Farmers, ranchers and growers are not resistant to trying tech solutions. If they see compelling data showing that a tech investment will pay dividends through improved margins, speed and productivity, they won’t hesitate to adopt.
For lenders and community banks, fintech will play no small role in meeting the evolving needs of their ag customers. By providing value through innovations that streamline the lending process and save time in the office, ag producers will have even more reason to stay with their trusted bank. Here are some fintech-related trends that ag lenders can use to better serve their customers.
One ongoing policy issue for rural areas is expanding access to affordable broadband for residents, businesses and communities. Community banks that get behind the cause will not only be helping their customers, they’ll give customers access to better banking services, while making their communities more desirable to relocating commercial businesses and residents.
The good news is various federal and state funding opportunities are helping communities make headway. For example, in July 2022, the USDA announced $400 million in funding for the ReConnect Program to provide high-speed internet for residents and businesses in 11 states. Going forward, lenders can be a voice for the ag economy by voicing support for public policy that expands access, and by joining community partnerships that are working toward a common goal of better connectivity.
Open banking is relevant to fintech because it calls for opening access to customer data, allowing customers to aggregate all financial details into one platform. Community banks that recognize the value of open finance can serve ag customers in powerful new ways, particularly by meeting your customer’s digital expectations.
Through open banking, producers can get a real-time view of their financial position on a single screen based on transactions, inputs, yields, market pricing and current valuations. With this level of detail at their fingertips, producers can spend more time on strategic decision-making that grows their business and less on manual intensive tasks.
Rather than building the infrastructure or an app from the ground up, lenders and banks are pursuing partnerships with fintechs as a part of their tech strategy (while the fintech wins by expanding their customer base). According to Forbes, one in 10 bank execs say their organization is pursuing a BaaS strategy while 20% are considering it.
What’s the opportunity for ag-centered lenders and banks? Lenders that deploy fintech tools and cash management tools can provide enhanced account security for their ag customers and enable digital transactions.
Faster credit decisions
Faster lending decisions are showing up in many areas of lending. Ag is no exception, as producers are increasingly dabbling with lenders that promise quick decisions and fast funding. Community banks and other ag lenders can meet and exceed these offerings through partnerships with a secondary market provider like Agri-Access.
Our Scorecard program uses data-driven models to process borrower information quickly with fewer forms, giving us the power and intelligence to make decisions on loans for up to $4.0 million.
Reach out to a relationship manager today to learn more about how Agri-Access can help you stay on top of innovations in this evolving world of fintech solutions.