In This Episode
Join us for Episode 28 of Mighty Finsights, where Rory Holland interviews Jorge Garcia, Co-founder and CEO of Linker Finance, about the digital banking needs that community banks have for their commercial clients. Jorge shares his journey from Honduras to the U.S., lessons learned as an internationally competitive swimmer, and how these experiences shaped his entrepreneurial spirit. Jorge also talks about how his relationship with his wife and co-founder has also affected the growth and health of the company overall. The conversation also explores the unique economic role that community banks play in the U.S., how the future could play out for those institutions, and why doing things the hard way can actually be a key to success in a crowded marketplace.
Key Takeaways
- Linker Finance provides digital banking solutions for commercial banking clients.
- Jorge’s background as an international swimmer instilled a long-term goal mindset paired with skills to execute in the short term.
- Community banks are responsible for the amazing health of small businesses and the U.S. economy
- Fintech companies are increasingly looking at the commercial banking sector as an opportunity to innovate.
- Building relationships is key in marketing to community banks.
- Jorge emphasizes the importance of celebrating small wins in business.
- Linker Finance aims to connect business banking technology with the needs of community banks.
- Strategic partnerships are playing a big role in Linker’s next phase of growth.
- Jorge believes that community banks can thrive with the right technology.
- The future of fintech is uncertain – it could greatly reduce the role of community banks or it could make them stronger.
Introduction to Linker Finance and Jorge Garcia
Rory Holland (00:10)
All right. Welcome to Mighty Finsights. My name is Rory Holland and today I am joined by Jorge Garcia, CEO and founder of Linker Finance. Good to meet you.
Jorge Garcia (00:18)
Yeah, good to see you. Good to see you again.
Rory Holland (00:21)
So we, backstory, we’re sitting down to talk. This wasn’t planned, so we’re gonna have this conversation. We’re just gonna go, but it was great to meet your wife and your co-founder. And super excited to hear a little bit more, but because this is so impromptu, why don’t you tell us a little bit about Linker Finance? Just a quick 60 seconds.
Jorge Garcia (00:42)
Yeah, yeah. Well, Jorge Garcia, CEO of Linker Finance. So I think that the easiest way to position ourselves is we are a next generation digital banking platform, but very, very focused on community banks and specialize on the commercial banking side. So what we’re trying to do is bring in the technology that normally a fintech like a Mercury and a Brex have, but to a 500 million in assets community bank. So we’re very, very purposely focused on a very specific segment of community banks that have been heavy dependent on just technology provided by the core or that face a lot of fragmentation. Like there is possibilities out there, but they don’t necessarily have the technology, staff to combine all of those. So yeah, so what we provide is an end-to-end solution. So we have a digital account opening, digital onboarding, digital banking, treasury management, and a full real-time integration to the core and other systems that help just the community bank provide a premium experience to their customers.
Rory Holland (01:46)
And I want to dig into that some more. Before we do that, where’s home for you?
Jorge Garcia (01:50)
So I’m based in Pasadena, California.
Rory Holland (01:52)
That’s not home home though, because you’re, you don’t have a Southern California accent.
Jorge Garcia (01:57)
Yeah, so my background story. So I’m actually born and raised in Honduras. And I came here as an adult, actually. So I was born and raised in Honduras. Yeah, was this computer kid, as always. So did that. In Honduras, I was a Honduran national swimmer. So I actually swam for the 90s. I ended up in the Pan-American Games. So was a national swimmer. Studied AI in Sweden. I studied computer science in Honduras and then AI in Sweden and then ended up founding different companies. We founded a company that we ended up selling to Disney and moved here to the US in January 2016. And that’s how I ended up in Pasadena actually, close to Burbank where the headquarters of Disney are.
Rory Holland (02:40)
So Honduras and then you moved here in ’16.
Jorge Garcia (02:45)
Yes.
Rory Holland (02:46)
And what is something about, I have not visited Honduras, but what is something about Honduras and maybe some people don’t know that helps shape who you are today as an adult growing up there?
Jorge’s Journey from Honduras to the U.S.
Jorge Garcia (02:54)
Yeah, I think honestly I feel very privileged that I grew up in this like, what I would describe like a lower middle class environment, but had education, but at the same time kind of have that crossing between, I mean, being a little bit tight, but at the same time having big dreams, I would say. And I think the swimming gave me a lot of that. So I think I carry that. We still own the house. My mom passed away, but still own that house. My mother-in-law lives there. So I go almost every year for Christmas. We get there, see childhood friends from there. So I think it helps me always remember and be grounded. I’m very appreciative of community and all of that. So even where we live, I actually live in Sierra Madre, which is right next to Pasadena. I like Sierra Madre because it’s like a small town vibe. I swim at the YMCA. So I always like having that feeling of like a community closeness. And so I think that carry a lot of that in my life. Yeah.
