Insights from the Acquire or Be Acquired Conference // Fintech Hustle 3x02

Well, hello out there. This is Sam Kilmer, managing director of Cornerstone Advisors, and with me I have Al Dominick, partner at Cornerstone Advisors.

We’re here to bring you another episode of Fintech Hustle from the halls, the roads, off-campus chair parties and whatnot around the Acquire or Be Acquired 2025 conference here in sunny, almost warm Phoenix, Arizona, at an undisclosed location coming in from the Arizona desert.

We thought we’d talk a little shop.

As Sam mentioned, Acquire or Be Acquired has had an incredible influence on so many people over the years.

We saw incredible optimism really across the few days that we were together with bank execs, board members, investors, tech folks that are both established and emerging.

So it’s a really cool thing to be able to get away from the hustle and bustle, toss a little Cornerstone swag behind us and say, what did we hear and what do we think is really important, not just interesting?

Yeah.

As you may recall, last year we had this idea of having a carpool edition so that we could be outside the grounds of AOBA.

We were able to take, let’s see, Kelly Brown from Patriot Financial, Harley from MANTL, and Erin Simpson, who was actually just on stage.

I saw her back at the show.

We found out then that if you want to have a carpool podcast, there are some logistical implications.

Things like sound, audio.

You might hurt people in the process.

Danger, Will Robinson.

So we decided that we would make sure that we were, at that time we pulled over to the side of the road.

Now we’ve pulled over to the side of the road at an undisclosed location from regional Cornerstone headquarters in the area and thought we would just throw down some thoughts.

We have a few guests that have joined us today, and we’re really honored to have them.

Yeah.

We have some awesome guests that are going to be sharing their take because as much as Sam and I get excited about all the different intersections of ideas and opportunities, it’s really the folks who are doing the hard work day to day to solve very distinct and discreet problems in the banking space that I think get you excited.

It certainly gets me excited.

I know our first one’s right over here.

We’ve got Margaret Hartigan, who’s the founder and CEO of Marstone, which is a wealthtech company.

Welcome.

Join us.

You bet.

Our next guest is Nikhil Lakhanpal, who is the co-founder of digital banking provider Narmi.

Get in here, Nikhil.

You just literally, it’s like a little photo shoot going on.

Get in here right here.

All right.

Now we’ve got the man of the hour with all investors and everybody talking here at the conference.

We’ve got Todd Schell, a managing director at Warburg Pincus.

Get in here, Todd, and see how, if you can actually see where we’re at.

We’re going to have to squish in here and be very, very cozy.

Is that Sam Kilmer wearing a hat?

Yeah.

Well, it happens.

When you’re follically challenged, you do what you’ve got to do.

For starters, thanks for joining us.

Appreciate it.

Al, you’ve got the roaming mic.

I’ve got the mic.

Maybe we just hop right in.

Maybe we’ll go down the line and ask what stands out to you from your Acquire or Be Acquired experience this year.

Margaret?

Yeah.

Margaret Hartigan of Marstone, and thanks again for having me.

I think this is my fifth AOBA, and I have to say that it is electric.

I think companies are really optimistic.

I think people are focusing on growth, scalability, and actually tackling a lot of the projects that had been put on the back burner for a little bit.

So that’s exciting.

I think since I first started, the opportunities for technology companies to partner and collaborate are definitely much better.

So it’s a pretty exciting time.

Thanks, Cornerstone team, for having me.

Really appreciate it.

Just think about this time 12 months ago.

Rates were still at highs.

The cuts hadn’t happened yet.

You were coming off a pretty rough 2023.

Now it’s almost the opposite, to Margaret’s point.

Definitely feeling the energy, feeling the vibe.

I think people are ready to do stuff around digital, take that seriously, and also not just do it for the sake of doing it, but do it to drive deposits, drive loans, drive efficiency.

So really good dialogue, a lot of attention.

Then the weather’s not so bad either.

Hey, everyone.

My first AOBA.

I guess I’m very surprised by how many people are here.

This is way bigger than I thought.

Pleasantly surprised.

Got to see a lot of old friends and make some new ones.

I would echo what my fellow compatriots have said.

The enthusiasm is pretty incredible, especially relative to where we’ve been.

A lot of money waiting on the sidelines to do interesting things, and it seems like a lot of counterparties who want to do some things too.

Yeah.

I’ll just go ahead and give this back to Al.

I think it’s kind of interesting seeing a lot of sessions where people are really getting deep on data.

