Executive Summary
Ask a community bank why it wants a fintech partnership and the answer usually comes back fast. We need deposits. We need fee income. Chris Rigoni’s argument is that those are outcomes, not strategies, and the gap between the two is where most partnerships quietly fail. Chris is EVP and Head of Partner Banking and Payments at Axiom Bank, with earlier payments and banking-as-a-service roles at Evolve, Coastal Community Bank, Webster, Sterling National, and BBVA, and he has spent a decade watching institutions confuse the result they want with a plan to get there.
His fix is not more ambition. It is more honesty. Know what your institution is good at, start there, and expand only where you can build or hire the expertise. Treat the fintech as a true partner rather than a vendor, because when one side gets into trouble the other cannot operate either. And before any of it, answer one question down to the last detail. Why are we doing this, and what result are we after? His closing challenge sharpens the whole conversation into a single test: take a hard look at your strategy and be honest about whether it is a strategy or just an outcome wearing the word.
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Key Takeaways
- Strategy, Not Outcome: “We need deposits” is the result you want, not the plan to get there. Chris’s core argument is that community institutions skip the strategy and name the outcome, then wonder why the partnership drifts. The work is defining what you know, what you are good at, and what result you are chasing before you sign anyone.
- Start Where You Have Expertise: The safest place to begin is the ground you already understand. If you have never done cross-border payments or lending, that is not where you launch a sponsor-bank program. Chris frames strategy in an unfamiliar space as starting a novel on a blank page, and his advice is to anchor the blue-sky opportunity to something you already do well or go hire people who have done it.
- A True Partnership, Not a Vendor Relationship: In sponsor banking the bank provides the service, but the relationship is a partnership, because if the bank gets in trouble the fintech cannot do business either. That means shared documentation, shared problem-solving, and a posture of figuring out how to manage risk together rather than being the no person.
- Product Has to Catch Up to the Rail: When RTP and FedNow arrived, many institutions asked what had really changed and treated it as just faster money movement. Chris’s point is that the value lives in the product and experience you build on top of the rail.
- Payments and Lending Are Moving Into the Background: The act of pulling out a twenty and taking change is disappearing. Payment now happens invisibly behind a one-click purchase, and lending is following, offered at checkout as four payments of twenty-five rather than a loan.
- Concentration Risk Hides Behind a Whale: A single large fintech partner that delivers a flood of deposits looks like a win to a salesperson and a problem to everyone in risk and finance. Chris presses institutions to ask how many deposits, over what time frame, and across how many partners, because one relationship carrying most of the book is the same danger as one commercial client carrying most of your revenue.
- Ideas Are Cheap, Execution Is Rare: Chris’s advice he wishes he had gotten earlier is that everyone can generate ideas, but very few people can execute them. His parting challenge follows from the whole conversation: take a hard look at what you call your strategy and be honest about whether it is a strategy or an outcome.
Full Episode Transcript
Alex Jiménez: Welcome to Next Best Action. Today I’m talking to Chris Rigoni, EVP and Head of Partner Banking and Payments at Axiom Bank. Chris has held payments and banking positions at Evolve, Coastal Community Bank, Webster Bank, Sterling National, and BBVA, and he has also worked as a consultant with Level.io. Welcome, Chris, and thank you for joining me. The topic I wanted to talk to you about is fintech partnerships. In the vast majority of the roles you’ve had over the past ten years, you’ve been working with fintechs, and I think you have a lot of learnings to share about what community banks and credit unions get wrong when they try to innovate through outside relationships. But before we get into the topic, I want to ask you about banking as a service. Given the recent wave of new charters the OCC and others have approved for several fintech firms, what’s the future of banking as a service?
