How Quontic Bank adapts to crypto, remote work and wearable tech

Quontic, a bank headquartered in New York City, describes itself as an "adaptive digital bank". Since CEO Steven Schnall bought the former Golden First Bank in 2009, the The entrepreneur and former mortgage banker designed the bank to reflect his vision.

"Part of the thesis when I bought the bank was that the retail bank branches would eventually die out and people, especially consumers, would want to do online banking," he said.

Because of this belief, Schnall did not build any new branches after the purchase other than the stationary location he established in Queens Astoria when he relocated the bank's headquarters from Great Neck, New York.

The bank, a certified community development financial institution (CDFI), began with an emphasis on unskilled mortgage loans, Schnall said.

Steven Schnall, CEO of Quontic Bank

Permission granted by Quontic Bank

"During the credit crunch, most banks and lenders had severely curtailed their home mortgage lending; A good reason, because that was the credit that brought the world economy to its knees, "he said." But there have been many people who I thought were earning credit that were left out. "

The bank managed to create a niche where loans were made to the various underserved communities of Astoria.

"We have found that if we offer some relief with the income documentation that we can do as a CDFI, we can make really good loans to really good borrowers that are overlooked by the big banks and other lenders," he said.

However, in hindsight, Schnall said he was likely early in his mind about branchless banking, and the lack of physical locations made it difficult for the bank to develop a core retail deposit business.

"Over the years we have started to rely quite heavily on brokered deposits and listing services [Federal Home Loan Bank] Loans to finance our debt, and that put some strain on our regulators, "he said." We had this plan to become a digital bank and the fact that the [Office of the Comptroller of the Currency] We didn't like the way we financed our balance sheet and we had to accelerate those plans to really become a digital first bank and now really a digital only bank. "

It wasn't an easy task, said Schnall.

"People had online banking and mobile banking, but these were really a by-product of the branch and we had to figure out how to use technology that became the main means for consumers to do non-branch transactions," said Schnall. "It's been an interesting journey and we've learned a lot along the way. We figured out what to do with our technology stack and how to change culture to be more of a digitally focused institution than a face-to-face institution So that was really how we became a digital bank. "

The bank has continued to adapt to changing consumer preferences and positioned itself as a competitor in the growing digital banking market by introducing unique products, Schnall said.

One such product that the bank launched last fall is a checking account, which is used to reward consumers in Bitcoin. The product, which is in beta, appears to be the first bitcoin rewards program offered by a US bank.

For every purchase made through their debit card, Quontic pays the consumer 1.5% back in Bitcoin.

"It was a tough job for us," said Schnall, "but we believe that Bitcoin has a place in people's portfolios. We conducted many surveys and found that a large percentage of the population was interested." Bitcoin but didn't necessarily want to take the risk of buying it for yourself or found it too volatile or didn't know how to get it. "

The bank also has a high interest checking account for direct deposit customers.

Schnall said the bank actually requires its consumers to do a minimum number of debit card transactions in order for them to collect merchant exchange fees, which are then used to pay the interest on the account.

"All of the accounts we have online either pay market prices or require some interaction with the customer, mostly through the use of a debit card that allows us to earn an exchange that we can repay to them in the form of things like Bitcoin rewards or cash rewards or high interest rates, "he said.

Wearable technology

Quontic's goal of becoming a trendsetter in digital banking has led the company to explore innovative ways for customers to use their debit cards. The next product, said Schnall, will be one that they can wear.

"In about 90 days we will be launching a portable debit card ring," said Schnall. "We think it's an interesting product in the era of COVID where people are less and less likely to want to touch things with their hands. You can wear a ring, wave it over the card reader, and you're done."

After meeting with an international vendor that makes the product, the bank negotiated a structure last year so that it could be the first to bring the product to market in the United States, Schnall said.

"The idea is that we should continue to innovate and stay ahead of the consumer to just be this adaptive digital bank that we are," he said.

Home work

Like many companies last year, Quontic has adapted to remote working amid the pandemic. The company went 100% a virtual workforce in the early days of the outbreak, which coincided with significant growth for the bank, Schnall said.

"Everyone was working from home, but we also had to start hiring pretty quickly," he said.

In the midst of the new virtual environment, the bank decided to place its recruiting network at the national level to attract a wider talent pool, Schnall said. The bank has hired around 150 people in the past 12 months and filled several key management positions with talent from across the country.

"Our CFO is in Dallas, our chief marketing officer is in DC, our chief information security officer is in Vegas, our chief people officer is in Indiana, our head of digital is in Louisville - these are significant leadership roles for people who remain never existed. " I was even at our company headquarters, "said Schnall." This toothpaste will probably not go back into the tube for us because we are now a permanent virtual company.

Quontic recently signed a new lease for its corporate headquarters located in Rockefeller Center in Manhattan. However, Schnall said he could envision a future in which the bank would no longer need the same amount of corporate space.

"Most of the people don't want to come back," he said. "As long as we can monitor and measure that productivity, there really is no need to change. So our corporate office is going away? I don't think you can't have a head office, but let's reduce it to 5,000 Square feet when this lease ends? I can see that for sure. "

continue reading https://dailytechnonewsllc.com/how-quontic-bank-adapts-to-crypto-remote-work-and-wearable-tech/?feed_id=4686&_unique_id=61c3c14b55073