I think all the fraud, the sort of counterpoint to Nikhil’s point about where we’re at on deposits and all the aggressive things that we’ve had to do with digital account opening, and not necessarily related to digital account opening, there’s just been a rise in fraud.

I think that rise in fraud, and also credit and analysis use cases, not to mention all the hot buzz around AI, has everybody talking, at least the people that I’m around, talking about data.

But what about you?

Talk buzz around AI.

I wake up this morning to DeepSeek in the news, crushing Nvidia’s stock price.

I think it wiped out about $589 billion worth of value.

So it was down 17%, drags the whole Nasdaq down a little bit more than 3%.

It’s just a good reminder that we get into events like this and we become kind of in a bubble.

We’re talking about things that we know and live every single day.

But there’s a world outside where we are that has those forces that impact the way businesses perform and operate.

It strikes me that for bank executives thinking about technology, it’s not just who’s doing cool stuff now, who can do things to move the needle, whether it’s top line, whether it’s efficiency.

It’s to be prepared for that next wave of change that’s going to impact their customers that they have to be able to bank.

They have to have clarity.

They have to understand some of the credit concerns that still, I think, Tom Michaud of KBW described as a torpedo in the water.

So you don’t want to find it, but it’s out there.

It’s just a fascinating time to be in banking because I think Todd said it best.

This sense of optimism is real.

People are feeling much, much different about the prospects of this industry than they were at this time last year.

But at the same time, there’s always the flip side of the coin where there are risks and challenges.

That’s where I think having established companies that are doing really great work, like these two are, is so important for us to talk about.

Well, and shout-out real quick to Michelle King and the team at Bank Director because one of the things, other than just the well-oiled mechanics of operating the conference itself, one of the things I love about it, Nikhil, I was just sitting in your session, is that they’re pairing up industry providers, fintech providers, with one or two bankers.

I just sat in on Erin Simpson’s session that she was doing too.

I love hearing the back-and-forth perspective.

So it’s not just banker sessions over here on the right, vendor sessions on the left.

It’s a real mashup.

Yep.

To me, that’s really cool.

That’s one of the things I really like about this.

Super.

Maybe we can ask Nikhil.

I know you’ve been speaking here and doing different things.

What’s your take on what Sam just said?

No, I echo it.

I kind of opened up the session saying, I’m not here as a vendor.

I’m not here as someone here to tell you something.

I just think Narmi, Berkshire Bank and Community Savings have done really, really great work.

Their results speak for themselves.

We had a printout of Berkshire Bank stats on every chair.

They increased debit card use by 25%.

They fund new consumer accounts with an average balance of $2,500.

Sixty days later, that same consumer has a $14,000 deposit balance.

These are real stats.

You can’t take quantitative stats away from anyone.

I think everyone, and feel free to correct me if you think I’m wrong, I think everyone in that room was on the same team, on the same page.

I think when you talk about lower cost of funding, long-term customer value, what bank doesn’t want those things?

Right.

Hey, one thing that we didn’t really get into, any kind of detailed introductions.

We jumped right in.

But I would just love to hear about what a day in each one of your lives looks like.

Margaret, if you want to start us off.

Marstone’s a digital wealth, goal-based planning and wellness tool.

My background is originally in wealth management for more than 12 years at Merrill Lynch.

What we saw a long time ago was this great wealth transfer, which is now in motion, was going to have a huge impact not only on wealth management firms, but on banks.

Because when I was at Merrill Lynch, even before Bank of America took us over, we were so successful at consolidating deposits when an entrepreneur like Nikhil or someone had a liquidity event, or when you had the natural estate planning.

I really do believe that community banks are the ultimate relationship owners.

When I was at Merrill Lynch, I owned the relationship.

Merrill Lynch was my backbone.

But when financial advisers leave, we read about this all the time, the assets move with them.

If institutions have the ability to deepen relationships with the owners of the small-business clients and the big-business clients that they already manage, and can work with their employees, I mean, it’s a home run.

It’s much easier to work with the clients that you already have, and you improve the relationships and the services you have.

That’s what we do.

We make it a really easy turnkey solution.

Across the board, I think PPP gave community banks a lot of confidence that they can do really hard things, really complex technology platforms and installations, in a very short timeline.

I think the communities remember that, and now I think they’re willing to tackle things like online account opening and payments and what have you.

They’re cultivating that muscle and they see the returns, like you said, cost savings, efficiency, scalability and compliance.

I think the technology companies offer a lot of good technology benefits or compliance benefits as well.