Chris Rigoni: What I’ve seen, talking to folks and being in the industry generally, is that there are larger fintechs where it makes sense for them to explore a charter. It will be interesting to see how their first exam goes. On the banking side we’ve all been through an exam and know what that entails, but going through an exam as a bank versus going through your partner bank’s exam as a fintech are two very different things. As for the future of partner banking and sponsor banking, I think there will always be fintechs and organizations that do not want a charter and have no interest in being a bank. I know some fintechs exploring a charter now who once said that very thing, that they had no interest in being a bank, and now they are. But there will always be that subset of partners, and more entrants into the space, who have no interest in getting a charter, just because of the cost and the headache of getting ready to be regulated as a bank.
The other thing I’ll be interested to see is how it changes innovation at some of these fintechs. Being on the banking side, part of the consideration when you’re trying to be innovative is what the regulators are going to think.
Alex Jiménez: Right, how are they going to look at this when they go through your exam.
Chris Rigoni: The fintechs haven’t really had to think about that. So it will be interesting to see how they approach innovation, and how that shifts inside their organization, or how it shifts the examiner’s viewpoint. That’s an interesting topic to me overall. How do we collaborate on innovation in a regulated environment? How do we work with examiners and the regulatory bodies so we can be responsible but still be on the leading edge? Historically it has been, here’s your guidance, interpret it how you will, until we don’t like it and then we’ll go from there. I’d be interested to see how that relationship evolves, to where the examiners are part of the innovation team rather than sitting to the side of it.
Alex Jiménez: And you’ve kind of answered part of my first question, which was what institutions consistently get wrong when they try to innovate through partnerships.
Chris Rigoni: That’s a portion of it. The other portion is they don’t have a goal in place. In banking it’s so funny, because what you hear is we need deposits, or we need fee income. Well, that’s not a strategy. That’s banking generally. When you’re going into partner banking and becoming a sponsor bank for multiple fintechs, or a vertical within fintech, that’s the gold star of what you’re after. But that’s the outcome you’re after. That’s not necessarily the strategy. We have to dial that in and get down to, okay, what do we know? What is the bank good at? Especially for community banks, you have to take a very introspective look and ask what we don’t know, and what areas we probably don’t want to get into because we don’t have the expertise.
Alex Jiménez: Yep.
Chris Rigoni: If you’ve never done international payments and cross-border, that’s probably not an area you should start with in sponsor banking. If you’ve never done credit and lending, that’s probably not an area you should start, unless you plan on building out that competency and hiring folks with years of expertise. So that’s the main thing I’ve seen banks get wrong when they try to innovate. They don’t have a goal in mind. If they want to innovate their own brand and solutions for commercial, small business, or retail, they need that goal in mind to find the fintech that can do that very thing. And this goes for vendor relationships too. Seeing something at a conference, talking to someone for thirty or forty-five minutes, seeing their product and going, wow, that’s really something we should put in place. Is it, really? Does it align with your strategy? Does it align with the direction of the bank? Do you have the expertise to manage a product or feature like that? Everyone has to be introspective, honest, and transparent with themselves, and say either I don’t think we’re ready for this, or I think we should get ready and here’s how.
Alex Jiménez: When I worked for a community bank, before I was involved in quote unquote innovation, I hated when my boss would go to conferences, because she would always come back with, hey, Alex, check this out, we should do it. One time she came back and said, have you ever heard of these ITMs? They’re going to replace ATMs. We wound up going to the Carolinas and meeting with a bank that had them. I don’t know how much time and effort we spent on it, and we never actually rolled them out.
Chris Rigoni: Nothing.
Alex Jiménez: She was so excited.
Chris Rigoni: It should be part of the strategy, and you should be looking at what outcomes you get from it. A lot of organizations get really enamored with a technology. Nowadays, when you look at a lot of organizations, they want to do AI, but they don’t know why. They don’t know how it’s tied to a strategy, and that makes it difficult to make the move.
Alex Jiménez: Something I’ve seen in both credit unions and community banks is that strategic thinking hasn’t been required of the smaller organizations, because their strategy is, hey, we’re the local bank or the local credit union. So how do you start thinking about strategy when you haven’t had to before?