Rory Holland (03:52)
Yeah. I want to definitely get into to Linker, but how did you start Linker? In thinking about your move to the United States, 2016, it sounds like you’ve had some success. You’ve, if you sold a business to Disney, what was that business in finance? Was that a financial?
Jorge Garcia (03:57)
No, no, no. That’s the beauty of this. And this is a common question, right? So that’s a great question and a great way to start my other part of story. So yeah, so no. So what we did was a marketing technology company. So think about, it was called Kam.io with a K. So Kam.io. Think about Snapchat filters way before Snapchat. So we did a 2012. A large success was The Walking Dead. We launched an app called Dead Yourself, where it will turn you into a zombie using The Walking Dead art. Millions of users and all of that. And then we had a couple of other success with our shows and then we ended up with the acquisition. So I came here and yeah, we had some level of success. I think it was a life-changing kind of event. And then we started to work with Disney, of course. And then I started a consulting company, a software development company. And then started working with Disney, then Viacom, companies like that. And then I was honestly, was like, “Okay, I like media and entertainment, but I felt that you’re kind of like fighting to just get people’s attention.” And yeah, there’s education and entertainment and all of that, but I kind of was looking for other areas. So education, I did some in the past, but also I started to do fintech. So I’ve been doing fintech for like seven years, initially working with startups and larger companies on software development, right? So their mobile app and things like that.
The Birth of Linker Finance
But funnily enough, ended up doing banking technology. Because I founded this business, we went to the normal path that you would think. Right, it’s like, where do you bank? Well, I bank with a large financial institution. So I’m going to save the name. So we open a business bank account with that large financial institution. Let’s work with them. And then our business started to grow. So we started to get more customers and all of that. And the logical path for a service company is to potentially get a business line of credit, just so you can work with your account receivables and all that. So we went to that bank, applied for a business line of credit, and we got denied. And this was a shock to me because actually we already had a line of credit with them. We were asking for an expansion. Our business was growing. We had good logos and everything, but still got denied. And then somebody connected me to a local bank and was like, no, you should bank with a community bank. And it’s like, why? I know it’s because they are. So he started to give me a nice, that would give me the loan, right? Yes. So I’ll go there. So I’ll prepare and all of that. They ended up giving us like five times the line of credit, flex loan, credit card, amazing relationship. We ended up growing that business, made it to INC 5,000. But then I was like, okay, so the tech was like terrible. Like the apps were terrible. Like I come from launching product direct-to-consumer products for millions of users and doing fintech, right? And the first thing is like what is this thing of a community bank? Because the concept doesn’t exist in Honduras. And it actually, the concept of a community bank is very specific to the US. So I was like, okay, first of all, what’s this? How many of this are they? Is this tech problem a problem with this bank or is it a common problem, right? And the more I started to dig, I was like, oh wow. So the community banks fund 50% of small, medium business loans, 70, 80% of agriculture loans. Their role in the American economy is fundamental, right? And then I started to see the tech side of things as like, wow, so they’ve been like a lot of fragmentation. And the more that I started to look, I was like, OK, nobody’s trying to solve this problem in a more holistic way. I started to see people doing great things, great account opening solution, great payment solution. Some that are just doing digital banking, I think in a good way, actually.
But nobody was trying to see this problem holistically. And that’s when I would say, OK, I think we can do better. Let’s try to bring the experience side. Let’s try to bring the integration side. And then just bring it to, especially community banks, under 2 billion in assets. There are thousands of them. So that was when I would say, OK, I think there is a business here, I’m crazy enough to do it. So I decided to just get out of my other company. And two years ago, ended up founding the company.
Rory Holland (08:18)
Quite a process so you learned it from the ground up so to speak meaning the experience you saw and having building your own business selling that business, trying to get financing to manage and grow your business. You just saw how antiquated disconnected it was, so then you decided to create Linker to solve that problem.
Jorge Garcia (08:39)
Exactly.
Rory Holland (08:40)
And so describe like the short form version of that. I know you said it a little bit earlier, but like what’s the elevator pitch so to speak when you talk to community banks? Like how do you describe it to them in short form?
