Banks Partner with Fintechs on Technology

YOUNGSTOWN, Ohio – Customers increasingly are warming up to the technology used at Farmers National Bank’s lab branch in Canfield, executives say.

At the branch, which opened in July 2020, customers can go to one of the available interactive teller machines, or ITVs, and transact business via video with a teller based at Farmers’ operations center in Niles.

The branch was established for Farmers to test new customer service and technology initiatives.

“There’s no teller line. It’s almost like just a concierge walking you over to the machine,” says Amber Wallace, executive vice president and chief retail/marketing officer.

“You definitely had some [people] at the beginning that were a little intimidated by the technology. But we have a great team here,” adds branch manager Ricardo Cruz.

“They would come in. We would walk them though using our lobby machines here,”he says. “Customers love it. They come in all the time talking about the convenience.”

The adoption of technology in banking has only accelerated during the last few years, driven in part by the COVID-19 pandemic. Use of mobile apps is at 44% since the beginning of the pandemic, up from 33% before the pandemic, the American Bankers Association reports. Online use is at 26%, up from 24% before the pandemic.

In contrast, bank branch use is at 10%, less than half of the 21% before the pandemic. Use of ATMs has declined from 11% to 8%.

“Throughout the pandemic, our greatest learnings are on the digital side, where there has been an expected increase in activity,” says Bryan Carson, executive vice president and products and distribution director at Huntington National Bank. 

“We are largely witnessing reinforcement of what we already knew: simple transactions are increasingly moving online – or to ATMs – and the pandemic has accelerated that,” he says.


Traditional banks are developing their own technology but also partnering with financial technology companies – or fintechs – to offer products and services that allow their customers to directly conduct transactions such as depositing funds or even applying for loans without interacting with a person.

“My definition of [fintech] is companies that deliver or offer financial products to empower your customers,” says Brian Jackson, chief information officer at Farmers. Examples of services that fintechs focus on include mobile banking or lending or payment services, he says.

“There’s multiple different types of fintech companies doing the same type of product, [such as positive pay or invoicing],” says Jennifer Bidlingmyer, senior vice president and director of treasury management sales at Premier Bank. “We really have the option or the ability to choose the best in market.”

Many fintechs have focused on customer experience and removing friction in processes, setting a “level of expectation” with customers that probably was “a little bit ahead of what banks were doing,” Huntington’s Carson says.

“It really forced banks to up our digital game,” he says. “We partner with fintechs a lot to bring things to market quicker.”

In some cases, Huntington develops in-house customization and leverages that with a fintech to do “what they’re an expert in.”

At Farmers, Jackson’s team developed a mobile mortgage app for smart devices. “People can engage with their mortgage lender and do everything,” Wallace says, including photographing and uploading their documents. “They don’t have to see that lender until they sign those papers.”


Josh Toot, executive vice president and Mahoning Valley market president for Premier Bank, says that banks had “very little online presence” when he entered banking in 2001.

“Everybody came into the brick-and-mortars. It was all relationship, which I think it still is,” he says. “Today, everything is trending toward convenience.”

The trend was already taking place but the pandemic “pushed us even more toward that because it gave people that maybe didn’t use their phones or go online much the comfort level. They didn’t have another option,” he says.

“We were already trending toward that model – much more digital, ease of use, not having to come into the bank,” Premier’s Bidlingmyer says. The pandemic “pushed that trend much, much sooner than we were anticipating.”

Kathy Bushway, senior vice president and chief marketing officer at Premier,   says customers “have more electronic ways to process transactions, open accounts, all the things that have to happen to validate accounts. All of those things continue toward automation.” 

As Toot sees it, “This is just the tip of the iceberg. This is not the endgame,” he says. “I do think you will see banks continually evolve their technology to meet customer need and demand.”

Now, even with easing of pandemic-related restrictions and guidelines, and customers being able to return to the branches, they have adapted to the convenience of being able to conduct business remotely.

“You don’t see a lot of people trans-itioning back. They have set new behaviors in the digital world,” he says.