Chris Rigoni: The interesting thing is they do have strategic thinking. It’s just very narrowed to the areas they’re most comfortable with. They’re very good strategic thinkers for commercial, if they’re focused on commercial in a certain region or market. They know what works and what doesn’t, they know what they’re trying to accomplish, and they’re very good at doing those things in that specific market. Strategy becomes more difficult when it’s an area you’re not comfortable with, that you’re not educated on, or that has a certain amount of uncertainty. That’s hard for anybody. Saying, hey, there’s this blue-sky opportunity I can go after, what should we do, is like starting a novel with a blank page. Who’s the main character, what is the story going to be about, where is it. That’s really difficult for any bank. That’s why I say start with your comfortableness and expand from there, because you can relate the blue-sky stuff to something you already know. And if there’s an area you just can’t pass up where you don’t have internal expertise, you really need to go out and find the folks who have done it and can come into your bank and help you.
The other thing, and I’m sure you’ve seen this with credit unions and community banks, is the remote work argument. They’re in small-town America and they want everybody to come work in the office because everybody’s a family. There’s something to be said for that, and I’m not against people going into the office. But a lot of these organizations have to open their mindset a little. If we’re going into these innovative spaces, chances are the talent for those spaces isn’t going to be right here where we are. So we’re probably going to have to support hybrid or remote working to attract the talent we need. That’s been a struggle for smaller institutions that operate as a family, where folks have been there twenty-plus years, and their kids and grandkids work there too. That’s amazing, and I love those organizations. But they have to open the mindset a little to say, we need to bring in some folks who really know this space and can bring us to the next level.
Alex Jiménez: A lot of your career has been around payments, which is an area where we’ve seen a lot of change and innovation. Now we’re starting to see it in other places, like lending. What learnings have you had that you think apply across the other parts of banking?
Chris Rigoni: Payments is a funny one, because there are components that are critical and have direct negative or positive impact on the end user, whether that’s a commercial client, small business, or retail. And there are portions that are really up to the bank, where as long as you meet the criteria for the end user, it doesn’t really matter what happens on the back end. When RTP came along and became prevalent, and then FedNow, a lot of banks and credit unions were asking, how are we going to use this, what does this change? It’s just faster money movement. We have same-day ACH, we have wire, so what’s the difference? The missing piece is the product and experience you build around it. Whether it’s AI or the innovations happening in payments, we have to have that jobs-to-be-done, design-thinking mentality. What does the customer really want? Nobody knew they wanted an iPhone until it came out. You create experiences that delight, that create efficiencies, that have value for consumers. For example, RTP being used for PayPal payouts. PayPal was one of the first to say, if you want your money in thirty minutes or less, essentially instantly, you can pay one percent of the transaction. That was a whole revenue stream that didn’t exist before, and that’s RTP in the background. You have to develop the product around the rail, and the experience around the rail. That goes for a lot of the enterprise, whether operationally, in the back office, in IT, or in AI. We have to think about how much of an impact this is going to have on the customer.
Alex Jiménez: What I saw at a bank when RTP rolled out was a lack of thinking about what it meant on the product side. On the operations side we were ready. But our product people didn’t know what they were selling, so they wouldn’t sell it. When we pushed back, the response was, well, when Fiserv comes up with a product on top of RTP, we’ll sell that. That’s not innovation.
Chris Rigoni: No, no, no.
Alex Jiménez: And I see it being repeated with things like buy now, pay later on the lending side. People at banks and credit unions say that’s not going to have an impact, that’s not going to take away a loan someone would get from our credit union. But it will. It does. People just aren’t thinking about it.
