Locality Bank: Using Modern Technology to Serve Small Businesses

Jim Marous:
Hello, and welcome to Banking Transformed, the top podcast in retail banking. I'm your host, Jim Marous, founder and CEO of the Digital Bank Report and co-publisher of The Financial Brand. Small businesses are the foundation of the American economy with 30.2 million small businesses making up 99.9% of all of the businesses in America today. They also employ 47.5% of American employees.

Jim Marous:
Despite the size of this segment, small businesses have unique characteristics and challenges such as funding, payment processing money transfer, and more. In addition, most traditional small businesses have banking processes that are way too cumbersome and time consuming. My guest in the Banking Transformed podcast is Corey LeBlanc, co-founder of Locality Bank, a digital-first community bank located in Fort Lauderdale, Florida. Corey shares the mission of this startup and how Locality is using financial technology to make processes more efficient, saving money, and better serving its customers.

Jim Marous:
In November of 2021, Locality Bank received approval to become a state-chartered financial institution, making it the first new community bank in Broward County, Florida, in more than a decade. After a successful raise of capital, Locality opened for business in January of 2022, only three months later, providing a digital-first platform and a single branch to serve the needs of local businesses.

Jim Marous:
Before we dig into how Locality Bank is tackling the multiple challenges of opening bank in this financial climate and serving the unique needs of local businesses, Corey, can you share a bit about your background, the background of your executive team, and how the various roles from the past really prepared you and your team for where you are today?

Corey LeBlanc:
Yeah, absolutely. And I'm actually going to start in reverse of that though, I'm going to tell you the experience for my executive team and the vast majority of the people who have been down here in South Florida for over 30 years in the community banking space. So our CEO, Keith Costello, who is one of my co-founders, and Drew Saito, who is the other co-founder to the three of us who decided to start this thing, have been local community bankers in this specific market, Broward County, Palm Beach counties, as well as Miami-Dade Counties for quite some time, right? And they've seen a lot of change and they've worked through a lot of small banks that either got acquired through some M &A or have transitioned from larger companies to smaller companies, and so they have a tremendous amount of experience.

Corey LeBlanc:
On my side though, I started in the Air Force. I was a infrastructure architecture cyber security IT nerd that decided after about six years of active duty I was going to move closer to my family, wanted to kind of change some things up and try the public sector. And it just so happened a little small community bank in North Central Louisiana was hiring for a network administrator at the time. And we were like 11 locations, right about $640 million in assets, and I was like, "This is a cake job. I'm going to go in here, this will be a stepping stone to the next thing, and I could run this whole thing by myself."

Corey LeBlanc:
And then 2008 happens. And Community Trust Bank at the time, which we ended up rebranding to Origin, was strong, and so we started acquiring, growing fast. And so we entered into the Dallas and Houston markets and we accelerated growth of the company. At the time that I left that... Was there for 15 years in the community banking space, working specific in IT, held the roles of CTO and my last job title was Chief Digital and Innovation Officer, which was a really long way of saying I was the CTO but I didn't work in IT anymore. And our Chief Brand Officer just wanted to make it hard for me to register for conferences, I think, by giving me two titles.

Jim Marous:
Right.

Corey LeBlanc:
But I spent that time there, learned a lot, and realized that I had a passion for financial services. Because me and my wife, Cassie, we didn't really come from money, right? We come from low income families that struggled, and so the military was out of necessity for us, right? We've been together for a really long time. And when I got into banking, I realized that from a technology side, I could make an impact. I could change the way people interacted with their finances.

Corey LeBlanc:
And so when 2020 hit and I was sitting there at my previous job and I was looking at the day-to-day, a buddy of mine reached out and said, "Hey, I think we've never been more disconnected. I'd love to get your thoughts and I'd love to record some stuff with you about, how do you see banking changing out of this?" Right? And so this was like April 2020. Serendipitously, Keith was looking at starting a new bank towards the end of the year. He was dealing with a non-compete from his previous institution and was looking to do something different. So he reached out to me on LinkedIn actually. He wanted to ask me if he could start a community bank but digital native, could he do this on a modern platform? Could he build it out? Will it work? Right?

