The Independent Community Bankers of America (ICBA) announced the launch of the BankTech Ventures Investment Fund today, closing the first round of funding at $55 million from its initial limited community bank partners, according to Financial Regulation News.
The venture capital fund is aimed at accelerating community bank technology opportunities and adoption, and the ICBA says the fund will maximize efficiencies and expand revenue opportunities.
While $55 million marks the first round of funding for the BankTech Ventures Investment Fund, $150 million to $200 million was referenced as a final fundraising target. IBCA will serve as one of the fund’s investment managers and a general partner, working to select, invest, incubate and fast-track tech solution solving for community banking pain points, according to the release.
“Technology has become integral to customer interactions and addressing our industry’s most pressing issues, which is why ICBA launched its ThinkTECH Accelerator program three years ago and why we’re taking the next step with participation in BankTech Ventures,” ICBA Senior Vice President and Chief Innovation Officer Charles Potts stated in the release.
“By sourcing and funding the solutions of tomorrow through this initiative, we deliver a memorable customer experience that fosters long-lasting relationships,” he said.
This venture fund is not unique. A number of community bank-led funds and firms have begun to lead the charge, of investing and partnering with fintechs as a way to spurn adoption and keep up with big-name banks.
Additional players include JAM FINTOP Banktech, a $150 million investment fund made up of 66 community banks, and Alloy Labs Alliance, an innovation consortium and accelerator consisting of community banks totaling over $250 billion in combined assets.
As you can see, there are an increasing number of opportunities for organizations to not only partner with, but invest in, new financial technologies. While these initiatives grow, look for new innovation and partnerships to change the way we look at community banking.
The ICBA recently expressed opposition to Cornell University law professor Saule Omarova’s nomination to lead the Office of the Comptroller of the Currency (OCC). The organization’s lead criticisms included reservations about Omarova’s academic papers and public statements that proposed transferring private retail banking functions to the Federal Reserve and fully replacing private bank deposits.
Following the announcement that President Joe Biden intends to nominate Federal Chairman Jerome Powell for a second term as chairman and Federal Reserve Governor Lael Brainard as vice chair, the ICBA issued a statement congratulating the nominations.
“As the Senate considers these nominations, ICBA looks forward to continuing to work with Chairman Powell and Governor Brainard on the challenges and opportunities facing the community banking industry,” the statement said.
In other recent fintech news, Revolut is partnering with Cube to ensure global financial regulation. Klarna is also eyeing US markets this holiday season with its ‘Klarna Card’ and ‘Pay Now’ services.