Understanding Community Banks and Their Needs
Jorge Garcia (08:50)
Yeah, so when we talk with them, normally ask them, so what bank, what are you doing, how are you focused, right? So it’s like, how are you feeling with your commercial, digital banking platform, right? And then, so normally they’re unhappy. And normally for the banks that we’re talking, it’s like, normally they’re heavy dependent on the core. But what we try to prevail is that we provide them a unified end-to-end digital banking experience. We’re modular, so we can start wherever they are. But basically, they can provide one, a much, better experience to their customers, two, because of our integration, we can also help them streamline, optimize their internal process. Because there are two problems to this, right? So there’s the customer experience, but also there is the banker experience so we can help them also be more efficient on the other side so normally if a bank wants to potentially grow deposit by launching a new detail brand, start to activating new customers or make it more efficient to sell, opening new accounts so we have solutions for that. But also just like simplifying their internal process in the process of business on doing things like treasury management and such, and then that normally leads to further current conversations.
Rory Holland (10:01)
Do you work alongside the cores or replace the core?
Jorge Garcia (10:06)
We work alongside the core. If you analyze what happened, I would say about four years ago maybe, I think nobody’s happy with the core, so we know that. But part of that is maybe we need a new core and a new detail, all unified. But that’s very hard for a community bank. Just a core transition takes years, and it’s expensive, and it’s risky, and all of that. So what we did is, against all logic, we said, “Okay, let’s be core agnostic. Let’s actually start with one of the big cores, which is Fiserv.” So we connect to the core. We actually connect to other systems, like if you have a positive pay system, like a ACH and wire system, and any other internal system. So we kind of like sit on top, and we can run in parallel of a digital banking solution that you have, or we can actually reprint, replace, whatever you use right now.
Rory Holland (10:55)
You mentioned you’ve got some traction, so you have clients on now. Are there any stories you can share as far as success stories?
Jorge Garcia (11:02)
Yeah, yeah, honestly. So I mean, we just announced Vault.Bank. So a community bank, in their strategy of growing deposits, they said, OK, they had already acquired another bank. So they said, “OK, we want to grow.” They already opened a new branch, acquired another bank. They said, “OK, there is the BaaS strategy, but BaaS has had its troubles.” So they said, “We actually would like to launch a new digital-first brand.” They’re based in Broadhead, Wisconsin. They’re called the Bank of Broadhead. Now we want to serve the whole Wisconsin. And we said, “OK, yeah, I think our technology can power that.” And they said, “OK, because of the size of the bank, we cannot do a sidecar strategy. So we cannot get another core” and put on that. It’s like, can actually, what we would recommend is let’s just create another branch on your existing core. We connect real time to that. So long story short, I think they love our vision. Actually, the CEO ended up becoming angel investor in our company.
Rory Holland (11:56)
That’s a good sign when the client invests in your business. You must be doing something right.
Working With Vault.Bank and Gaining a New Investor
Jorge Garcia (12:00)
Totally, totally. He became an angel investor. Then, yeah, so we launched. I mean, we had been live since December. We just announced going live. So yeah, so they’re growing their deposits. And actually, we’re getting traction, getting some users out of state, out of Wisconsin. So now it’s actually talking about, anyway, I love this because last conversation was like, “Should we go national?” So those are things that if you think about a community bank from a small community in Wisconsin, not even a large city, not Madison, not Milwaukee or Green Bay, thinking, okay, we can grow beyond our geography. Can we grow to Wisconsin? And now it’s like, actually, why don’t we grow and go national? And right now we’re in the process of growing deposits, now talking about our strategy on what are the different additional products that we’re gonna do, business banking as well that is a strong mandate. So yeah, I think that it’s a beautiful story still in the writing but it’s really exciting right just to see that level of innovation and after Mike the CEO became an angel we did a seed round in the summer and then the bank decided to become an investor also.
Rory Holland (13:09)
Oh man, congratulations.
Jorge Garcia (13:10)
Yeah, thanks.
Rory Holland (13:11)
By the way, that’s a testament to what you guys are doing. How would you say, I want to ask you a couple of marketing questions, but before I get there, I want to go back to, I heard you say that you were an Olympic swimmer?
Jorge Garcia (13:20)
I’d be pan-american games, I was on the Olympic track and the decided not to pursue it.
Rory Holland (13:24)
Wait, so you ran and you swam?
Jorge Garcia (13:27)
I swam, swam, sorry.
Rory Holland (13:28)
Gotcha. You were on the Olympic track. I gotcha. So you were a competitive swimmer. How has your experience as a competitive swimmer, because that’s at a high level, how has that impacted how you’ve approached business and being crazy enough to start this company?