Corey LeBlanc:
And it started off I was just helping him get connected. And then I realized, Jim, really fast, I was having a hell of a lot more fun working with Keith in the evenings than I was doing my day job, and so I quit. And we started Locality Bank in January of 2021, an organization, filed for our FDIC and state charter with the Office of Financial Regulations here in Florida in March of that year. 10 short but very freaking busy months later we got approval and we opened our doors.

Jim Marous:
That's pretty amazing.

Corey LeBlanc:
Yeah.

Jim Marous:
You and I have talked about it before about, I've known you guys for five years, and about disrupting yourself, and you really took the pandemic as a time to just take a step that you probably wouldn't have taken if it wasn't during the pandemic. And it's really a step that has risk associated with it obviously. You were comfortable where you were, and this is a big step. But you're really serving the needs of a unique market segment, so can you give me a little bit of information about the segment you serve? We know a small business and all that, but how are the needs differentiated enough and the segment large enough for you to build a strong business case and a long-term existence?

Corey LeBlanc:
Yeah. So the one thing I'm going to say, I'm going to respond to the one thing you said though. You said like this is like this crazy decision or it probably had to be really hard, it was probably the easiest decision I made was to step out and do this because, as an IT guy, I'm a builder, right? And so if I'm not building something that creates value, that's hard or challenging, I'm actually very bored. So I always say it was way harder for the rest of my bankers to probably join than it was for me to do this thing.

Jim Marous:
Yeah.

Corey LeBlanc:
But as it relates to our segment, it's really clear. We are here as a community bank to serve local businesses here in Southeastern Florida, so Broward County, Miami-Dade, and Palm Beach counties. So we're in the business banking business, if you will. And not only do I think that this is important when you start to look at the way that local economies work, but you also start to look at the way the community banks are able to serve them, this modernized version of a business plan that we created, we felt was absolutely needed at this time.

Corey LeBlanc:
And so what COVID did was it gave us a tremendous amount of time to reflect on what we had been doing and how we would do it differently if we started from scratch, right? If we took a first principle lens and we looked at this segment, how would we serve them today? Would we go build this massive product over three years, spend millions of dollars to build the version of a bank that we think would be ideal, or would we work with customers to continue to build the perfect version of the bank for them individually?

Corey LeBlanc:
And it became really clear for us that not only was the segment looking for an opportunity to work with the community bank that had a different way of doing it, but that it was a tremendous opportunity. Not just in our market, but if you look across a nation, I mean, small business banking, medium business banking, however you want to call it, we say local business because we don't like putting the label on them necessarily, there's an opportunity for community banks to step up and do something to actually change the way that they serve their customers, and we're here to hopefully provide that blueprint.

Jim Marous:
So given that and knowing that, as you mentioned, there's probably not a bank out there that's not focused really on improving their small business and their local business relationships. And even FinTech firms are doing that and tech companies. How is Locality Bank different from other legacy financial institutions and other FinTech firms?

Corey LeBlanc:
This is the first question we get asked by every investor when we were doing our pitch deck is, why the hell do we need another bank? Right? So they're like, "There's plenty of banks that are [inaudible 00:09:25] like it, they're right over here."

Jim Marous:
Yeah. Oh, exactly.

Corey LeBlanc:
I think what it differentiates us, though, is the fact that we are a community bank, right? So first and foremost, the differentiating factor between us and a FinTech is we don't talk in terms of personalization, we're not just delivering a digital only instance. The technology is a tool set for our customers and our bankers to serve up. So what that means is that when there's an issue with online banking, your mobile or fraud or anything, that we're there to pick up the phone. We're there to drive out and sit down with the customer. I have that staff. I specifically have that in my business plan so that they're comfortable that there is no breaking point and that we get to understand the value of the customers. We're talking quality over quantity, right? We're not just trying to onboard a bunch of people to open bank accounts, we're trying to create lasting relationships that build value for the customers. So I think that's where we differentiate from a lot of the challenger banks or FinTechs out there.

Corey LeBlanc:
From a community bank, it's really easy. I could point to this with confidence I think, that we don't just sit here and pretend we're something we're not, right? And I say that in a somewhat of a challenging way, and I hope that's how it's taken because I love community banks, that's why we did this thing, but we're not going to sit on a legacy tech stack. We're not going to talk about this idea of valuable innovation with zero ability, infrastructure, architecture, or the ability to control the roadmap to actually make that happen. It's not taglines for us, right? We don't want to sit there and sell a marketing thing and talk about buzz words that we see are interesting or that might intrigue customers. We don't want to put that in our ads or our marketing. We want to actually deliver it, right?

