By admin 
Certification programs for banking as a service specialists do not yet exist and the roles in BaaS are still evolving. But like the Standards for this sector are being improvedit is important that community banks leverage this elusive expertise.
“It used to be that (BaaS) was something you could figure out as you went along,” said Ryan Hildebrand, Chief Innovation Officer at Bankwellbank in New Canaan, Connecticut. “Now it’s almost imperative to have a pair of eyes that have seen a lot and lay the foundation from the beginning.”
Financial institutions face a number of obstacles recruit external or nurture talent from within.
Bankers with experience in BaaS may demand a premium to switch, or may need a compelling reason to do the same work at another institution. Community banks that want employees to work locally may have difficulty finding employees from larger companies willing to relocate. When bringing in talent from within, they will likely still need to turn to external consultants to help upskill or reskill employees.
Looking for outside talent
The ideal recruit for a BaaS bank ‘is someone who understands the boundaries of traditional banking thinking, but also knows how to cultivate relationships with fintechs” said Brian Love, head of banking and fintech at executive search firm Travillian.
Hildebrand has experience on both sides of the coin. He was vice president of finance at Simplewidely recognized as the first American neobank taken over by BBVA in 2014 and to block in 2021. He co-founded Seed, a small business neobank that was sold in 2019 to Cross River Bank in Teaneck, New Jersey. From there, Hildebrand oversaw the payments and BaaS business at $8.8 billion Cross River before assuming the role of president of LSBX, the BaaS division of Lincoln Savings Bank in Reinbeck, Iowa.
Hildebrand points out that as a startup founder, he can empathize with the mindset of fintech founders, including their need for speed and growth. His fintech experience also helps him assess the suitability of a partnership for a bank, especially in terms of risk and shared values.
When sourcing talent from fintechs, banks should look for candidates who can communicate well with teams that don’t have the same innovation culture they are used to.
“The problem is that if you go too far in a certain way, with someone who has never worked in a bank, there can be frustrations about how quickly things get done,” Love said.
When involving other banks that could be competitors in the BaaS space, the hiring institution must make a compelling case for itself.
Sunrise benchesin Sioux Falls, South Dakota, specializes in prepaid debit cards, demand deposit accounts and consumer loans. Tyler Seydel, chief fintech officer at $2.4 billion Sunrise, said the bank is targeting candidates with experience in the prepaid space, ideally people who have worked at other banks that issue prepaid cards and direct connections have formed with fintechs instead of a middleware provider.
“They know what balls are in the air,” he said.
There is still the question of why such a director would leave his current role and move to another bank.
“The most prominent BaaS banks may have a few layers of people below the lieutenants who are looking to move up,” Love said.
For Seydel, a big appeal of Sunrise is its social responsibility. Sunrise is a community development financial institution; a certified B Corporation, meaning the nonprofit network B Lab has been found to meet social and environmental standards; and a member of the Global Alliance for Banking on Values, a network of banks supporting positive economic, social and environmental change.
“Sunrise has a mission beyond the margin component,” he said.
The bank is also looking for new BaaS talent from interns, such as from the Carlson School of Management at the University of Minnesota in Minneapolis.
“Students bring countless ideas and they are your future target group or even today’s customer,” says Seydel.
Supplement with talent from within
Sunrise also cultivates internal talent by assessing employee performance transferable skills.
For people in customer service, such as universal bankers, “Could they develop into customer relationship managers?” Seydel said. “They already understand the basics of finance, money movements and generally the jargon.”
In some cases, providing internal talent may be a necessity.
“The smaller community banks like to have people on site,” said Bryan Mulcahey, managing partner at financial services consultancy FS Vector. “It will be very difficult to recruit an experienced banking-as-a-service employee who also happens to live there or is willing to move to a rural area.”
In addition, existing employees understand the bank’s culture and operating systems. Mulcahey recommends transitioning top performers from the existing bank compliance program to the BaaS team and filling the positions they have vacated.
“Bringing in a completely new team would be a disadvantage for the culture of a bank,” says Hildebrand.
Sunrise Banks has a largely remote workforce. Seydel believes that forcing employees to work onsite would have a negative impact on recruitment.
The BaaS recruiting landscape
In 2021 and 2022, Travillian conducted several consecutive searches for key leaders for banks’ BaaS divisions, namely the positions of ‘fintech president’ or ‘chief fintech officer’ and ‘chief risk officer’. Since last year, that has given way to mid-market searches for experts in program management, Bank Secrecy Act compliance and risk. Love notes that there is less emphasis on growth and more focus on building infrastructure for the sake of future growth.
“The trend I’m hearing is more of that reactive ‘let’s strengthen our risk and compliance department so that we can execute this initiative properly and we don’t have a staff shortage,’” Love said.
Mulcahey sees banks hiring for roles as implementation managers, or people who help a fintech set up and complete due diligence, technical integration and testing with third parties such as card networks; relationship managers, who are the main point of contact between the bank and its fintech partners at all times; and compliance officers, who oversee a fintech partner’s policies and procedures, review suspicious activity that the fintech escalates to the bank and marketing materials before they are posted, and monitor complaint logs.
Community banks must be willing to pay a premium.
“If you bring in people from existing issuers, you’ll pay a lot more than you think because they can quickly close some of that knowledge gap,” Seydel said. “That has really taken off in the past 24 months.”
Konrad Alt, a partner at Klaros Group, suggested in a July interview that community banks look for talent from regional banks, which naturally have a higher pay scale.
This is all part of the higher costs of doing business in BaaS, including buying or building the necessary technology and preparing for more stringent procedures exam questions.
“New talent is expensive, consulting is expensive,” says Hildebrand, “but it’s more expensive in the long run to get a consent order.”