What’s your day look like, Nikhil?

Yeah.

Average day, I’ll do one to two one-on-ones with one of my leadership team members.

One thing, Narmi is a nine-year-old company, and what happens when you kind of hit that five, six, seven-year mark, you start getting tenure in your leadership team, which compounds really quickly.

Really special to see.

So I’m biased, but I think I have one of the best leadership teams in the industry.

I spend at least an hour with one or two of them a day.

Then typically it’s a combination of prospect calls.

I would say customer calls, but candidly, I like going on-site to customers more than just having calls with them.

So typically I could do maybe one to two prospect calls a day.

I travel a lot, like you guys.

I’m on the road.

I live in New York City, so it’s always like, am I going to Newark, LaGuardia, JFK?

You’ve got to figure out how you’re getting there.

That’s a half-hour deal.

I’m pretty intimately involved in the product.

I’m not in the, what specs are getting written, but Narmi released, or it’s almost, we’ve been doing this for nine years, but it’s almost like a rebranding of our vision called Narmi One.

I said in my last session, I just don’t believe a bank buying seven point solutions to create one digital experience is the right thing for a community bank.

I disagree with that way of doing it.

I think banks do too because historically they did that.

They bought it all from the core banking systems.

The problem is the core banking systems don’t do digital well anymore, respectfully to them, or at least I think there are providers that do it better.

So what we’re really pitching is account opening, fraud, payments, mobile, online banking, admin, API.

That’s really one platform for a community bank.

That’s not eight platforms that you have to spend time integrating.

Even if you integrate them, you’re never going to get the integration you want.

So yeah.

I don’t have a dog or kids, so I kind of just work until I...

Yeah, exactly.

But yeah, I’ll pass it to my colleague.

As the investor, I guess I’m supposed to say I wake up at 10:30.

I think my job these days is listening to people’s complaints about all kinds of things.

Whether it’s people in the industry talking about their problems and trying to find solutions for those problems, whether it’s management teams in my portfolio going through different hard things.

How can we help?

Bounce some ideas off of you.

As these guys know, it’s lonely at the top sometimes.

You can’t talk to really anybody else.

Your investors can serve as a good sounding board to just bounce things off of, talk through various solutions.

So I think I’m a therapist without the degree these days.

Well, I love the problem.

I love the problem and solution.

I think that as not just investors have been more laser-focused on, give me a great pitch, but even bankers want it too.

They don’t want the kind of normal, let’s start talking about the tech stack before we even have established what it is we’re trying to solve for.

I’m just really curious.

When you all are out in the halls here, or in your own personal lives or professional lives, is there anything that you still see in the industry right now that you kind of feel is a problem that needs solved?

What are some problems out there that you all see that you think still need to be solved for?

Maybe there’s a next guest or an entrepreneur out there that should be tackling, or maybe already is tackling for all I know.

I’ll take a stab at that.

I’m going to try to put you on the spot.

Well, yeah.

I didn’t really go through my day, so I apologize about that, but it’s not different than anyone else’s.

I wonder sometimes if there’s an opportunity for the advisory and consultancy firms to actually kind of change the tack that they’re talking to institutions about.

Because you’re seeing a marriage of the brick-and-mortar with the digital.

I don’t think everything’s all digital.

I don’t think everything’s all brick-and-mortar.

But the way the business lines of the organizations are set up, they still are based on product and point of service to the end client.

I think if you can marry more of a user-centric, design-centric approach, if you approach the organization from that way, I think that people need to start reorganizing institutions and their strategies that way too.

Let me add on to that.

I was listening to Terry Earley, who’s the CFO at Veritex down in Texas.

It’s a great bank that’s super entrepreneurial.

Texas is, I think, like the eighth-largest economy in the world if you were to just let Texas go do its own thing.

He was talking about forecasting as a CFO.

You have to run budgets.

You have to do all these things.

But he was talking about PrecisionLender, which was acquired by Q2, and he’s been working with PrecisionLender for years.

He said he might forecast anywhere from 20 to 24 times a year.

It’s like a constant effort to stay relevant to the audience that they’re trying to serve, figure out what they’re not doing, and then for their core customers, solve that problem before it even becomes an issue.

It’s so important.

I think one of the pain points is, you start to make plans and strategic planning sessions, people want to go three, five, 10 years out.

Why don’t you go 18 months?

Why don’t you take more of that prescriptive, data-driven approach to how you run your business?

