Mid-market financial institutions face a critical crossroads. They're caught between nimble FinTech startups and resource-rich mega banks, struggling with internal silos that limit their competitive edge. On this episode of Wrestling Payments, host Elyssa Morgan explores how community banks and credit unions can break down barriers and leverage their unique advantages.
Randy San Nicolas, co-founder and CEO of Braid, and Daryn Barney, founder of Role FinTech Partners, share insights on overcoming self-imposed limitations. "To break through and bust out of those silos, you actually have to step outside of the silo to look at the world in a different way," Randy explains. Both guests address Stripe's recent stablecoin announcement and what it means for traditional banking relationships.
The conversation reveals how mid-market institutions can turn their size into an advantage rather than a limitation. Daryn and Randy outline practical first steps for breaking down silos, from taking inventory of existing capabilities to fostering innovation-focused leadership. The key message: institutions already possess the charter and foundation needed to compete.
Host-at-a-Glance
π‘ Name: Elyssa Morgan
π‘ What they do: Vice President of Membership at NEACH
π‘ Company: NEACH
π‘ Noteworthy: Guides conversations helping payment professionals navigate modernization challenges and build for the future.
π‘ Where to find them: LinkedIn
Guest-at-a-Glance
π‘ Name: Randy San Nicolas
π‘ What they do: Co-founder and CEO
π‘ Company: Braid
π‘ Noteworthy: 25 years in payments, on a mission to return power to smaller financial institutions and help them compete with giants.
π‘ Where to find them: LinkedIn
Guest-at-a-Glance
π‘ Name: Daryn Barney
π‘ What they do: Founder
π‘ Company: Role FinTech Partners
π‘ Noteworthy: 25 years in payments and banking, helps mid-market banks build FinTech strategies and break down growth barriers.
π‘ Where to find them: LinkedIn
Key Insights
Self-Imposed Silos Are the Real Enemy
Mid-market financial institutions often create their own barriers to innovation by over-depending on core vendors and traditional processes. FinTech companies exist because core vendors moved too slowly to meet market demands. When banks tie their entire product roadmap to their core vendor's timeline, they can't see opportunities beyond their comfort zone.
Most barriers are mental, not technical. Banks already have the infrastructure needed to compete. They just need to change their perspective and stop waiting for others to define what's possible. Leadership must create a culture that embraces smart risk-taking. The key insight is simple: stability is important, but it shouldn't prevent growth. Breaking through silos means stepping outside familiar processes and exploring new partnerships.
Community Banks Hold Undervalued Competitive Advantages
Mid-market institutions have unique strengths that FinTech companies can't copy: banking charters, community trust, and regulatory frameworks. Stripe creates smooth user experiences, but they lack the relationship equity that community banks offer. Banks serve as gateways to the Federal Reserve and card networks. Even innovative FinTech companies need this infrastructure.
Banking charters represent years of regulatory approval and community investment. Startups can't replicate this quickly. Many community banks have served their markets for decades, building deep relationships and surviving economic downturns. This history positions them as infrastructure providers, not disruption victims. Size becomes an advantage when used strategically.
Proximity to Innovation Is Closer Than Perceived
Financial institutions underestimate their existing capabilities and how close they are to modern payment solutions. When operations teams understand what APIs really mean beyond marketing terms, they realize they're already doing many things that seem revolutionary in FinTech. The gap between traditional banking and modern payments is smaller than leaders think.
ACH operators and wire specialists have deep technical knowledge that matches venture-backed startups. The difference is presentation, not capability. Banks need small steps, not complete overhauls. Start with existing strengths like treasury services and add partnerships. Success creates momentum for bigger changes. Leadership just needs to explore possibilities instead of assuming transformation means starting over.
Episode Highlights
The Genesis of FinTech and Self-Imposed Limitations
Timestamp [07:00 - 09:00]
Randy explains how FinTech companies emerged because traditional core vendors failed to move fast enough to meet market demands. The fundamental issue isn't technology—it's speed of change. When financial institutions tie their entire product roadmap to their core vendor's timeline, they create self-imposed barriers that limit their ability to innovate and grow.
This dependency becomes problematic over time because it defines the institution's entire worldview. Randy compares this to asking an overweight friend for diet advice—you need to seek guidance from sources that have achieved what you want to accomplish. Breaking through silos requires stepping outside comfort zones and traditional partnerships.
"The genesis of FinTech is really rooted in a community financial institution's over-dependency on a core vendor that maybe doesn't move fast enough. It's not a bad thing; they should be stable and slow-moving in many ways. The problem over an extended period of time is that this becomes the norm. If a community financial institution's entire worldview, or product roadmap, is completely reduced to the core vendor's roadmap, it means they can't look beyond that."
Understanding the True Impact of FinTech Disruption
Timestamp [11:00 - 14:00]
The conversation explores how FinTech disruption affects traditional banking relationships and revenue streams. Daryn explains that companies like Stripe didn't succeed overnight. They identified friction points in traditional systems and built solutions to eliminate them. Their developer-focused approach and simplified pricing disrupted merchant acquiring by making complex processes smooth.
Banks face threats beyond losing customers. Non-interest income from cross-border payments is at risk. Business customers holding account balances represent deposit opportunities that could disappear. However, banks aren't excluded from these opportunities. They can participate if they understand the landscape and adapt strategically.
"From a bank's perspective, there are multiple angles to consider. First and foremost, what does this truly mean in terms of impact to the bank, especially if we do nothing? Many financial institutions today, serving cross-border payments using traditional methods, generate non-interest income from those relationships."
Leveraging Institutional Heritage for Future Success
Timestamp [25:00 - 27:00]
Banks can transform their historical legacy into a competitive advantage for future growth. Many banks are century-old institutions with deep histories of weathering significant changes.
The approach involves creating a vision where the next hundred years surpass the past. This requires collaborative work across all bank departments. The goal is connecting FinTechs with trusted bank partnerships rather than banks becoming another number in a large institution's portfolio.
"What we love to have conversations with banks about are their missions, what drives the culture within the organization, and what the next hundred years look like. We love to present an approach for how the next hundred years can be the best hundred years."
Taking Inventory Before Looking Outward
Timestamp [32:00 - 35:00]
Institutions should assess internal capabilities before seeking external solutions. Randy advises against immediately focusing on what's missing. Instead, leadership should discuss the changing landscape with their teams and inventory existing assets. This includes staff expertise, interests, and hidden capabilities.
Many institutions discover team members already developing relevant skills independently. }The goal is fostering a culture that embraces thoughtful risk-taking without requiring massive investments. Success typically depends on leadership commitment rather than technical capabilities.
"The first thing I would do is not look outward. The tendency is to focus on what we don't have, but I dare say that if you sat down with your team and discussed the changing landscape—how things are happening, and we have to change or be left behind—I bet you anything there would be some excitement around new opportunities and taking inventory of everything you already have."
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