The Impact of Competitive Swimming on Business
Jorge Garcia (13:34)
Yeah. Honestly, I think that swimming was the best decision that my mom educationally took from all the great things that she did educationally, because I was a kid that was starting to get in trouble. And she said, “OK, now you have too much time.” And she says, you decided to swim, right? And that ended up being the most impactful thing. I think the most what I mean, swimming, especially when you do it like a competitive swimming and you take it seriously, there are a couple of things, right? So one of them is you have a long-term goal. We all know that we are not gonna be a Olympic gold medalist or Olympic finalist in one year. I mean, that never happens, almost never happens, right? Michael Phelps, even Michael Phelps couldn’t, like he was fifth in his first Olympic. So you know that you have that big goal and that’s gonna potentially take you years. Sometimes four years, sometimes eight years. But what is, one, what are you good at? And then two, what is the goal for this year? What can you do this year that is gonna move the needle and get you there? And I think that’s one of the things that when starting a company, and actually not only this, but all my companies, but this very particularly was, I want to be serving thousands of community banks. That’s really my, I’ll be happy there. I won’t be happy on like yeah, we have five banks, ten banks. I’ll be happy when we say okay a hundred, five hundred, a thousand. But that’s gonna take time. That’s a reality right? So it’s like what do we need to do? The first year was building product and launching first customers. We had some like fintech POC’s and all that but my goal was really show the technology to a bank so we can close it. And we achieve that, like December, the year and all of that. So we achieve that and then last year was about, OK, continue building the tech and then launching. Are we able to, because it’s just the level of legitimacy. The question was always, well, one, are you working with a bank? So yeah, not working with a bank. But are you live? And then it’s the SOC II. Are you connected to a corporate? Are you live? Yeah. So that was that goal. And then now it’s more about, OK, now that we have it, it’s, OK, are you working with other banks? And now we are, right? So I think now it’s about showing that next level of success. We are seeing that traction, That legitimacy, that signs of product market fit. I think being a swimmer tells you, as a founder, you always saw, “Fake it until you make it.” And maybe sometimes I’m too honest. I’m very critical with myself, so I’m like, I see where we are and I see the signs of what we’re doing, but at the same time, I know we’re not there. So I always keep reminding me, because if you get attention, media attention, you get something like that, it’s easy to get lost. But I think I know the difference between an award and a medal. And I want the medals. The medals are actually things that you win by competing with others and that you reach the right goal. An award is something that, a recognition of your success, that may not relate to your success as a business, right, in this case as a person. So yeah, so right now we’re, I think we’re successful and we’re getting to that next level of success, which is pretty exciting. But still the goal is out there, but I’m very happy. I always celebrate the wins, so I’m very happy. And I think that’s the other thing that swimming taught me, that is you have to celebrate those wins. Like when I swam and won at the juniors, I was happy. Like, okay, this is good. You normally start at your city, then you go like the national. The rest is small, right? So here would be the state. Then you go to an international, then you win something, you lose some, you make friends. So you kind of like start to celebrate. I think that’s why I always have a happy attitude to things, even when things are not necessarily go exactly how I want it. But I say, okay, well, but actually, achieve all of this, so now for the next level, this is what we need to do. And I think that’s the other thing that swimming also taught me.
Rory Holland (17:48)
That’s great. Yeah. The longer term goal we, you and I, we had talked about this just downstairs when we were talking about that instant gratification that we’re all subject to, whether it’s, you know, buying something on Amazon and I know tomorrow it’s going to show up or somebody likes something, shared something that I posted, whatever. That we don’t lose sight of the long-term goals, is ultimately if you have your eyes on the long-term goals, it’s going to help keep you on track. So you got to constantly ask your question. What is the goal? Like, am I headed towards the goal? Am I off track? And am I not? But then you got to celebrate the wins, like you said, because you’re not going to win every single race. I think that’s great that how you, how you’re thinking about your competitive nature in sports, it does apply so well for those of us that look at it that way into business. Because it is about winning, but it’s also about the journey, and it’s also about making a positive impact along the way. And are you taking one step after another? We don’t get fit in one day if you want to go to the gym. January 1st, you don’t wake up. You don’t go to the gym once and you’re fit, right? Like it just takes time. So what’s my goal? So I appreciate that.
Brand Positioning in a Competitive Market
So I wanted to talk a little bit about the brand. When I hear you talk about what you do, and I’m curious how you feel about how your brand is positioned in the market. And I ask this question in the context of community banks are inundated with technology opportunities. They, I’m sure they, someone was telling me, and maybe it was Alex McCloud that was just on with us earlier at Parlay, some, they get like 14 emails a day or 15 emails a day from tech vendors. A lot. So how do you feel about your current brand positioning and how your messaged in the market.
Jorge Garcia (19:22)
Yeah, I mean, I think this is an area that we’re learning, right? Honestly, I wish I would tell you we’re the most recognized brand and every community bank knows about us. The way that we’re doing it is I’m a heavy believer that you have to talk with your customers or potential customers and you have to be where they are, right? And reality is that because community banks are about relationships, they want to meet you in person.
