Agora Brings Real-Time CX To Community Banks, Backed By The ICBA And The Venture Center

Agora Services is bringing advanced customer-facing digital tools from Europe....

Contributor: Tom Groenfeldt 11 February 2019

Agora Brings Real-Time CX To Community Banks, Backed By The ICBA And The Venture Center

Agora Services is bringing advanced customer-facing digital tools from Europe to help community banks, regional banks and credit unions compete against the sophisticated mobile banking apps offered by the nation’s largest banks.

The Independent Community Bankers of America (ICBA) selected Agora as one of 10 startup companies to participate in the ICBA ThinkTECH Accelerator. The program, based in Little Rock, Arkansas, focuses on banking product development for the benefit of community banks and their customers. Companies that are selected receive a $75,000 initial investment with the potential for follow-on investment up to $100K from The Venture Center at the end of the 12 week program.

Agora provides real-time banking that sits in front of legacy core banking platforms and provides such features as mobile accounts, shared accounts, children/parent accounts, advanced real time card controls, budgeting and saving tools and money pooling.

The company was founded by CEO Arcady Lapiro who was an executive at one of Europe’s leading online banks, Fortuneo Bank, with over $25B in assets. He says community banks need help in competing against the banking giants who have billions to invest in technology.

“We tell them there is all this digital banking coming, and if you want to fight you need to fight with the same arms. We’re providing what they need to fight back in terms of user experience. For traditional banks which want to provide user experience and new products there is no choice in the U.S.”

Lapiro said he thought about bringing a new core system to the U.S. but he doesn’t see much appetite for replacing existing cores, even though many are 30 years old or older.

“Agora helps banks enhance their legacy payment platforms (without replacing them) for a better user experience,” is the way he explains in a blurb on the ICBA web site.

Regular banks are fed up with their existing platforms, he said, but moving off them can be a nightmare.

“The banks know they need to do something, but they go to FIS, Jack Henry or Fiserv and the vendors want a seven-year contract.”

He thinks the smart solution is to keep what works, like current accounts, on legacy platforms and add an agile front end.

“We believe that offering key FinTech features with our technology is easier for the bank and most important cheaper,” he said. “Our platform is live; we don’t sell PowerPoint.”

Agora’s platform is based on the latest European challenger bank tech — less than three years old — already serving hundreds of thousands of clients. At this stage the source of the technology is confidential, said Lapiro, but he expects to announce it in June along with some strategic deals the company is working in the U.S. The technology was vetted by Mastercard and by the Venture Center, he added.

The Venture Center in Little Rock, Arkansas has run a fintech accelerator program for FIS for several years. When ICBA went looking for a way to help community banks improve their technology, it chose The Venture Center because it was the accelerator with the most understanding of banking.

“The ICBA ThinkTECH Accelerator is focused on identifying and accelerating the development and growth of early-stage financial technology ventures that will spur the most innovative and beneficial community bank-fintech partnerships,” said ICBA Services Network COO Kevin Tweddle.. “The companies selected as finalists have all shown great possibility to fulfill current community banking needs while creating opportunities for the future. It’s all about creating that high-tech, high-touch future of community banking.”

The first class, or cohort, is on it sixth week; two of the original 10 dropped out because they couldn’t meet the residency requirement while running their companies.

“Community banks are concerned about fintechs,” said Wayne Miller, executive director of The Venture Center. “Community bankers have the relationship with customers —as we shift to a digital world, how do we help them leverage technology to exploit those relationships in a way to make them a winner and not lose customers."

The concern for community banks is that digitally savvy customers will move to the big banks whose mobile apps typically rate at the top of industry surveys by firms such as Javelin Research & Strategy.

Community banks represent 97 percent of the banks in the country and are key providers of small business and agriculture lending, said Miller, but community banks with half a billion in assets can’t build their own solutions.

The ICBA ThinkTECH Accelerator program attracted 200 applications from 47 states and six continents. ICBA selection committee members, which includes several bankers, selected 10 candidates for the program.

“The first thing we look for are solutions that are addressing genuine problems and not disintermediating the bank,” said Miller. “Most of the companies have raised from a few hundred thousand to a few million. We look hard at quality of the team, what they have done before. They likely have customers, some traction and some rate of return. They may have only three to five customers, but they can show proof of value. We are trying to accelerate their got-to-market.

“A really cool thing occurs with each cohort — they will build great relationships. Some are great at technology or sales or hiring or building advisory councils so they share experiences. We try to ensure the companies in a cohort are not competitive.”

Tweddle said ICBA wanted a program that would have a tight focus on solving problems for community banks with next generation technology in areas like data analytics, payments and cyber security. Last week the group met with regulators from the Federal Reserve, FDIC and the office of innovation at the CFPB.

“It was eye-opening for the fintechs to see how regulators think, and it was helpful to the regulators as well.” At least 20 bankers will participate during the program to see what the fintechs are doing and provide feedback, he added, and it will let fintechs hear about opportunities at the nearly 5,000 community banks.

The state partly funds The Venture Center, which applies for a grant each year. So far seven companies that have come through the center’s FIS accelerator have moved to Arkansas.

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