- FIS tapped JPM’s head of open banking and wholesale payments, Sairam Rangachari, as CPO of banking.
- FIS is a core provider that serves back-end technology for banks and other financial institutions.
- Rangachari and Rob Lee detail how recent moves in crypto stand to bring smaller banks up to speed.
- See more stories on Insider’s business page.
Community banks are hungry to regain market share back from their digital-only, upstart competitors. And one of the key providers of tech to local banks believes crypto could be the key.
FIS, which provides the back-end banking technology for financial institutions, is building out crypto features for its bank customers to roll out to their clientele. The goal is for community banks to leverage the new technology that has previously caused them to lose customers.
“If you look back at the demographics of a community bank 20 years ago, it reflected life — all sorts of demographics, all ranges. Today, it’s much more of a grayer demographic, a much older demographic,” Rob Lee, FIS head of global core banking and channels, told Insider. “It really started with our community banks lamenting the outflow of money into these crypto firms,” adding that once deposits leave a bank, “it probably never comes back.”
FIS provides core banking services to 16% of US banks, according to first-quarter data from FedFis, a financial data firm that tracks vendor data. Its bank customers include BMO Harris Bank, which just tapped FIS this week to modernize its core-banking system, and Citizens Bank, which uses FIS to run its online savings account.
FIS competes with the likes of Fiserv, which holds 40% of market share, and Jack Henry, which serves 18% of the US banking market, according to FedFis.
Lee and Sairam Rangachari, FIS’ first chief product officer of banking, are looking to bring fresh offerings to its banking customers. Rangachari joined FIS in April from JPMorgan, where he was global head of digital channels and open banking. He reports to Vicky Bindra, FIS’ chief product officer.
In May, FIS struck a deal with NYDIG, a crypto-custody firm and subsidiary of the $10 billion asset manager Stone Ridge, to enable banks to offer their customers the ability to buy, sell and hold bitcoin via their bank accounts.
The capability, which is currently being tested with a few early adopters, is slated to be publicly available by the third quarter, Lee said. The partnership will allow customers to provide bitcoin services within the banks’ mobile app (if it’s backed by FIS’ mobile product).
“Every and any time I have to leave the bank application, the bank is a little less important to me,” Lee added.
Also in May, FIS and crypto exchange CEX.IO partnered to offer consumer debit cards in Europe.
It’s not just a matter of rolling out cool new features, such as access to crypto, Rangachari said. It’s also how the experience is presented.
He highlighted embedded finance, which strives to bring banking services to where people are spending their time, as one such example.
Rangachari, who spent the past three years building JPMorgan’s open-banking channels for wholesale and treasury payments, is embracing the fintech ecosystem, despite the belief it’s one of the biggest threats to core providers.
“We don’t look at it as fighting it,” Rangachari said. “It’s neither friend nor enemy, it’s where they can help act as a catalyst to advance our mission, they’re a partner.”
It’s a marked turn from FIS’ build-first mentality about five years ago, Lee said. Since then, FIS set up a $150 million fintech venture investing fund last year and it runs an in-house fintech incubator, called FIS Impact Labs.