The Bank of St. Elizabeth, has tapped technology provider Neocova to help it derive business insights from its data in a partnership announced Thursday that will help the $180 million community bank unify its data on a single platform to run atop the bank’s core technology.

Like other community banks and credit unions, the St. Elizabeth, Mo.-based lender has limited in-house tech resources at its disposal, so has partnered with a tech vendor to help collect, manage and better understand the data its customers generate.

“We have to rely on other partners,” Brice Luetkemeyer, the bank’s chief executive, told Bank Automation News. “We have to partner with other companies to provide the same, or better, products and information and services that some other institutions can do,” he added.

While the addition of data-driven insights might be the carrot for smaller banks eyeing the transition, the inflexibility of core technology providers can often be the stick that pushes them toward new vendors.

In a study published by the Federal Deposit Insurance Corporation in December last year, community bankers used two phrases most frequently to describe the big challenges facing them with respect to technology: “keep up” and “core provider.”

Forty-six community banks cited their core systems or core service providers when describing the most difficult challenges of new technology for the survey, and more than 75% of community banks participating in the survey said that they “rarely” or “never” relied on in-house technology for non-lending digital banking products and services. For the FDIC report, 519 community banks were surveyed between April and June 2019.

“We are currently captive to our core provider and can only move as fast as they are willing to go. We have many initiatives (e.g., debit card tokenization) that are effectively stalled while we wait” for a [core service provider],” one community banker told the FDIC.

Meanwhile, big banks are not hampered by this issue.

“Bank of America, Wells, JPMorgan Chase, they do a lot of things with data as a matter of practice,” Matt Beecher, chief executive at Neocova, told BAN, “This is kind of old hat for them. It is harder for community banks to sort of access that.”

The Bank of St. Elizabeth will use Neocova’s “Fineuron and Spotlight AI” solutions to move toward a data-driven enterprise. Fineuron helps collate data from different branches or verticals, and Spotlight AI uses machine learning to deliver reports, analytics and models that anticipate actions based on customer behaviors. The latter also enables the bank to personalize some of its offerings for its customers.

Neocova’s solution runs on the Amazon Web Services cloud and will operate as a layer above the community bank’s core technology. The St. Louis-based tech provider was founded in 2015 and raised $9.5 million in a seed funding round in January 2020 with the participation of several community banks, including the Bank of St. Elizabeth, Coastal Community Bank, First Financial, Kearny Bank, Provident Bancorp and Sunwest Bank.

“The big core processing companies are inflexible; they are hard to deal with when trying to integrate other products and they tend to be very proprietary and keep you from using others’

Neocova last month also announced a partnership with the $104 million State Bank of Cherry in Illinois to help the bank shift toward a data-driven workflow.

Going forward, the Bank of St. Elizabeth is eyeing how it can “marry” the relationship side of banking with the new technology, Luetkemeyer said, so that it may evolve to survive in the changing market.