Corey LeBlanc:
And so what we've done is we took that first principle concept and we built it on a platform that, on day one, created a really good version of a community bank, but it's going to continue to improve based on what the customers need. So that idea of innovation... I often don't even like saying the word innovation, right? I would prefer to say that we're the modernized version of what your community bank needs to be.

Jim Marous:
So you started this bank at a very interesting time. If you were to pick... You said you're the first local bank to be developed in the last decade. The reality is you could have probably picked easier times to start a bank than the beginning of 2022. What are some of the challenges you faced in getting your chartering since your inception? And just as importantly, what has surprised you based on what's gone on versus what you anticipated as you were developing this organization?

Corey LeBlanc:
Yeah, this is a fun question because there's so many things we've learned. You think you know until you actually see it.

Corey LeBlanc:
... so many things we've learned. You think you know until you actually see it. Right? But from the regulatory process, we have all had a really good relationship with regulators from our previous institutions and work. And so that process was actually not as difficult as I think it has been for a lot of others de novos during the same time period. Because from day one, we started to have a real conversation around what we were trying to achieve. Not what our business plan necessarily was. Not how we were going to do it. Not, again, those buzzwords or taglines about a modern bank or any of those things. What our actual mission and vision was and how we wanted to try to achieve it. And for us, that was we wanted to be able to empower local businesses to maximize their ability to grow or their potential.

Corey LeBlanc:
And with that, in that lens, we had a common objective, right? The state regulators, as well as the FDIC agreed that's something that's needed. So now we're just talking about how do we go do it? And then what we did is we sat down and we went over the business plan. We talked about the architecture. We talked about the partnerships. We showed them the due diligence and everything that we were going to do. But then there was conversations that come back to, okay, well, can you do it this way? Or does this disenfranchise a segment of the population? And even if that segment wasn't a customer of ours, did it impact the local community? Because if we're a community bank, regardless if you're our customer, we don't want to impact you negatively, right? We want nothing but a positive outcome for the markets that we serve.

Corey LeBlanc:
And so we adjusted things, but our big thing was anything to come back from regulator, we had to respond within 24 hours. We had to kick it back to them. We had to like take into consideration. And look, we pushed back. We absolutely did. We didn't disagree to everything, but at the end of the day, it was actually a really nice process. So we had great regulators that we worked with. The things though that... The fun part of that question for me is what have we learned that we didn't know? And I think we were talking about this the other day, Jim, is that you can build a system as simple and easy and as intuitive as you possibly can for them to use. They still don't necessarily want to, unless you create exponential value.

Corey LeBlanc:
And then oftentimes they still want to have a person walk them through that because they're busy. They have a lot of things going on. And so, the investment we put into like onboarding and online banking and mobile and all these things, we absolutely believe that they will be major factors in the success of the business. But today, there's a lot more physical interaction with customers involved in getting them on the platform and making sure that they're comfortable changing banks and understanding that we're here for a mission and a vision that is honest. And that's been interesting to me is to see how not resistant, I guess, but how difficult it is to convince a business owner that you're telling the truth, because they don't necessarily have that experience across the board.

Jim Marous:
Well, it really points out the fact, and we've talked about this a number of times in conferences and you and I together is that really as much as you want to go digital, especially a small business owner, they're still going to want somewhat of a hybrid version. They're going to want to have access to the personal banker. And sometimes because some of the stuff is brand new, they don't have time for the learning curve. They're going to say show me how this is done. And the reality is the pandemic threw a lot of personal people into... Consumers into the mix as far as how to do things digitally, but small business is a little different. You have different levels of experience and capabilities. So you also, being a digital first organization, you've created a lot of technology partnerships that really not only help your business, but also empower your customers. Can you explain a little bit about some of these partnerships and maybe a partnership that may be on the way if you have any?

Corey LeBlanc:
Yeah, absolutely. So one of the things that I set out to do from my side, from the technology is I was never going to sign another vendor contract. I don't want to sign anyone that is just delivering a service to me. Every single contract we've negotiated to this point has been a partnership conversation where we've agreed to a common objective that we could all focus on. And so we built the contract, the terms, and everything around achieving those objectives on both sides. That way it's mutually beneficial. Funny thing is that's really hard to find people that always want to do that. A lot of people want to take your money, but they don't necessarily want to put the work in with you. Right?

