Facing competition from fast-innovating financial technology companies and deep-pocketed national banks, Thomaston Savings Bank recently joined a consortium that aims to keep its nearly 80 members on the cutting edge.
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Facing competition from fast-innovating financial technology companies and deep-pocketed national banks, Thomaston Savings Bank recently joined a consortium that aims to keep its nearly 80 members on the cutting edge.
“We have been around for a very long time,” said Jonathan Gilbode, senior vice president and chief digital banking officer at Thomaston Savings Bank. “We want to make sure we are around for another 140 years. We have to stay competitive.”
Founded in 2018, Alloy Labs Alliance convenes hundreds of representatives from community and mid-sized banks to share experiences and best practices, and to jointly pursue innovative technology and new banking products.
Thomaston Savings, with $1.6 billion in assets, signed onto Alloy Labs in October after exploring the organization based on a recommendation from a friend of Thomaston Savings President and CEO Stephen Lewis.
“It’s really all centered around innovation, trying to enable banks our size, smaller community banks, to pool resources and collaborate and network to come up with new products and services,” Gilbode said. “It will probably uncover solutions out there we otherwise wouldn’t know to look for.”
The pandemic drove a greater share of Thomaston Savings’ customers to online services, making it worthwhile to invest in keeping abreast of the latest banking technology developments, Gilbode said. Alloy Labs is like a one-stop shop where Thomaston Savings staff can learn about new products and practices, he added.
“It is nice to have a body outside these four walls to keep us in tune with what’s coming down the road,” Gilbode said. “It might not be something we invest in, but at least we are aware of it. We are aware of competitive threats that might either come from large banks or fintechs.”
Finding solutions
Emmett Shipman, vice president of market development for Alloy Labs, said the business started with a dozen partner banks five years ago but has grown to nearly 80 members with more than $250 billion in combined assets. That represents a “top 25” financial institution, according to Alloy Labs.
Alloy Lab’s partners range from $350 million in assets to $40 billion, Emmett said. The typical bank partner has between $1 billion to $5 billion in assets, he said.
Staff work entirely online. Alloy Labs CEO Jason Henrichs lives in Minnesota. Co-founder JP Nicols lives in Seattle. Shipman is in Massachusetts.
Alloy Labs has monthly meetings of general membership and convenes member committees to work on areas of broad interest, like cryptocurrency, cybersecurity, marketing and strategy.
Alloy Labs also hunts for startups that might be able to add value for members and makes the introduction.
“We find smart guys out there who are finding solutions to the big problems and bring them to the table,” Shipman said.
One of those startups Alloy Labs has introduced is GetCarefull.com, which provides tools to protect seniors from fraud, including alerts for their children and caretakers. This protects existing customers and generates a connection with, and goodwill from, the generation that will eventually inherit that wealth.
Another product emerging from Alloy Labs is CHUCK – a new peer-to-peer payment system that enables bank customers to transfer funds to other peoples’ debit cards or bank accounts, regardless of whether the recipients’ banks are CHUCK members.
“We are constantly scanning and understanding what are the conversations our members are having and we are taking those conversations and putting them in action so we can drive toward tangible outputs that are driving value for our banks,” Shipman said.
It costs $35,000 to join Alloy Labs. For an additional fee – which Emmett said he could not disclose – banks can join a venture capital arm of Alloy Labs that invests in financial technology startups.
Alloy Labs has three member banks in Connecticut, including Thomaston Savings, Liberty Bank ($7.4 billion in assets) and Savings Bank of Danbury ($1.5 billion in assets).
Alloy Labs is speaking with several other potential members from Connecticut, Shipman said.