Building Relationships in Business
So we’ve been doing, I think, a good job of finding the events where they are and where they… and we introduce ourselves and that… I mean, we’re still doing like data marketing and things like that and that’s part of our strategy. But we have combined it with a more handshake type of relationship. And I know this may feel like it wouldn’t scale. But I think at the stage that we’re at, it’s the best way for us to really understand what works and what doesn’t from what we’re doing. Understand the pains, get that word of mouth. We are getting some word of mouth. Like, “Hey, I actually spoke with this company, but maybe you should talk with this other person or this person internally in the bank.” I think that has been very important. We’re learning our communication strategy, what’s our value proposition, and what’s the most impactful. I’m conscious that it’s something that right now we’re building and trying to understand. At least I have it in my mind, and now we’re starting to learn on how to articulate it in the right way.
Rory Holland (20:50)
Yeah, it’s, we do that for a living. Meaning creating those brands, creating the brand narrative, the story. And you guys have such a neat story. One thing we didn’t talk about that just want to touch on really quickly is for those of us that… is that your wife, calling?
Jorge Garcia (21:04)
Sorry. I don’t know what’s being alarmed.
Rory Holland (21:06)
I was just going to talk about your wife in a good way. It’s very unique that you and your wife started this together, that’s pretty cool.
Spouses and Co-founders: A Match Made in Honduras
Jorge Garcia (21:15)
Yeah, I mean, part of my story is that. So I’ve been married for over 20 years. Our daughter’s 21, turning 22, so we’ve been married for 23. We actually met when we were, what was it, 18? So we were like, we started dating, and then four years later, about, we got married. So I’ve been with her more than half of my life, right? We’ve been together. So yeah, it’s an interesting thing. So in our case, the beauty of that we complement each other in many ways. Talking about the professional side especially, she’s a designer and I’m an engineer from background, right? So that helps us communicate in very special ways. Like she brings a lot of the things on the creative side and how to approach some things. She’s very… She calls it her dyslexic intelligence, and I’m more structured. And that helps me a lot because she brings many times some potentially non-structured ideas that I can actually synthesize. So working as co-founder is amazing. But the beautiful thing is that in our previous company, we actually worked together as well. So that’s where we learned to work together. There’s always challenges. I don’t think we have them anymore, actually. But at the time, I think it was the with Claudia was a lot about like, know when you’re a co-founder but also married, there is this special thing that you know more of the person than you actually know from an employee, for example. So somebody from your team tells you, I couldn’t do this because blah, X, Y, Z. You’re like, OK, yeah, but you have to do it, right? But if it’s your spouse, it’s like, no, actually, you were drinking wine yesterday at 9 p.m, right? With me. And you get into those troubles. It’s like I know more of this person. Sometimes at that time, like especially when it started to work together, many times you are insecure on like, okay. I have to show no bias and then so actually many times you overcompensate and you ended up end up showing more bias than in the negative way, right so it can be harder with a person or not. I’ve seen this with many people that are either married or working with a son or daughter. But when we figured that out, then it became easy. Because it’s like, no, this is just a professional relationship and we have fun. And the beauty of being a co-founder is that it’s very creative. So we were having dinner talking about the business. In the morning, we’re talking about the business. We where we have set up our home office. We have an office, but we’re set up our home office. We have our office and we have kind of like our gym area and then she’s doing that and I’m working and we start talking about that and like creative ideas in that many times. It kind of is as a superpower I would say, because who has 24-hour access to the co-founder and hang out hang out pretty well right, so I feel that it’s a superpower that we have right now.
Rory Holland (24:11)
Oh, absolutely. Marriage is hard. I mean you’ve been married a long time. I’m 25 years this year. So I don’t think my wife wants to work with me. I’m pretty sure I know that, the answer is no. But that’s really cool because I met you and your wife. I could tell you guys had a good energy and a good heart for what you’re doing. And so you mentioned you have a mandate. I think you use the word mandate for commercial. Where does that come from?
Jorge Garcia (24:32)
I think it’s my, like I’ve been a business owner. So this is funny because I was looking at pictures and we actually were co-founders in another small business when we were just dating. So the story is that when we were 20, we bought this like small, it’s like at the time it was called Cyber Cafe, so you could do like internet and cafe and all of that. So it was funny because I was looking at those pictures and I just bring it up because I’ve been a, like serial entrepreneur, but especially serial business owner. And there are a couple of things that are important for businesses, right? One of them is efficiency. Like you always want to, you want you’re constrained, right? So you have to operate your bare bones. So anything that helps you as a business owner to do that is super helpful. And I’ve lived it many times. But the other thing is access to capital. And if you look at like any data about businesses especially on what is the most, the biggest constraint, one of the top one, if not the top one, is going to be access to capital.