Chris Rigoni: I think that’s the real crux of it. I did a webinar recently where I mentioned that payments, and increasingly lending, are moving into the background. It’s not something that happens, it’s part of something else that’s happening in the background as an action occurs. I buy something on Amazon, that’s one click. I don’t have to think about what card to use, I don’t worry about the payment at all, it just happens. The act of taking out a twenty-dollar bill, handing it to someone, and getting change back is gone, unless you’re using cash. The thought of money coming from me and going out to someone else is becoming less and less prevalent, especially for consumers, because the payment is in the background. We can debate whether that’s good or bad for budgeting and financial health, but that’s what’s happening. You pull up to a gas pump and your car pays for the gas. There’s a lot of innovation moving things forward, and lending is becoming the same way. When you check out somewhere, you’re not offered a loan. It’s not worded that way. You’re offered the ability to pay four payments of twenty-five dollars. To a consumer, that’s, okay, that gives me better cash flow in the short term, that sounds great. Or, I don’t have this hundred dollars right now, so I’d rather do twenty-five a week, because I can do that, and now I get something I wouldn’t have been able to get any other way. Those microloans, at volume, do make a lot of difference.
Alex Jiménez: So we have Uber, Amazon, Starbucks, all of that automating and embedding and hiding the payment, and buy now, pay later hiding or embedding the loans. OpenAI has rolled out, for paid ChatGPT clients, the ability to do banking through them with a partnership with Plaid. So now the actual experience of banking is being done with something else, with ChatGPT instead. To me the danger is that if we keep saying, oh, that’s okay, it’s just taking this tiny bit away from our experience, eventually there will be no need for different banks.
Chris Rigoni: I can see that. The difference to me is that if you are part of that innovation, you’re meeting customers where they are, and you become relevant. In the US, everybody’s always been afraid of the super app. We’ve heard that for the past ten years, that somebody’s going to create a super app and everything will be involved in it, and that’s where everyone will do business and shop and search. I think AI, and the functionality consumers are taking advantage of more and more, is that space now. That’s where they are. If I find something I want, my first thing is to go to AI and say, find me the cheapest price on this. There’s only one additional step to make the payment. If I could say, find me the cheapest price, let me approve it, you have my payment credentials, go ahead and pay for it, then why do I need to go to Amazon anymore? Why do I need to go to Target, or Walmart? So it’s interesting to ask how you become top of wallet in these types of experiences, and what value you’re creating for the consumer.
Alex Jiménez: We’ve talked about what the bank or credit union side is thinking. From a partnership standpoint, what do fintechs get wrong about community institutions in particular?
Chris Rigoni: They don’t treat the relationship as a true partnership. In sponsor banking the bank acts as the vendor in essence, we’re providing a service to a fintech client, but we’re in a partnership, because if the bank gets in trouble, so does the fintech. They can’t do business if the bank gets in trouble. So there has to be a true partnership of sharing documentation and being part of the solution. Within banks, product and compliance and risk are opposing forces, one pushing toward the edge of innovation and the other saying wait, let’s do this and this first. Just like in a bank, there has to be a true partnership to say, I’m not going to be the no person, but I am going to work with you to figure out how to mitigate the risks you probably don’t see. There are some things we plain and simple can’t do. But if there’s an ability to do what they’re asking, let’s figure out how to adequately manage the risks and do it in a compliant manner, and then let’s both go and do it.
Alex Jiménez: So what separates a partnership that produces real change from one that produces just a PR release and a pilot that never scales?
Chris Rigoni: Multiple things. Number one, the true partnership I just described. Number two, a sponsor bank that is good at evaluating product-market fit. The sponsor banking area is interesting in that, unfortunately, they’re not all going to be gems. Some won’t pan out, just like any entrepreneurial area. Looking at that and saying, I’m betting on the founders, I’m betting on your product, I’m betting on the product-market fit, that’s a really acquired skill. The neo-banking area is a particularly specific one where you’re trying to figure out whether it’s going to work. I’ve seen tons of neo-banks like a bank for pet owners, and it’s, okay, you’re not going to have twelve million users in twenty-four months. I don’t know that there are people who would revolve their banking relationship around their pet. Maybe there are, but I don’t see it. So it’s being able to recognize, this is something that will grow, and then the expectations being clear from both sides. This is what I expect from the relationship, this is what I want to help you do, and the other side being the same way. Those expectations being clear, and both sides holding up their end, creates a successful partnership. And it shows in the market, when a fintech is successful in their launch and successful adding new products. Especially in the consumer-facing area, you cannot just release a product and then that’s it.
