FinTech Female Fridays: Wendy Cai-Lee, CEO of Piermont Bank
How is Piermont Bank looking to change the industry of typical commercial banking?
Piermont Bank is reinventing how banking works for entrepreneurs. Piermont’s platform is built with the top pain points that entrepreneurs often face in dealing with their banks.
We understand entrepreneurs often face high opportunity cost having to wait several months for the credit process, so we automate and digitize our platform to turn around loans in half of the time entrepreneurs would typically experience.
We know the pain of calling your bank to find out about a mysterious charge and fighting over it, so we come up with relevant and innovative banking products such as a subscription program, which allows entrepreneurs to pay one flat fee based on their monthly balance and transaction volume. If the client has no banking transactions in a given month, we will reimburse their fee, even Netflix does not do that. For Piermont, we want to provide entrepreneurs with common sense, tailored banking solutions, nothing off-the-shelf.
How is Piermont able to execute loan decisions with half the time of a typical commercial bank?
We have developed a proprietary algorithm and a fully digitized platform that allows us to significantly reduce underwriting and processing time. It helps that we are a new platform with no legacy system burden so we can be creative and leverage the best financial technology.
We also have a very flat organizational structure, which enables us to make decisions quickly, consistently and diligently. Overall as a company, we also champion responsiveness to clients – a quick no is better than a very slow yes. All client inquiries are addressed within 24 hours.
How do you think FinTech is affecting the commercial banking space? How is Piermont commercial banking changing because of FinTech?
I believe forming FinTech partnerships is a good strategy to achieve digital transformation, but most banks and FinTech have not quite figured out how to work with each other effectively. There is a long list of hurdles standing in the way of meaningful Bank/FinTech partnerships, such as issues with integration into core systems, integration of credit risk, bank-specific compliance requirements and risk management.
However, in building the Piermont platform, I saw great progress in banking technology and the availabilities of vendor selections. That’s how we were able to build a fully digitized end-to-end system where we can service our core clientele with high efficiency as well as being a bank to fintechs. Our goal is to champion new banks like us as better partners for FinTech, with no legacy system issues, a more open platform and a willingness to adopt new technology. We are always in the lookout for good partners that can help us improve our client experience and make banking easy, relevant and purposeful for entrepreneurs.
Piermont invests in real estate, health care, manufacturing, arts and entertainment and women and minority businesses. How have you seen a shift in these sectors in 2019 in relation to FinTech and where do you continue to see growth specifically for 2020?
These sectors are where we see high growth and we have aligned our financing team who has decades of industry experiences to support them. We believe that each industry is different and has its own pain points. It is important that your banking advisor know what financial challenges to resolve for clients.
One thing that these sectors share in relation to FinTech is the expectation of better client experience, and that’s the key to growth in these sectors. To create the best client experience, banks are not only competing against other banks, but also innovative retail experiences such as what Amazon and Apple can offer. I think this is also an area that FinTech can bring value.
For the vertical on women and minority businesses – there is a huge increase on banking supporting these type of businesses (Trillion Dollar Blind Spot); how do you think this will shift businesses in the future and what type of businesses are you looking at for 2020?
With an abundance of information being shared, there has been an awakening, both on the equity and debt side, that supporting women-owned businesses makes good business sense. That said, there is still a lot of work that need to be done. Women-owned businesses are still facing more financing challenges than other businesses due to the lack of access. And many lenders have the antiquated risk perception as the infographic points out.
From a lender standpoint, I think women-owned businesses are better borrowers as we have seen a much more conservative risk appetite. Women are typically more detail focused and implement not the ones to say their business is going to be the Amazon of tomorrow. Women just don’t proclaim a big vision. Women may think about it and may have a plan to get there, but we take things step-by-step.
For 2020, we will continue to find ways to support women-owned businesses. As one of the very few banks found and led by women, we know firsthand how challenging it can be to secure financing and appropriate banking service. We know women & minority-owned business is underserved, and we want to help build and grow more exceptional businesses that are led by women and minorities.
How do you think Piermont Bank can help its clients withstand a looming recession?
One of the best ways to find out whether you have the right banking partner is how they can help you withstand a looming recession. People usually don’t think about their bankers when things are going well. When it comes to true relationship banking, it is going through the bad times together as well.
Piermont has the advantage of being the new player because we don’t need to worry about our balance sheet, and we have more room to help clients withstanding a looming recession. We also take a holistic approach to our relationship and pricing, which means we have clients’ business and personal accounts. This allows a holistic view of our client’s financial strength so we can come up with different ways to help our clients go through difficult times.
Reach out to Wendy on LinkedIn.