The Importance of Community Banks
And so my mandate, the reason why I’m so passionate about community banks is because they are the ones that actually fund the majority of small businesses in agriculture, which at the end is a small business anyway. And I think that’s fundamental for the US economy. I either here, the concept of a community bank doesn’t exist elsewhere. And I think that’s what makes the American economy so special. I don’t know what created what. I think it comes, I’ve been reading about it. I think it comes from the fact that we haven’t had a central bank that just created that capital was a little bit more dynamic and had that created those local smaller banks as a way to fund the business. And that just kind of like created that dynamism that the American economy has. And I wouldn’t like to lose it because like, just think if you remove the banks, like if, if you remove the community banks, what’s going to happen 10 years from now? We’re going to have a small set of big banks, and we’re going to have algorithmic-based lending. And what’s going to happen is that that’s just going to make a lot of people, especially businesses, not have access to capital. Or through algorithmic-based lending, expensive capital. And we’ve seen it, right? So Kabbage, for example, great tool, 27 % APR. But with a community bank, you will get 6%, 7%, 10%. Great, great access to capital, right? So I think the level of specificity that a powerful community bank can give if we combine technology with the powerful lending that a community bank has is what’s going to be key for the American economy, I would think, in the next years. And that’s why I’m like I don’t know, I’m very stubborn maybe, but I was like, okay, no, I’m just going to focus with community banking, especially I’m never going to forget about commercial banking, we’re going to figure it out. And I think we’re doing good job at that.
How Constraint Satisfaction Helps Build Companies
Rory Holland (27:34)
It sounds like it with that story out of Wisconsin. Yeah, that’s really, that’s really great. Yeah. You mentioned, and I’m, don’t remember the second word, the theory of something or the third word. You, when you chose how you were going to prove this out. We were talking to Sloan down at FusionIQ. What, was that?
Jorge Garcia (27:50)
It’s called constraint satisfaction. I’m computer scientist, also study AI, so there is an algorithmic method that is called constraint satisfaction problems. So when I was thinking about these companies, many people try, and I mean, you’re normally told, try the path of least resistance, which is also true. But I was seeing a blue ocean, I would say. So we went, they was telling us, if you’re going to start with a core, start with an API friendly core like Jack Henry, for example. Stay away from Fiserv. That’s a great example. Or start with, we heard a lot, start with credit unions. Don’t start with community banks, because credit unions, because they’re not-for-profit. So it gave us all these reasons valid, I would say. We actually went the opposite. We say, we’re going to work with the hard. And actually, told us, if you sell to community banks, sell to the banks that are $5 billion and beyond, because they have the budget and they have the technical expertise. So we said, OK, no, we’re going to do nothing of that. We’re going to go with community banks under $2 billion assets. So actually, the bank for example, is at $350 million in assets. We’re going to start with Fiserv Premier as a core. And we’re going to put all of our messaging, very specific to community banks. So we’re going to start very specific to community banks. The reason was because if you check the data, if you really want to move the needle in the space, we have to solve the hard problem, which is the majority of community banks are under $2 billion in assets, thousands, right? And then the largest core in the market is Fiserv and then FIS. But it’s just like Fiserv by far is the largest. And the reality is that community banks under 2 billion in assets, because they don’t have the technical expertise, are being left behind by a lot of the technology providers. So as I said, we’re going to do the hardest thing, because if we figure this out, actually, then it’s going to be an easier path to do the rest. We can access other cores that are more API friendly. We can then expand to credit unions. We’re going to be so efficient that we can expand to larger community banks and regionals. So that has been our strategy, actually, and I think it’s paying off. I felt crazy, especially last year. -i felt like, I don’t know if I’m right. But yeah, so that was part of our go-to-market strategy.
Innovations on the Horizon for Linker
Rory Holland (30:14)
Yeah, you bucked the system and Americanism right there. I mean, you’re a maverick, you went a different way than what everybody said. And it sounds like it’s, it’s paying dividends. It’s moving you in a good direction. So that’s a good, good transition. And my next question, which is what’s on the horizon for, Linker, like what’s any exciting projects, announcements, goals you can tease out for us.