Jim Marous:
You're right. Yeah. Well plus, you're a smaller organization, so it becomes a business decision.

Corey LeBlanc:
Yeah, yeah. Absolutely. Yeah. Who the heck wants to start with a community bank with zero customers who has never done anything yet? You're not investing a ton of time and money. And so when we sat down with some of the partners that we do have, it became really clear that they aligned to who we were wanting to be and their companies, our company, again, shared this common path to what we were trying to achieve and that we could do this together. So that's where the Nimbus partnership came in. I've known Jeffrey Kindle, their CEO for eight, nine years now, personally. Always loved the guy's honesty. And I respect him as a friend first. And then when we started to evaluate and do the due diligence on core providers, the one thing that I wanted to make sure is again, we created a platform and infrastructure that supported me taking control of not just my data, but my customer experience and everything moving forward. That I was never stuck on a roadmap that was dictated by my core provider.

Corey LeBlanc:
And so that's something that the Nimbus team came to the table and was willing to do. And look, if you go look in the consumer space, there's tons of options. Go start looking in the commercial banking space. Not a lot of vendors out there that want to sit there and work with the Novo bank to go build the modern version of a commercial banking corp. But Nimbus stepped up to the plate and they really showed the values that we had in trying to push ourselves a little bit. And it's been a great partnership for us. And the fact that we not only got the charter and application process done in 10 months, but we launched the bank in 10 months on something that we started from scratch was pretty cool. That was fun, but with that, there's a lot of other players that come into making that happen.

Corey LeBlanc:
So we use companies like Payrolls for our bill payment systems, our A to A transactions. So those account to account transfers. We use Plaid so that we can use the external transfer in from other bank accounts to make it easier for the funding process or expanding the relationship there to continue with aggregation and furthering the access to the data on the other bank side, so the customer has visibility to their fuller financial picture.

Corey LeBlanc:
Working with a local company out of Miramar, I was actually just sitting down with these guys yesterday, to talk about the expansion of the relationship. It's a company called UDT. They help us do all of our internal technologies and systems and compliance. And we're talking to them about data projects and a number of other things that we could potentially do with them in the future as well. We're also working with a company called LIDACO and then obviously DocuSign.

Corey LeBlanc:
Both of those companies provide digital signature capabilities for our customers. So that makes it simple for the,, but the one that I'm really, really excited that we just recently announced and we'll be rolling the first versions of that relationship out here in the next couple weeks, month to two months is Herd Alert. So guys over there, Raj and his brother started an amazing company. We're using them for invoicing and tax services. So we're going to allow our customers to invoice directly and get paid directly inside the online banking and mobile application through an API connection directly into to Raj's company, Herd Alert. And what's cool is we get to accelerate the progress there. So instead going build an invoice platform, we get to get like a V3/V4 version of invoicing. But the stuff I'm most excited about with Herd Alert is the fact that we're going to work with them to continue to build out the visibility of the cash flow in general.

Corey LeBlanc:
Like how do you take merchant services? How do you take the invoicing? How do you take the bank data? How do you take the aggregate data from other institutions and collectively put that into a cash flow analysis system that gives the customer visibility to when they need capital or when they need to move money or when do they need to reach out to the banker? And on the backside tells the banker the information that we need to know on how we advise the customer appropriately. And I'm super excited about getting this first version, but expanding with them.

Jim Marous:
So really, it's interesting. We just had an interview with Rob Curtis from Daylight, which is another highly segmented financial institution, but just like what you just mentioned, they're trying to build platforms to enable their customers to do banking better and easier and more seamlessly. And they're really not focused as much on what they need to build internally as much as what they can build internally that can be used externally. And it's something that really digital empowers organizations to do this. And that's one of those missing links. Not to use one of these big platforms and just say, okay, here's a payroll service, and then you just put on a mainframe type scenario.

Jim Marous:
Another thing you guys do differently and in conversations I've had with you in the past is that your marketing [inaudible 00:21:41] are not about big ads and traditional acquisition campaigns. Can you explain a little bit about how you're leveraging social media non-traditional channels to really let customers know or prospects know about your services?