“From a customer perspective, on our online platform you can sign up for a deposit account, sign up for a loan, deposit checks,” Toot says. “You can transfer checks. You can pay your friends. There’s budgeting tools where you can do your personal budgeting.”


Huntington offers several examples of fintech tools in The Hub at its online banking site, Carson says.

These tools include Spend Analysis, which monitors spending, and Spend Setter, which allows customers to set monthly targets and which provides alerts when customers are getting close to the limits they set for themselves. 

“You can set a threshold and say you don’t want to spend more than $500 per month in groceries. You can set that and it’ll notify you when you’re near that limit,” he says. Customers also can use Hub tools to set savings goals.

Other tools Huntington offers include Money Scout, which analyzes customers’ spending habits, income and upcoming expenses and automatically moves money they aren’t using to savings, and Standby Cash, a digital-only line of credit – $100 to $1,000 – that bases eligibility on how customers manage their checking accounts, not their credit scores.

“The neat thing about Standby Cash is it helps customers reestablish or build credit in a very simple way,” Carson says. “The average time for them to get through the application and have funds in their account is under three minutes.”

Huntington used fintech for Money Scout but built Standby Cash in house, he notes.

Among the operations for which banks partner with fintechs is the processing of images of checks that customers deposit using their mobile apps. 

“Our whole back-end process is full of fintech,” Farmers’ Jackson says. “When you look at your teller line, how you process transactions at the teller line, those are dealing with fintechs. When you process though mobile and internet banking, you’re partnering with a fintech.”


The technology comes with a caveat. With the increased use of fintech comes increased exposure to fraud. One way Farmers attempts to mitigate fraud exposure is by limiting the opening of accounts to customers within a specified geographic region around northeastern Ohio.

“We really didn’t want somebody in L.A. opening a bank account,” Wallace says. Additionally, Farmers has had to increase cybersecurity to address attempted fraud.

“Obviously, fraud is a big issue in today’s world,” Toot says. “There’s so many different back-office things used in fraud prevention that throw up the red flags to let us know, let the clients know, so we can catch things before they get out of control.”

Some of Premier’s enhancements include positive pay, an automated tool that matches account and check information against a list of checks previously authorized by the issuer.

“Any kind of convenience, any kind of change where things are happening exponentially, we understand that there’s also a risk involved with that with our clients,” Bidlingmyer says. In addition to providing products like positive pay, for check and ACH transactions, Premier’s marketing department also sends risk information to customers to advise them what to look for and what measures businesses can implement, she says.  

“We use fintechs to help us with identifying fraud,’ Huntington’s Carson says. Some are good at detecting, by the way information is being keyed, that the entry is being made by a ‘bot’ rather than a person. “We’ve been able to leverage their expertise and knowledge to identify that much more easily than trying to develop it in-house,” he says.


Banks are also competing with fintechs, which – unlike traditional financial institutions – lack bricks-and-mortar branches.

“Sometimes they can offer a lower rate on a loan or a higher CD because they don’t have the overhead costs,” Wallace says.

There have been discussions at Farmers about offering online-only CDs that would offer a better rate because they don’t require staff to process.

“It takes quite a lot of technology to get there, a lot of infrastructure. And we’re not quite there yet,” Wallace says. Farmers is always expanding “in the back office” and working to take on more technology.

Still, bankers see a role for the human touch. Fintech can be used to provide commercial tools that improve efficiency but personal relationships still run commercial banking, they say.

“The complexity that goes into the commercial world is never going to be perfected by fintech,” Premier’s Toot says. “It’s a personal relationship type of business.”

Farmers’ Wallace says she conducts monthly surveys to determine what’s important to customers. Regularly topping the responses is having a relationship with the customer’s banker. People want the security of knowing they can walk into a branch and meet with someone who can address their needs, she says.  

“This is an evolving process,” Toot says. “Technology changes so quickly. Customer needs and customer expectations change so quickly that we’re continuously listening to what our clients need.”

Pictured: Ricardo Cruz, manager of Farmers Bank’s lab branch in Canfield, shows customers how to use interactive teller machines.