Jorge Garcia (30:39)
Oh yeah. So I mean, part of what we did last year that we didn’t, we haven’t announced, I mean, we’ve been very strategical. So we did sign multiple partners that help us solve… When I started the vision of Linker, my initial vision was Zapier plus Webflow for financial services. Zapier meaning connect whatever you want and then do whatever you want on the interface. So we still cater to configurability, and if you have certain integration, we’ll bring it. But I think we’ve determined on, community banks have very specific needs in different areas, in treasury, in payments. So we’ve been signing different partners that will help us simplify the vendor management and the technology needs and the business needs of banks. So it’s going to come a series of announcements in that side. Our ability to connect to the core. So that’s some important announcement there. We’ve secured a really strong strategic investor with multiple banks. So we’re working actually with multiple banks right now in a very close and very like a very interesting collaboration environment. So yeah, very interesting things are coming this year about that. And we’re planning to do something. I know I’m being very abstract on purpose, but I think you’re going to start seeing some of those things coming up. I’m really excited, because I think throughout the year, we were able to talk with banks, and do some of our discovery of value proposition and all of that, but also understand better who potentially you could work with and how to work with and what is needed.
Rory Holland (32:18)
Early times, right? So you’ve got the blue ocean, like you said, so much opportunity ahead for you and the community banking market needs all the help it can get to have technology that improves user experience. Like I loved talking to you downstairs about being able to optimize user experience because you can build a great brand, have a great reputation, have a wonderful story, invite people into your website and to your social media channels to engage with you, when they go to sign up for your product and it’s clunky. The user experience is poor. One, you lose, you don’t convert as much. So higher cost of acquisition. Two, those that you do convert when they’re in the product and they’re trying to transact with you with deposits or get a loan, or apply for a credit card, or whatever it may be, again, clunky, disconnected. What I heard you say is like that end-to-end solution is really powerful. And the that you can build it over the top of an adjacent to and along side Fiserv, big, that’s huge.
Holistic User Experience in Community Banking
Jorge Garcia (33:09)
Yeah, that was our whole… think being an outsider helped me kind of like see that if we don’t think about this holistically, we’re never going to win. Like that’s another example of like you should start, I don’t know, with account opening or you should. I’ve seen that there are a lot of companies, great companies, great founders, great technology. But I think that if you think too much on the venture mentality, and we’re a venture-backed company, the over-optimization is like, this feature worked, now let’s try to sell it, sell it, sell it. That’s good, because you have to do that, but you shouldn’t forget about the rest, right? So we try to say, okay, no, let’s just redraw this. we think about the, again, if we think about the community bank in 10 years, or if a denovo starts tomorrow. What is the tech stack that denovo should use? And that’s the way that I think about this. And where are those leads coming from? Who is that bank working with and what data do we need to move along? So this team, this marketing team, for example, we were having that conversation, is efficient in the spend for the bank and is effective in the spend for the bank. And we’re seeing that in operations and we’re seeing that like we’re seeing in multiple areas of the bank. We were talking about marketing right, but it only works if you think about this holistically and I think even when we raising capital many people were afraid because it’s like why do you want to do so big? And I was like yes, but actually if we rethink it, it is still big but it’s it’s not as big as it seems because right now you have the comparison of multiple systems developed 20 years ago, 30 years ago. So you’re thinking, you have to rebuild all of that. And the reality is, I just remember the movie Armageddon, when they bring them in. And the first thing that they start to do is they start to rip the parts from the rocket or whatever. I don’t remember whatever it was, right, the drill, I think. And it’s like, no, you don’t need this, you don’t need that, you don’t need that. It’s like the reality is you don’t need a lot of that. We don’t need a lot of the tech that is right now and it only exists because it works. And that’s good, but it won’t work in 10 years. So the industry can survive and be efficient and be competitive and can live not only 10 years, but 30 years.
Rory Holland (35:40)
Yeah, beyond that. Yeah, you said so many things in there. I just want to point out one that the way I received it is yes, it’s easy when you’re venture-backed, depending on the direction you take and how you work with your investors. Yes, to focus on one thing. And but then you’re taking your eye off the goal, right? Because you said you have a mandate to do something. No, no, yes, those we want to take advantage of opportunities, but let’s focus on the goal. And I just think that’s wonderful. I do have just a couple more questions. My first one is kind of zooming out a little bit. And you touched on this a little bit, but I’m kind of curious how you respond to this. Where do you see this in the next three to five years? The fintech industry? Particularly like the community banking market, like where you’re spending your time. Because it’s getting smaller.