Corey LeBlanc:
Yeah, and it's funny. I was sitting down with my wife, Cassie, because as you know, Jim, she's kind of the marketing brains of my family. And so obviously when you start a bank, your entire family starts a bank. And so we were talking and the fun part for us is when we were doing this we wanted to be honest in our messaging. We wanted to bring in customers. We wanted to bring in customers who wanted to work with us for real and not just try to go and get accounts. But I think what's different and I think what you see is kind of this outside view of it that we haven't completely fulfilled yet is that we're working on building a connected ecosystem through our marketing platforms and through our marketing channels where it's not just for us. It's also for our customers and ultimately the community that we serve to utilize.

Corey LeBlanc:
And so a lot of the communication you see from us is talking about the market, talking about the things that we're doing, how we can help, what we're doing, honestly speaking about the services and stuff that we can provide, and then it's going to slowly work its way back in. So one part of this is fun is for me, is that I believe we're somewhat bold in the way we publicly talk. And at points, my CEO, Keith, who is unapologetically authentic, which is hilarious for me because he'll do these little videos where he is walking into work and he'll just talk and it's just random off the top of his head stuff. And I told him, I said, "Look, man." He'll send him over to me. I'm like, I'm never going to filter. You don't even have to ask me. Just post the things. The only way I'm ever going to tell you if this gets awkward or if it gets legal involved, then we'll have to talk about if you can post it or not.

Jim Marous:
Yeah.

Corey LeBlanc:
I was like, everything else, just put it out there. And I think that's different, right? Is that it's somewhat refreshing sometimes to see a bank executive just go out there and speak the truth and not be scripted, not be trying to, again, toe the line of the marketing team, but seriously communicate the brand. Another thing is we don't talk from a perch, right? We're not talking to people about products or services. We're actually in the community talking to prospective customers about-

Corey LeBlanc:
... be talking to prospective customers about what we're trying to change and seeing if that actually fits with what they're trying to do. And if that does, then we create a relationship and we can build it from there. For example, one of the really cool ideas that we had working with our marketing teams is we're creating a decal system where, if you're a customer of ours and you're a business, you're going to get a decal with a QR code. And so you put it on your window and it says this Locality logo has a QR, but instead of that QR taking you back to our website for our branding and our sales pitch, it's going to take you back to this company directory of businesses that work with Locality.

Corey LeBlanc:
So that QR codes is going to be unique for that business, so it tells their story as a company. And by virtue of that, we hope that tells people how working with a community banker, specifically working with Locality creates value. But again, it's this ecosystem company directory for one business to look at a peer of theirs, scan that QR code, understand their story, and see how they've grown and how they're working with, again, this ecosystem to be more successful. And stuff like that's fun for us because we get to tell our story without telling our story.

Corey LeBlanc:
We've also generated tons of video. I got some stuff playing here in the back with some amazing people that really hasn't been centered around just necessarily telling our story, but again, having the customers tell their path to success. And oftentimes, most of these businesses and even some of the largest ones here in our community, some of the most successful entrepreneurs, people who are really, really, I guess, respected, if you will, have started from some pretty difficult beginnings.

Corey LeBlanc:
And by telling that part of it and explaining how it's not just one person that creates a successful business, that it involves a banker, it involves a legal team, it involves partners, it involves other people in other industries working with you to connect the dots or introduce you to people that make success. And that's been really cool.

Jim Marous:
You're actually helping your customers market their services and you're the conduit. You're also developing, obviously, content for your site where organizations can see other customers and put themselves in those people's faces. So that's really interesting. So let's take a short break here and recognize the sponsor of this podcast.

Jim Marous:
Welcome back to Banking Transform. So today, I'm joined by Corey LeBlanc, the co-founder of Locality Bank, a brand new digital-first financial institution that serves the needs of local businesses. We've been discussing some of the needs of this unique market, as well as how Locality Bank is serving them and trying to build scale. So Corey, we've discussed your personal journey in the introduction of the unique digital banking solutions of small business community by Locality. So how do you measure success around the customer experience, engagement, and content delivery?

Corey LeBlanc:
Obviously, we use your traditional analytical tools. So when it comes to social or search and those things, we have paid content tracking. We're tracking interactions and the likes and follows and all of these things to measure what works, what doesn't. We do AB testing in the type of content that we deliver to see what actually connects with customers. What do they want to hear more of? Is it talking about our rate? Is it talking about the local economy? What is it that they want to hear? And then we make sure that we're trying to focus on that a little more.

