For the past decade, KeyBank has actively pursued relationships with fintechs by either investing in or acquiring them, increasing the number of products the Cleveland, Ohio, financial institution can offer its customers in 15 states.
Jamie Warder, an executive vice president, is the head of digital banking at KeyBank and actively works with fintechs. Warder previously led business banking and investment services and was responsible for business clients with up to $10 million in revenue and the retail investment and broker/dealer business at KeyBank. Before he joined Key, he served as the president of USAA Bank in San Antonio, Texas.
KeyBank (NYSE: KEY) had assets of $170.5 billion as of September 30, 2020.
In an interview, Warder discusses Keybank’s fintech acquisitions and partnerships with FinLedger.
FL: Do you partner with fintechs? Which ones and why?
Warder: Fintechs are wonderful partners. We have a three-pronged approach and have embraced partnering with them when they have capabilities that will help our clients like Bill.com with accounts receivable and accounts payable, Boomtown which helps servicing with merchants and OptimalBlue to help us with the best mortgage pricing at a local level. All fintechs that are good for our clients are ones we are willing to make a part of our ecosystems.
FL: Which fintechs have you invested in and why?
Warder: The second prong is that KeyBank invests in fintechs. We want to drive their roadmaps, be part of their story and want to match it with our client base such as Billtrust, AvidXchange and SnapCheck. They remain independent and take it to the next level.
FL: Which fintechs have you acquired and why?
Warder: The third prong is that KeyBank acquires fintechs. We have done that with Bolstr, a small business lending company that is the backbone of our Paycheck Protection Program. We used Bolstr for the PPP application. KeyBank also bought HelloWallet, a Washington, D.C.-based company that helps consumers be more financially independent and Laurel Road, which provides student loan refinancing, graduate loans, mortgages and personal loans. They are all examples of acquisitions that can help clients. We integrate these fintechs into the bank.
I really like doing what is best for our clients. We are ok if it is not our technology and we want our clients to have that. We’re not going to be able to build everything. We have a very thoughtful approach and are never afraid of partnerships, investments and acquisitions if we can get clients what they need.
FL: What are some new tools that consumers are seeking that KeyBank is working on?
Warder: We have a mortgage program that is in a pilot mode that we want to roll out more broadly.
We want more good advice to become digital so it can help customers run their business, manage personal finance and give you recommendations. KeyBank has a patent-pending financial wellness review for both businesses and consumers – you tell it what your goals are. It uses current data and data customers are giving us, algorithms and artificial intelligence to make recommendations such as whether someone should consider investments as part of a portfolio if it makes sense to refinance your mortgage or if you should change your spending habits.
FL: What kind of changes have you seen from the coronavirus pandemic?
Warder: We have seen changes in shopping, buying and servicing and touchless payments. The number of new accounts that originated digitally is up 50% from January, including mortgages, credit cards and checking and savings accounts.
The number of vendors accepting digital payments such as Google Pay and Apple Pay have increased 100% since the pandemic. Customers are also using Zelle for person to person payments and it has also risen by 100%.
More merchants are going to touchless payments because of the pandemic and we are seeing more acceptance of virtual wallets from small businesses.