Bank in Hudson, Mass. He shared some great insights on his own bank’s journey to a new way of thinking. What follows is a brief excerpt from our conversation.  

The Selection Committee has  talked about factors that contribute to an innovation mindset. How has your team at Avidia brought that concept to life?

Conery: While many banks only implement change when they have to in order to retain customers, Avidia has adopted a want-to approach. For us, that means seeking opportunities with our core processor, card networks and other technology partners. We strive to be a first-to-market, early adopter of new technologies. This entrepreneurial approach requires Avidia to be agile while sustaining a balance between governance and bureaucratic roadblocks.

How do strike that balance and respond to compliance challenges in an innovation environment?

Conery: It’s about remaining cognizant that most regulatory authorities are comfortable with traditional banking services, subsequently board reporting, risk assessments and strong BSA/AML oversight is a necessity. But, with proper documentation and a clearly defined strategic plan, banks can build a comfort level with their examiners, which allows them to explore more out-of-the-box offerings.

And what do you see as an innovation priority for community banks today as it relates to those offerings?

Conery: Many in the industry are focused on delivering existing products and services digitally, creating the same candy with a different wrapper. We believe that to succeed in the digital age, we need to be focused on redefining banking services. While businesses and individuals may not be looking for another bank product, they are looking for digital solutions designed to meet their particular needs.

How have you been able to innovate to meet those needs?

Conery: We’ve taken the approach of engaging the fintech community as customers. Over the last five years, we have provided API integration as well as sponsorship and payment services to more than 20 fintechs. By providing this access, we benefit from our partners’ digital success while offering similar opportunities to our direct customers. Not only have our fintech relationships resulted in more fee income and deposit growth, but they have also provided a new career path for some individuals, allowing the bank to leverage their expertise in new ways.

So, if you had to offer one piece of advice on making that leap to a more innovation-first mindset, what would it be?

Conery: Community banks need to be prepared to redefine their value proposition while embracing change. Being innovative and agile provides community banks with a strategic advantage over large national banks—one we can continue to leverage.

As you explore ways for your bank to employ innovation as a strategic advantage, I encourage you to consider joining us as part of this year’s virtual ThinkTECH Accelerator 3.0. This field of entrepreneurs are certain to spark new ways of thinking and possibilities for your bank. For more information or to sign up as a participant, visit icba.org/thinktech/accelerator.

Charles Potts is ICBA senior vice president and chief innovation officer.