Corey LeBlanc:
But some of the other things that we do to measure is we just have a customer service center who is highly interactive with our customers and we're putting survey systems. We're having conversations with customers, with board directors and investors. One of the things that we did at the beginning was said, "If you're going to be an investor of Locality, you're going to be a local business owner. You're going to be someone here in this market who is going to be interacting with us, and you're going to be a customer, and you're going to give us feedback."

Corey LeBlanc:
And so we're constantly having conversations, Chuck. It's not just looking at the stars on our app, reviews in the app store. It's actually sitting down and measuring the things that we do every single day and the impact that it actually has in the best way we can. And the only way to do that is to, again, sit down and talk to people.

Jim Marous:
It's interesting, our research shows that most financial institutes of all sizes do not really feel prepared to effectively use data and analytics to provide personalization, communication, and recommendations as to where customers should go next in their journey. How is Locality hoping to address this issue today, but also going forward as you get bigger?

Corey LeBlanc:
It starts with ownership. The big thing for us is not just where your dataset sits, but it's where it sits and how you have access to that data to actually control how you use it. And so most banks or financial institutions, they have their data that sits in their core provider, they have their data that sits in other aggregate sources. And for us, it's about creating this common centralized location where we have full access.

Corey LeBlanc:
So today, that's much more about reporting and understanding how the business is doing and understanding how the customer growth is looking and all these things because, again, we've only been in business for a little over four and a half months full production, a little over six months total as a fully chartered bank, but it's the roadmap on this. It's how do we then take this access and this ownership to the data and start to create visuals and access for the customer.

Corey LeBlanc:
So if we take all the data and we just use it for some sales or marketing, well, that's not really great for our customers. And why would they want to share data with us if that's how we use it? But if we can take that and provide insights to the customer on their business, because we have everything in a central location that can give them this full picture, and then on the back side of that, my bankers can see that data and utilize that information to better advise the customers on how they continue to grow their business or what the next steps in their business evolution might be.

Corey LeBlanc:
That's where it's important, but it's looking at the business entities and the way that we look at data as a whole that makes this impactful because, if we just sit there and say," Hey, look, we're going to take all the data, we're going to pump it over here, we're going to provide this insight. This is how much cash you had come in, this is how much cash you had to go out," that's great, but if we don't actually quantify that, if we don't actually measure that and produce some sort of common definition that's unique to each individual, then it's not personal and it doesn't create the value on the customer and it doesn't create the value on the banker side for us to go out there and have that conversation. It's just a report.

Corey LeBlanc:
And so we're working with UDT, we're working with Nimbus, we're working with a couple other providers, that hopefully we'll be talking about here soon, to better, I guess, define the data so that, eventually, what we can do is produce a really insightful dashboard for our customers to see this forward picture.

Jim Marous:
It's interesting. Along the same line, I'm a small business owner and I continually feel like I'm treated as a small business, but that my bank doesn't really understand what my business is. I'm sure there's other organizations out there that are very similar to me, but they've never connected, they never talked to me other than being a small business. This is obviously a tremendous miscalculation and not every small business is the same. Not everyone is a retailer, not everyone is a cash flow company. How is Locality Bank, going forward, going to hope to drill down to the uniqueness of each customer in each customer segment within this very highly specialized segment?

Corey LeBlanc:
Yeah. It's all those little pieces we've been talking about up to this point. And so again, that's why we don't like saying small and medium-sized business. We say local businesses because what might be defined as small business today in the industry, the business owner may not see themself as small. They may be exactly where they need to be and looking to grow. And so we try to, one, we look at the way we talk and speak and do, but for us, it's this continued focus of actually remembering we're a community bank and this investment of getting good bankers in the markets that we're going to serve so that we can sit down and understand not only the individual customers, but how the individual customers in their specific industries are affected or impacted by the economy around them.

Corey LeBlanc:
And so that the decisions and things that we pump back into system, into that data warehouse and all those other pieces we were talking about to produce those insights are being adjusted and customized. That's why, when I was talking about data, I talked about having a definition because, if we just map data to fields in a core system that a bunch of different banks agree, "Hey, this is what the current balance is. This is what available balance is. This is what interest rate is. This is their NAICS code," so on and so forth, it's not really helpful. For example, for you, it doesn't really, I guess, create a unique experience-

Jim Marous:
It doesn't define who I am.