That’s a cultural thing more than it is a business thing because there are all the different tools and technologies that you can use.

But you have to have the appetite to actually get up, have your Power BI report on your phone, be able to go through all this, have your team say, “Yeah, I understand why we’re pivoting a little bit faster than maybe we thought we were.”

Right.

I also like that, Margaret.

When I asked for a problem in the industry, she immediately led off with consultants.

I was like, hey, hey, where are we going with this?

And this is our last Fintech Hustle courtesy of Marstone.

Like, “Hey buddy, let me tell you what a real problem is.”

Yeah.

I think one of the big issues that every bank is wrestling with is just sort of a division in the industry between banks which have had low deposit bases for a long time because of the friction associated with moving your account, and then there are those banks that realize friction is not as powerful as it once was.

So we need to figure out a way to add other value.

It’s like a them-and-us equation here.

I think what’s interesting is to see all the people who are creating that next level of service, whatever it may be, whether it be wealth or digital experience or whatever the case.

There are a lot of banks out there that are standing around sort of thinking, “Hey, I ought to really reinvent my business because geography isn’t the most important thing anymore.”

There are also a lot of banks out there who are sort of thinking this is a sky problem.

You can really tell the difference between those two.

Actually, let me build on that for a quick second.

Spending some time with various CEOs, they acknowledge the pressure that they have to perform on a daily basis.

Look at those 90-day sprints that the team’s expected to not just hit but exceed.

Sometimes that puts into conflict the ability to get creative and say, “I’m looking at something that I think is going to impact our business really positively in the next few years, but I can’t show the result in the next few quarters.”

You can message this to the investor audience.

You can talk to your shareholders.

You can talk to your team.

But there are incentive programs that encourage certain behaviors that show results.

So I think there’s a natural challenge to say, how do I grow the business while continuing to protect and run what’s in store?

I think that’s where having, you’re talking about rebranding a business and offering a little bit more elegant solution, is compelling.

It gives people a chance to say, is that where I want to hang my hat?

Nikhil, anything you would add on in terms of any problems that you see out there that you think we need to solve?

I’ll give you two.

Full transparency, I think one is what we’re working on.

But genuinely, this integration pain that banks go through, it is an obstacle to delivering more value for customers.

If you were a bank and you got on a whiteboard and said, put all my systems aside, here’s what I want to do to create the most value, there’s a 95% chance you can’t do that.

Why?

Because you can’t get your systems to talk to each other.

You can maybe pay systems integrators a million bucks to do it, and even then, guys, it’s just not going to happen.

So I’m super stoked at what we’re working on.

I like that people say, “Nikhil, that’s a hard problem. You’re going to have to unseat eight vendors, and you’re going to have to really fill all those feature gaps.”

Absolutely.

That is what creates that 10x value.

You don’t want someone to say, “Oh, that makes sense. Go do it and get back to me in three months.”

That’s not a real lasting journey.

So that’s what we’re working on.

The thing that I think is untapped, and full transparency I think Narmi might tackle eventually, is marketing.

It’s the top of funnel.

Banks need more businesses and more consumers to go to them.

They need to get their name out there.

They’ve led with rate a lot the last two years, but that’s also, one, a commodity, and two, no bank wants to lead with rate.

They just have to.

So how do you create this top-of-funnel engine that is just very consistent, just like any other retailer or consumer does?

There’s a real opportunity there for a consulting company or a tech company.

Ideally both.

I would love to see a consulting company married with a product.

Yeah.

That would crush.

Yeah.

Just seeing the, if there are, for all I know, 16 Ps of marketing now, but if we just go back to the classic four or whatever, you’re right.

It’s been price that’s been leveraged.

The place, if you talk branch, I think we would probably all agree there’s been probably an underinvestment in the digital infrastructure generally, which probably includes the website and martech and any number of other things.

But the promotion has predominantly been price, and in some cases the product has been kind of samey in many cases.

So I guess it makes it easier sometimes because everybody just is, “Well, we just want to focus on service.”

But I think, because Ron Shevlin has pointed out, it’s the people who really try to come up with something different, whether it’s an entrepreneur in fintech or a bank like you mentioned, the bank in Texas, that’s really trying to be different.

So let’s go to the other side of it.

What’s something that you see working pretty well right now?

There’s a lot of optimism that Al pointed out in the hall here.

Whether it’s in fintech or it’s in the bank clients or the other institutional clients that you’re working with, anything that you see that you’re just like, you know what, we’re either killing it or we’re real close?

