Gain exclusive insights from Patrick Sells, Co-founder of True Digital Group, as he shares his visionary expertise in digital innovation and strategy in this illuminating interview.
Patrick, can you share your journey of becoming a thought leader and innovator in the financial services industry?
In college, I started a digital marketing agency that centered around helping companies adopt new technology that would help them evolve. I later became close friends with Steven Schnall, the founder, and CEO of Quontic Bank. Together, we had the vision to revamp his organization from a small community bank into a fully digital bank.
In 2018, I joined Quontic Bank as Chief Innovation Officer. This was my first time working within the banking industry. I faced a significant learning curve in this role as I began to understand the language of bankers and the industry’s structure. I spent two years helping Quontic create a road map to support its digital transformation goals.
While I was at Quontic, we became the first bank to launch a Bitcoin Rewards Debit Card, and we partnered with NYDIG to accomplish this. That project allowed me to form connections at NYDIG. I later began working with their team with the goal of offering similar Bitcoin financial services to the entire industry. Working with NYDIG offered me opportunities to interact with several of the major legacy providers, cores, online banking providers, payment companies and over 1,100 financial institutions.
These experiences gave me perspective on the common innovation challenges faced by financial institutions and vendors. This ultimately led me to form my current company, True Digital.
What inspired you to co-found True Digital Group, and what is the vision behind the company?
In my previous roles on both the banking and fintech sides, I gained firsthand experience with the common challenges financial institutions encounter during the tech innovation process. I noticed there was often friction between FIs and vendors, and this was a universal theme throughout the industry. This realization empowered me to build something that could solve these partnership roadblocks and led me to create True Digital.
The name for True Digital was inspired by the conversations I was having with community bank leaders while at Quontic. There were many discussions at the time around the potential of more banks eliminating physical branches to become fully digital. As more technology emerged in every aspect of our lives, I believed that every FI should focus on exploring how that technology could be harnessed to benefit its community, customers and employees. This pursuit better enables each bank to discover what their “true digital” identity is and how they can incorporate technology accordingly to match that identity – thus our new venture became True Digital.
As the co-founder of True Digital Group, how do you drive innovation and transformation in the financial services industry?
We’ve created True Digital to reduce the partnership friction that exists between financial institutions and vendors. Many banks already know how they want to innovate, and we aim to simplify the process to help them achieve their digital transformation goals. Our platform helps bankers more natively understand the world of vendors as they explore ways to innovate.
There are extensive available vendor options for FIs to choose from in the marketplace today. This makes the process of finding the right vendor to partner with time-consuming and frustrating. These difficulties are often due to a missing translation layer between FIs and vendors. The True Digital platform acts as a much-needed bridge. Our platform simplifies the vendor exploration, vetting and implementation processes. Using our network, bankers can access actionable vendor data and background information. My hope is that we will better equip FIs to identify products and services that can drive results and streamline innovation.
Looking ahead, I also want to empower banking leaders to deliver and, in a sense, create the vendors needed by the industry. I plan to accomplish this by creating a program catered to True Digital member FIs that are building solutions in-house. The goal of this program will be to drive greater industry innovation and enable our members to offer the new technology they’re developing to their peers. Our team will be sharing more details on this program later this year – stay tuned!
Could you tell us more about the vendor discovery and performance platform developed by True Digital Group and how it benefits financial institutions?
True Digital is the banking industry’s first digital vendor optimization network that is designed to support financial institutions as they work to discover, vet, implement and monitor vendors. Our membership is accessible only to banks and credit unions to ensure the platform is vendor-neutral. The only vendors that appear on the platform are those with working relationships with a bank or credit union.
Our platform is a unique industry example of FIs sharing vendor information with one another. The platform is structured with a give-to-get model where members can share their vendor experiences and solicit insights from peers. By joining the platform, our members agree to contribute to our database by inputting the vendors they work with and the products they’re using. Our members then receive access to the platform’s database, where they can vet new partners or find other peer institutions that can share details on partnership experiences from vetting to implementation.
The True Digital platform catalogs vendors and enables bankers to search for vendors based on several criteria including their goals (e.g., improving balance sheet management), specific categories (e.g., compliance) or specific products. On each vendor page, members can access details necessary for conducting due diligence as well as experience-based insights from peer FIs that have already partnered with each vendor.
Using our platform helps banks and credit unions understand the performance and risk factors they need to know about vendors before initiating relationships or when facing issues during the partnership. Ultimately, our platform helps FIs make meaningful progress in accelerating their innovation while eliminating the obstacles that create challenges.
What are the key resources and strategies you provide to financial institutions to foster innovation?
One of the best resources we provide is the power of community for our financial institution members. Some FIs may stick to the belief that to be truly innovative and remain competitive, they must keep everything close to their chest. The truth is, I’ve only seen this mindset hinder organizations.
It’s important to recognize that the capabilities and expertise any bank needs compared to other banks are often very similar, which means many FIs are working with the same vendors. I believe learning from peers is an incredible advantage that allows organizations to avoid the friction that comes with initiating vendor partnerships and ultimately amplifies their ability to innovate. That’s why our platform offers banks and credit unions access to a wide network of like-minded FI leaders who can provide the insights they need to build successful vendor partnerships.
