LAS VEGAS — It’s a common refrain from bank CEOs: “My bank is a technology company.”

But the reality is much rarer.

JPMorgan Chase is showing it takes fintech seriously by building (or buying) a Silicon Valley campus, which will house 1,000 employees, including 250 from recently acquired WePay. (CEO Jamie Dimon famously warned, “Silicon Valley is coming!” before bringing his bank to Silicon Valley.)

But some banks have taken it even farther. Pasadena, Calif.-based Green Dot is offering “banking as a service,” unbundling itself, and announced in April it would embed its DDA accounts into the investing and saving app Stash. Other banks have caught on to the “banking-as-a-service” terminology — BankMobile used it in a presentation in which it also revealed it had a partnership with T-Mobile.

And Umpqua Holdings, based in Portland, Ore., built its own technology company, Pivotus Ventures, which launched a product for customer engagement recently, Go-To. But yesterday the news broke that Umpqua had agreed to sell Pivotus to the fintech vendor Kony. Terms of the deal were not disclosed.

The Umpqua deal shows banks may have a hard time being technology companies. But Green Dot insists it can.

“We were a technology company first,” Seth Ross, senior vice president of business development at Green Dot told Bank Innovation. Green Dot has adapted well to becoming a more highly regulated entity, and Ross pointed to its multiple partnerships with such companies as Apple, Intuit, and Uber.

Stash has seen strong early adoption of the checking account feature, and is adding additional features soon, such as insurance. Over 80,000 customers pre-funded their deposit accounts, which have yet to officially launch,  Stash CEO Brandon Krieg told Bank Innovation.

Rilla Delorier, executive vice president and chief strategy officer of Umpqua, told Bank Innovation Pivotus had “found a great home” with Kony. Pivotus as part of Kony will support Umpqua’s customer engagement platform Go-To, and Umpqua will be a Pivotus customer.

“We looked for a good home for [Pivotus],” Delorier said, adding that Kony will be able to “accelerate the product roadmap,” in a way Pivotus as part of Umpqua perhaps could not. “Having a software company inside a bank, it’s a case of ‘One of these things is not like the other,” she said.

Most but not all Pivotus employees will move on to Kony. None will revert to Umpqua.

According to Cort O’Haver, president and CEO of Umpqua, the sale of Pivotus to Kony comes as Umpqua prepares to accelerate its Human Digital Banking approach through a series of strategic partnerships. “Umpqua’s Human Digital strategy and customer-obsessed culture are clear differentiators for us,” O’Haver said. “As the speed of technological change continues to accelerate, it’s important that we’re able to make the most of our strategy and size by developing a network of partnerships that can accelerate our pace of differentiation. Finding a smart home for Pivotus, with the capital, technical expertise and customer focus, is important for Umpqua moving forward, and Kony is a terrific partner.”

Core providers are often left out of discussions of bank-fintech collaboration, but they remain central to it. Lee Wetherington, director of strategic insights with Jack Henry & Associates, noted ruefully that his company launched a product, Conversations, shortly after Go-To, but Conversations, now live with several FIs, had been in development for some three years.

Kevin Grieve, managing director for financial services and payments in North America for Accenture, told Bank Innovation that banks and fintechs are completely different creatures. “Fintech is more ‘tech’ than ‘fin,'” he said. “Fintech companies have never made it through a tough credit cycle, but they may have a unique skill set in customer experience not utilized by incumbents. They haven’t been through a tough regulatory review.”

Grieve said, “Fintechs have to collaborate with incumbents. Incumbents have to be able to integrate fintech.”

Customers Bank CEO Jay Sidhu spoke on a panel about innovation at small banks at Money20/20 here:

I would ask all of you in community banking to look at your 80-20 rule, and the 20% of customers who give you 80% of your business, when they die or whatever — what are you doing to attract other customers?

Sidhu has 1.2 million customers in BankMobile, many of whom are millennials — but meanwhile, Customers is trying to spin off BankMobile, but has been stymied by regulators.

Jason Gardner, CEO of the payments platform Marqeta, said that Square — not Apple or Amazon — may be the closest thing to a tech company beating the banks at its own game. “They have great technology,” he told Bank Innovation. “They are able to quickly build out lots of different products — Chase doesn’t do that.”

The Pivotus news may be deflating to those rooting for banks-as-technology-companies, but bank-tech overlap will only accelerate, and instead of worrying about the competition, banks should focus on the customer.

Small banks think they’re competing with large banks. Large banks think they’re competing with Apple and Amazon. Are they both right? #money2020

— Bank Innovation (@BankInnovation) October 22, 2018