Corey LeBlanc:
... that helps you. No, it doesn't help you. It's not helpful at all. It almost alienates you, in a way. And so for us, it's sitting down ... And that's why these data projects with us is in motion, is because we take these things and we're trying to make sure that the information we pump back out of it is specific, but it's going to be impacted by how we define it as a company and that's going to be influenced by our advisory boards, where we're sitting down with local industry experts and we're talking about what they're seeing in their markets, it's going to be influenced by the conversations we have with our customers, it's going to be influenced by time and how we see behavior and things shift and change. And so it's going to be a fluid thing for us.

Jim Marous:
So as we're getting near the end of this conversation, Locality Bank was introduced with a somewhat familiar set of services that small businesses need. How do you envision expanding your service set, either within the bank or on behalf of your customer base?

Corey LeBlanc:
Yeah. That's where the foundation, that infrastructure architecture was so important for us, is getting on a modern platform wasn't about saying we're a modern platform, it was giving us the ability to throw a lot of things at a wall and test a lot of things and market efficiently and quickly.

Corey LeBlanc:
The way I look at the product set is we had 10 months to get to market. We said, "Let's put a very common community banking set of tools and services in the application, but let's get it right. Let's make it work really, really well. And then from there, let's continue to build on it based off of what our customers need. And then let's iterate on that. Let's continue to always task and cycle and put it through that product workflow where we're not just analyzing how many customers are using it, but are they using it in a way that they're supposed to use it? Are they using it and is it creating enough value for the customer? If not, then let's figure something else out."

Corey LeBlanc:
But the way we wanted to make sure we're able to do that is ... Most banks talk in years if there's a substantial change that happens. So let's take COVID, for example. And this is why you said, "Hey, this probably would've been a ton of other really good times to start a community bank before 2020, 2021," but 2020 and 2021 showed us that the time for iteration that's happening inside of community banks or regional banks or banking, in general, is too slow. It's reactive and you're delivering services or fixes years later when people need it now.

Corey LeBlanc:
And so our idea of product is continue to evolve and iterate on weekly and monthly bases, within reason. There's got to be testing. There's got to be things so things are stable and secure and reliable and ...

Corey LeBlanc:
[inaudible 00:36:01] so things are stable and secure and reliable and familiar. Look at the market, look at the things that are changed and try to get in front of that, use that data that we have in the market, this public information, use the data that we have internally to see how we can continually improve the experience and the utilization of their banking services through Locality. A lot of that's going to involve things that we don't build, things that we don't necessarily deliver, but things that we can connect and make sure that are seamless for our customers.

Jim Marous:
Well, that's the beauty of a digital platform is that you could add and even subtract things really quickly. I mean failing fast, it's a term that everybody likes to use, but nobody really does it. Building fast and scalability are things that organizations like to talk about. Again, unless you're a fully digital organization, it's not easy to put those all in place and being a smaller organization also gives you some advantages that you can be a lot more nimble. Is geographic expansion a possibility in the future?

Corey LeBlanc:
Absolutely. Yeah, yeah. Right now as a De Novo bank, we got a three year runway in front of us that we get some things we need to do. We're hyper focused in the communities that we're at right now, being Broward County, Palm Beach County, Miami-Dade. We're building this thing to allow Locality Bank to have the opportunity to expand into any community that needs us, whether that's right here in Florida or beyond, but we're also building this to provide a blueprint or access for other community banks to accelerate their innovation strategies or their modernization strategies inside their companies as well.

Corey LeBlanc:
The big mission that we have is, again, empower businesses to maximize their potential or ability to grow. The other part of that is to enable community banks to deliver that. We hope that Locality Bank is the major player there. We think we will be, but we also want to work with other community banks to make sure that we're supporting the system of community banking in general, because we think it's absolutely important.

Jim Marous:
Again, you have the ability to not only provide banking as a service platform, but also embedded banking platform for your customers. You're really at a very good starting point where scale could end up not even being close to a problem, because you already have the foundation that you can scale up very quickly, but using other organizations as your selling tools in a way.