In addition, the True Digital platform will help organizations bolster their compliance and due diligence capabilities. Many FIs struggle to establish thorough due diligence questionnaires (DDQ) prior to partnering with vendors, which leads to several inefficiencies and roadblocks. By leveraging our platform, banks and credit unions will be able to receive the risk details they need to know about vendors before initiating relationships to streamline their vetting process.
As the former Chief Innovation Officer at NYDIG and Quontic Bank, what were some of your notable accomplishments in driving digital transformation in these organizations?
At Quontic Bank, I helped make significant changes to the culture to ultimately reach the digital transformation we achieved. We needed the team to approach innovation differently, and that began by adopting the mantra, ‘progress, not perfection.’ By developing this core value, we were able to foster better teamwork and improve our working style. This was one of the key principles that ultimately enabled us to become the industry’s first bank to have a retail Bitcoin rewards product.
Another notable accomplishment – I was involved in the offering of our Pay Ring. This was the first wearable payment ring available in the United States that could be used as a tap-to-pay method. This feat was a unique and innovative step that allowed the bank to continue evolving within the industry. I felt that this aligned with our goals of making consistent progress toward our goals of acting as a forward-looking institution.
At NYDIG, my experience was similar in that we needed to gain a new perspective on how to scale innovation within the industry. Selling Bitcoin products was a novel concept at the time, which meant we not only needed to share the value of our product but to enable financial institutions to understand how we fit into their risk management standards. Knowing the regulations and standards banks must look to before launching new products, we created a framework that answered the critical due diligence questions banks must consider internally to establish stronger sales.
During my time at both institutions, I also prioritized finding ways to transform our teams internally. Initially, our teams were made up of crypto experts and developers who were so ingrained in the technology they weren’t often approachable to traditional financial institutions. To change the cultures within the organizations, I knew we needed to attract individuals that were strong tech innovators but typically may not have pursued careers within the banking space. Blending the talents of our crypto experts and these new tech visionaries entering the space offered our teams a strong foundation to build trust within the industry and create a strong approach to building cutting-edge technology.
How did your role as Chief Innovation Officer contribute to Quontic Bank being named Forbes’ #1 Digital Bank in 2022?
During my time as CIO at Quontic Bank, my role was primarily to till the soil and help cultivate a strong foundation that could position the institution to flourish. I absolutely give their team all the credit for the incredible recognition they’ve earned, and I’m impressed by their innovative accomplishments.
What are the key factors to consider for effective vendor management, and how can financial institutions optimize their partnerships with fintech vendors?
First and foremost, a financial institution’s management needs to have a strong grasp of the mapping of the FI’s vendors so that they can effectively provide oversight and manage vendor risks and opportunities.
Second, having more information about the available vendors in the market allows financial institutions to more efficiently find vendors they need, improve their negotiating position and conduct due diligence.
In your interactions with nearly 1,100 financial institutions, what are some common challenges they face in digital transformation, and how do you address them?
The challenges financial institutions face are often multi-faceted, depending on where they are in their digital transformation journey. One pain point I’ve often heard is that after an FI has found a new vendor – through a conference, pitch or online search – they are challenged to conduct online searches to compare vendors and find the best fit for their organization. However, this method doesn’t guarantee all the necessary information. Our platform recognizes this need by providing access to a wide range of vendor profiles with data insights, compatibility analysis and referenceable banks accessible to ensure FIs make the right decision.
Another pain point I’ve seen is when FIs are evaluating a vendor and face difficulties connecting with references to conduct due diligence before partnering. Through our platform, members can discover peer institutions already partnered with each vendor and easily connect to learn more about their implementation process and the vendor’s performance.
Lastly, as FIs move further into the partnering process, overlooked details may surface about the vendor’s tech operations that don’t align with the bank’s risk and compliance structure and ultimately make the partnership unsustainable. If the FI has not considered other partners, restarting the entire discovery process can be daunting, often leading to paused efforts and a sense of inertia among the bank’s team. Our platform offers a comprehensive view up front of the various products and vendors in use by peers today, and other insights FIs need to know before initiating a partnership. This ultimately avoids any wasted efforts and reduces the time it takes to identify vendors that could be a potential match at the very beginning of their search.
What are your thoughts on the future of banking and the financial services industry as a whole, and how can organizations prepare for it?
I believe adding a wider range of tech capabilities will be a winning strategy for institutions moving forward. Banks today have a greater ability to take control of their technology and data, and that can be used to their advantage to expand their offerings and the customers they are able to serve.
When it comes to innovation, the power of community in the banking space cannot be understated. Ultimately, the FIs that adopt the approach of widening their industry networks will be better positioned to experience vendor partnership success.
Leveraging our community-oriented platform enables bankers to access perspectives from peers and understand how vendor technology works with various systems. We are empowering the community and regional financial institutions not only to partner with one another but to build stronger vendor relationships that will lead to faster and more seamless digital transformation.
