Rethinking Fintech? A Safer, Smarter Approach to Ag Lending
Ag lenders understand the need to modernize their loan services with technological advances, but finding the right approach can be challenging. Farmers — like many entrepreneurial customers — want to spend less time at the bank and more time on tasks that grow their business.
Fintech partnerships offer a promising solution to innovate, from integrated lending platforms to online closings. These solutions would save small- to mid-sized lenders the expense of building a platform from scratch and also put them on a level playing field with national banks.
However, risk and compliance concerns that arise from these partnerships continue to hold them back, leaving their technology goals unmet.
So, what other options do these lenders have to meet customer expectations without taking on unnecessary risk? In this article, we explore the hesitation surrounding fintech adoption, the challenges banks face and alternative pathways to modernization that safeguard against risk.
The hesitation and risk of partnering with fintechs
Community bankers recognize the potential of technology-driven lending solutions. However, most are cautious about partnering with fintech firms. Once viewed as a fast and cost-effective way to modernize lending, fintech collaborations no longer carry the same appeal.
According to the 2024 Conference of State Bank Supervisors (CSBS) Annual Survey of Community Banks:
- 87.6% of community bankers say technology updates are moderately to extremely important, yet
- Only 9.9% consider fintech partnerships “very important” or “important” for implementing these upgrades.
Some 41% of community lenders cite cybersecurity risks as an obstacle to technological upgrades, while 32.7% list regulatory compliance risks.
The root of this impasse is these two industries have vastly different approaches to doing business. The fast-moving, “disruption” culture of tech startups clashes with the risk-management, compliance-driven mindset of traditional banking. This fundamental difference helps explain the gap between a community bank’s desire to modernize and its reluctance to rely on fintech partnerships to do so.
However, fintech is not the only path forward for community banks seeking to enhance their lending capabilities.
Bridging the gap between tradition and innovation: Secondary lending solutions
To stay competitive in ag lending, community lenders don’t have to choose between falling behind or taking on the risks of fintech partnerships. There’s a better way.
Agri-Access provides fast, secure secondary lending solutions that help you modernize, minimize risk and uphold the core values of community banking — all without sacrificing control over your customer relationships.
Our Scorecard program
Scorecard lending is our streamlined online loan application for qualified ag borrowers that delivers fast approvals. Borrowers simply complete a quick online form and receive a decision within 48 hours.
Our difference
At Agri-Access, our people have deep roots in ag finance. We understand the importance of adopting solutions that aren’t at odds with risk management and regulations. So our lending partners can enhance speed and efficiency while meeting regulatory requirements. Learn more about how our offerings can transform your ag-lending services.
Grow your lending power
Discover how Scorecard can transform your lending process. Learn how Agri-Access can help you grow without compromising what makes community banking special. Reach out to a Relationship Manager today to learn more.