Alex Jiménez: Mhm.
Chris Rigoni: You have to continuously add and figure out what else customers want, what features and functionality. You’ve got to keep iterating on that product.
Alex Jiménez: That’s a great point. The expectations piece is an issue. I worked with a neo-bank in Canada whose sponsor bank was one of the big four, and it was totally different cultures. The bank was very much about risk management and compliance, and the neo-bank of course wanted to do things that were probably not permissible. It was constant conflict between them. Setting expectations from the get-go should have been something they did at the beginning. So what’s the one question a community institution CEO should be able to answer before pursuing an outside innovation relationship?
Chris Rigoni: Why. Just like we talked about before, why. And not, I want deposits and fee revenue. It has to be, why, down to the nth degree, to say this is the result and the goals we’re seeking for the bank, and it aligns with our overall strategy.
Alex Jiménez: So getting down to the nuts and bolts of what your strategy really is. You’re gaining deposits, but how much, and over what time?
Chris Rigoni: That’s another thing. If you think about deposit gathering for a bank going into partner banking, there are a lot of avenues. Not all of them are going to be good, and not all of them are going to be profitable. You might get deposits instantly, but you’re not getting a lot of fee revenue, and you have a lot of up-and-down relationships where the fintech does really well and then doesn’t, and you end up offboarding. All of that costs money, to onboard, maintain, and then offboard a fintech. So you have to dig through those relationships to figure out which ones are viable. The other thing is, what if you get a whale? What if you get that large fintech that’s really great, tons of deposits, but that’s your only partner, or one of three or four, and there’s a major amount of concentration risk in that one partnership? It’s the same as if you were in commercial or small business and had a major client that was seventy percent of your revenue. That’s not a great thing to have. It sounds great to a salesperson, but on the risk, compliance, and finance side, it’s not. So when you’re thinking, I’m going to go get deposits, what kind of deposits, how many do you want to raise, and over what time period? And how many fintechs could realistically meet that need? If you want a billion in the next thirty-six months, that’s probably doable. A billion in the next six? Probably not. That’s the kind of detail I mean when I say, what is your strategy. I want deposits, I think we have really good historical expertise in this area, say healthcare. So I want to focus there, I know how we can gain deposits, I already have relationships and connections, I can talk to people and see what’s beneficial to them, and there’s not a lot of competition, only one other bank doing it. Those are the things you have to go figure out. And to your point, can ChatGPT help, can Claude help? Probably at least part of it, but you’ve got to refine it from there.
Alex Jiménez: To close it out, let’s do a little lightning round. I’ll ask a couple of questions, just answer and move on. What’s one book every banking leader should read?
Chris Rigoni: That’s a loaded question, because there are about eighteen floating in my head.
Alex Jiménez: Just pick one.
Chris Rigoni: If you’re looking to get into partner banking, Jason Mikula’s book on banking as a service is a really good one. It gives you a good overview of partner banking and helps you focus on the components associated with it.
Alex Jiménez: Good choice. Coffee or tea?
Chris Rigoni: Coffee.
Alex Jiménez: A coffee guy. I think I knew that about you. What’s one thing banking leaders need to stop doing right now?
Chris Rigoni: Chasing AI in everything, for everything. AI is the agile of the moment.
Alex Jiménez: As an AI company, we appreciate that. There’s the business case, and there are actual outcomes. That’s what we should be looking at. I totally agree. What’s one piece of advice you wish you’d gotten earlier in your career?
Chris Rigoni: Execution is key. Ideas come from everywhere. Everybody can come up with an idea. There are very few people in the industry, I can count them, who can actually execute on it.
Alex Jiménez: And the final question. What’s the one step forward you would challenge every banking leader listening to take?
Chris Rigoni: Take a hard look at your strategy, and ask, is it really a strategy, or is it an outcome?
Alex Jiménez: I love that. That’s fantastic. Thanks, Chris, for joining us. Maybe I’ll invite you another time. We could probably talk about this for hours, and we have.
Chris Rigoni: Thanks.