Corey LeBlanc:
Yeah, man. I've read your articles. I've talked to you for a long time. I'm listening. Right? Also, I see all these things on the technology side. The one thing I know how to do is build infrastructure and architecture to support change. In the world that we live in, especially in banking, that's absolutely necessary. You're a hundred percent on point. The version of the business plan that we have in front of us today, we're super excited about, but the future and the potential and possibilities of the way that we've built this thing to support other opportunities as they come, it's tremendous. We're super excited about it.

Jim Marous:
Finally, Corey, what recommendations do you give banks of all sizes on how they can better serve the small business marketplace? What have you learned that every bank could probably learn from?

Corey LeBlanc:
Yeah, don't be afraid to rip things down to the bare bones. Most people start by changing things by starting at the point in which their product, service or delivery is today and then working forward. Sometimes it just needs to be scrapped. Sometimes you just need to go back, sit down and think about if we did this from the beginning, that first principal lens, how would we serve this segment today, knowing everything we know? Quit looking at the product or service you're doing, quit trying to make yourself feel good about the ways you're doing it.

Corey LeBlanc:
It's not what this is about, and then don't be afraid to make that significant change and invest in supporting that fully and pushing it now, so talking about we're going to do this next year, putting this into the budget plan and having all these things, trying to maximize the... Sometimes you just have to invest in your customers and sometimes you just have to do it in a timeframe that makes sense. In most cases, what we're talking about today is it's now. You need to move now.

Jim Marous:
Boy, I'll tell you what, we say it almost in every broadcast, that you cannot wait. You cannot have that long-term vision. I kid often on a lot of my podcasts around the major bank in the west that basically said, "We're going to come out with a new digital banking platform at the end of this year. We've been working on it already for six months." It's 18 months of development, you're going like, "Guys, I'm sorry, but the first 17 months of that is old by now," and you need to be nimble.

Jim Marous:
I think what's interesting is your organization right now seems to be blending the very, very, very direct human touch to find out what are the needs of the marketplace beyond banking? Then, implementing it in a digital way that can be scalable. As you try to scale and as you learn as you go, you're really dealing with boots on the ground. I mean literally being able to see, talk to organizations, say... And when they come up with something, somebody on the sales team can come up to you and go, "You know what? An organization's really having trouble with this." You can say, "You know what? We can build that. We can help them out."

Corey LeBlanc:
Yeah. It's funny because we were talking the other day and I jokingly said this, but there's this misunderstand or misconception that if you make things easy and you make it intuitive, that it's valuable, that's not true. You can make it as easy as possible, but if you're not actually making sure that it creates that value, you've done nothing. You haven't incentivized anyone to do anything, much less changed their bank. It involves that. I think that we've lost focus on what it means to be bank and why we're here and what that ethical responsibility is, and it comes down to people. If you don't have the right people to sit down and talk with the right people, I think you're missing the mark.

Jim Marous:
Great point. Jay Baer, who we interviewed on our podcast about a year ago, said it really well, that convenience now is defined more by ease, simplicity, but most importantly, empathy where if you don't show the empathy, if you don't really provide the value add, you're just another bank or another retailer or another restaurant, whatever it may be.

Jim Marous:
Corey, thank you. I'm glad we had you on the show. I will already warn you. You're going to be called again because I'm going to get updates, because I know you have a pretty good scaling capability and that things are going to change very fast, Locality. What's really interesting is talking to organizations that are serving the needs of a very defined segment are really the organizations that are fun to watch, because scaling, I mean we have the entire country that we can scale if we find the segments that we can serve the best. Congratulations on your new initiative and hope to talk to you later.

Corey LeBlanc:
Thanks Jim. Man, we're having fun. Appreciate you giving me an opportunity.

Jim Marous:
Thanks for listening to Banking Transformed, the winner of three international awards for podcast excellence. If you enjoyed today's interview, please take some time to give our show a five star rating. Also, be sure to catch my recent articles on the financial brand and the research we're doing for the Digital Banking Report. This has been a production of Evergreen Podcast, a special thank you to producer, Leah Haslage, audio engineer, Sean Rule-Hoffman, and video producer, Will Pritts. I'm your host, Jim Marous. Until next time, remember just because the business is small doesn't mean it doesn't have unique needs that your financial institution can't help them solve.