Reframing the Data on Community Banking and Technology
Jorge Garcia (36:22)
It’s interesting, right? But it is and it is not. So there are a couple of things that have been in factor. I just, the first thing that I want to say is I was talking with a bank CEO two days ago. He’s going to ICBA Live. ICBA is the largest association of community banks nationally, by far, I think they have like 3,000, 3,500 members. We’re members, proud members. And he said that a lot of fintechs are going this year to ICBA Live. He was like, “Jorge, like this year there’s a lot of fintech. I get hit a lot of emails and all of that.” And I am happy because like if you heard the narrative three years ago, the narrative was community banks are gonna die and the next thing is neo banks and all of that. And I was like, no, I was actually afraid of that. And I was like, no, actually, there is a place for neo banks. I think the neo banks happen because of the regulation made it so hard to open a new bank. So you see the data, what happened after 2007, 2008, is that the denovo banks, which is the the definition of a new regulated bank went down from 100 to like seven or something like that and even less per year. So then the market has to do something and what happened was neo banks were created. And I love the space of neo banks. So I think that what we’re gonna see right now is this flourishing of access to technology for community banks. Community banks have the money, the performance, the balance sheet, as they say. They know how to operate in a risky, regulated environment. They give the access to capital, they know how to make money with capital. So I think the space is ripe for innovation. And I think companies are starting to get a hold on that. Everybody wanted to sell tech to, I don’t know, Mercury, Brex, Chime, and everybody now wants to sell tech to community banks, right? So that’s one of the things. It is getting smaller, it is not, but if you see the data, you will notice that the mergers and acquisitions stabilized. So I was at IOBA, which is mainly about mergers and acquisition. And even like the M&A firms are nervous, but it’s like, I think it’s gonna get again excited and everything. So I actually talked with a banker and what he told me is that one of these M&A firms told him, “I have 15 sellers and 15 buyers right now. And they haven’t been further apart than ever.” And it’s interesting because that’s what’s happening. The other final data point that I’ve seen is that if you notice the data, the banks that are being acquired are under 100 million in assets. But actually if you notice the same data, and this is Cornerstone data, you will notice that banks beyond that, that segment is actually growing. And of course it’s because of the merger, but it’s very interesting because I started to see the data, it’s ike, yeah, the banks are like, we got less and less. Well, actually the only segment that is getting reduced is the segment of under a hundred million assets, and the main reason is efficiency. Those banks are not efficient. I think we’re focusing on a, just yet in a different segment, a little bit larger. But I think there is a thing to say on like, well, what if those banks operated differently? Can technology do it differently? And that’s why I was thinking like, if a denovo comes tomorrow, it shouldn’t really use the same technology stack. And they could operate with much more efficiency. We’re still not tackling that problem, I have to admit, but I think there is much to say there as well. Yeah.
Rory Holland (40:02)
That’s encouraging.
Jorge Garcia (40:03)
Yeah.
Rory Holland (40:04)
Thanks for looking at the data different and sharing that. That’s good. That’s true. I mean, I’d like to see nothing more than community banks thrive and flourish. I think it’s important for our economy for all the reasons why you shared.
Jorge Garcia (40:14)
Yeah, I think it’s definitely fundamental. Yeah, so I mean, it’s still challenging and still like a trend, slow down trend, but it is a trend. I think I’m bullish. I’m a contrarian. And that actually talk about the investor that we had. They had to have a little bit of a contrarian view of the world. Yeah.
The Essence of Linker: Connection and Innovation
Rory Holland (40:32)
Yeah. Good stuff. One last question. If there was one thing you could help the world understand about Linker, what would it be?
Jorge Garcia (40:41)
So I think it has to go with the… Like the essence of Linker, and of course the word has to do with connections, right? And I think that applies to everything that we do. We, first to technology, right? So we take what’s established, we take what the fintech is doing, we take the technology that is used in like other industries plus our vision of experience and how it should work, and we combine it in a cohesive way. The Linker is the part of the software, the compiler of the software, that actually pulls different modules into one single package. So that’s where it comes, so we do that. But I think one of the things that I also love about Linker is that we kind of bring a more holistic view as well of, yeah, it’s banking, but it’s also the business perspective. And it’s also the access to capital aspect to it. So I think, I mean, if we see the north of Linker in the financial services, we always want to be a connector of technology, but also of people, of industries, of possibilities, right? So where is the lending happening? And how can we bring that connection to the banks, so we’re exploring those things as well? So yeah, so it’s all about connection. That’s why it may be an obscure term, like in the terms of technology, connection is a compiler, but people that we tell Linker Finance, they always say, “Okay, what a beautiful name.” So it’s all about connections. I would say that’s the right word, yeah.
Rory Holland (42:14)
Well, I’m grateful we got connected again. Good to see you again this year. Boy, you guys have grown. You guys are making great progress. We’re in your corner. So I’m grateful for the conversation and good to reconnect. Awesome.
Jorge Garcia (42:21)
Yeah, me too. Thank you. This has been a great conversation for sure.
Rory Holland (42:29)
Thanks, Jorge.
***End transcript***