Anything out there that you see that you’re real favorable on right now?

Again, I’ll put you on the spot, but you guys can take a shot.

Yeah.

I mean, we were just talking about leading with price.

It’s actually interesting.

I think what the data would tell you is the industry as a whole, deposit betas have been much lower than I think people expect.

Now, part of that is because the big guys pay nothing and they attract so much deposits.

Even if you take them out, deposit betas actually haven’t been as high as you might think.

I think the average regional bank is paying like 3% on deposits, so Fed funds minus 100 to 200 basis points, depending on where you are.

Essentially a pretty good business to be in if you have an upward-sloping yield curve, which we don’t.

I think that’s the bigger issue.

I’m actually kind of happy with how the deposit pricing has held up in the industry generally.

I just think the macro has been really difficult.

If you think about a business that exists to do maturity transformation, the downward-sloping yield curve is the worst possible thing.

We now are getting to the point where we don’t have that anymore.

That’s going to be, I think, a very impactful thing for the industry’s P&L.

The other thing is, an industry, a bank buys and sells money.

Then the marginal cost of money is zero.

It’s pretty hard to make a spread.

We’re now also in an interest-rate environment that, just from taking term out of it for a second, is a higher-yield environment.

That’s also a good thing for banks.

So I think you have a couple of forces that are conspiring to make this a really interesting time in banking.

You look at the bottom line, it says the average bank earns 12% to 15% ROE.

I think we’re going to see 20% ROEs again.

Margaret?

Well, I would say I think a lot of tech companies, and even some of the incumbents like the cores and online banking players, SDKs are much better.

So it’s easier to integrate.

To one of those systems that then makes it easier for the community banks to do.

In the past, people had their elbows out and they didn’t want to have open APIs and they didn’t want to share data.

But now I think they realize the benefit of that.

I do think what you’re doing and some of the online banking platforms makes it easier so that you can cross-sell, you can get better data and you can transfer that data.

So there are some green shoots in that area, but there’s still a lot of work to be done.

You kind of stole mine, but I’ll just double down on it.

We’ve talked about this.

Narmi now, like 10 years ago, and this probably resonates with you too, these core banking systems were quite closed.

In fact, when I started Narmi about a decade ago, the number one kind of feedback from investors was, how are you going to get Fiserv to play nice, Jack Henry to play nice, FIS to play nice?

Well, we’re partners now.

We are partners with all three of those, and we have a good relationship.

I think we’re all adults.

There are competitive products, and it just is what it is.

At the end of the day, I generally feel both organizations are there to make the bank more successful.

I don’t think that was there a decade ago.

That’s one thing this industry has really gotten right.

I think it still has some room to grow, just to be transparent, but I’m confident on the path.

Yeah.

Well, listen, I know you guys’ time is valuable, and I want to make sure you have time to get back out to the conference and get back on campus.

But for starters, I wanted to say thank you for joining us and for your flexibility in doing this.

For everybody else out there, and thank you, Al, for joining us.

So Margaret Hartigan, CEO and founder of Marstone.

Nikhil Lakhanpal, co-founder of Narmi.

We have Todd Schell here from Warburg Pincus, managing director.

My co-host with the most there, with the pocket square in tow, Mr. Al Dominick.

Any closing comment, Al?

I just think the window of opportunity is open for people, and I just don’t want them to miss it.

Let’s work with a little bit more purpose and speed and just realize where everyone’s trying to solve very specific problems.

Partnerships and relationships are valued so much differently than they once were.

Your point about things being closed, being open, is tremendous.

But now’s the time to get it done.

So I’d love to see the execution and implementation as opposed to just talk.

Yeah.

Just one other thing for the folks that are here or watching folks here at the AOBA conference.

I’m always looking for some fun swag out there.

I just thought my dog Maple at home is going to like this.

This is a little CSI-branded, I thought it was a treat holder, but it turns out it’s a doggy-bag holder.

I’m sure there’s a metaphor in there somewhere for all of that, but I really like that.

That was another thing.

Then, speaking of swag, we have some high-quality swag for our guests here.

That’s right.

You get a very high-price...

No bucket hat is going to be...

Oh yes.

Because I know all of you either need to have a bucket.

These have, by the way, not yet been officially endorsed by the new Oasis reunion tour, but we think that’s imminent, don’t we, Al?

We’re working on the redlines as we speak.

So thanks again, guys.

Appreciate it.

Back out to you.

We’ll see you all out there on the road and on the next episode of Fintech Hustle.