BankTechM&A / Funding

Q2 bets on community banking tech with latest partnerships

Q2 (NYSE:QTWO), a financial services company providing digital banking solutions, unveiled its latest initiate to the Q2 Partner Accelerator Program – ZSuite, a fintech that powers community financial institutions with digital escrow products.

Under the partnership, Zsuite will leverage Q2’s Innovation Studio, a program launched by the fintech in June that supplies FIs with customizable options via third-party tech providers Q2 has selected. FIs can then pick which third-party integrations best meet their needs on the Q2 platform.

Zsuite, based in Westwood, Massachusetts, offers products for digital commercial escrow and sub-accounting as well as security deposit management and rent collection. The company began in 2015 when Leader Bank, a community bank based out of Arlington, Massachusetts, created an in-house product innovation division. Several successful product launches later, ZSuite was founded in 2019 for commercial banking.

ZSuite’s integration is one of many moves Austin, Texas-based Q2 has made in recent months to enhance technology in the community banking sector.

Prior to Wednesday’s partnership, Q2 collaborated with MX, a financial data platform and connectivity provider that within the last week integrated with Florida’s largest credit union in membership and assets, Suncoast Credit Union and First Foundation Bank.

In September, Plaid and Q2 partnered to bring Plaid’s connectivity platform to more than 500 community banks and credit unions via Plaid Exchange. According to Plaid, nearly one quarter of accounts connected through its tech are held at credit unions, community banks and other small financial institutions.

And in August, the company worked with Moven to provide enhanced options to community banks in an effort to “compete with both larger banks and fintech competitors.”

“The financial services industry at large is faced with an overwhelming need to innovate faster and deliver differentiated offerings quickly, to keep up with the changing expectations of their account holders,” said Johnny Ola, managing director of Q2’s Innovation Studio.

A recent study conducted by MANTL found 92% of small business owners and 89% of consumers agreed in the survey that community banks and credit unions are as or more vital to the U.S. banking system as large national banks.

Despite playing a leading role in the financial health of their local communities, community banks and credit unions are falling dangerously behind the digital transformation curve. According to the report, 43% of community banks and credit unions do not offer online account opening for consumers and 47% do not offer online business account opening.

“Banks, credit unions and fintechs all have big ideas and want to deliver new personalized product offerings, but the old legacy model for innovation is broken and ineffective — it simply takes too long and costs too much. The Q2 Platform, with our Partner Accelerator Program, empowers companies to control their innovation roadmap and deliver new applications, services and experiences faster.”

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