Peer group comparisons might be the most important data point to understand and incorporate into the fintech sales process. Peer group comparisons are how regulators like the Federal Reserve measure banks of a similar asset size against one another.
While there are hundreds of relevant comparisons, there are a handful that should be evaluated by a fintech to determine where measurable results can be generated. Once measurable results are defined, the sales timeline will be shortened by a matter of months.
Peer group comparisons are one of the primary mechanisms regulators use to evaluate banks. There are numerous financial comparisons regulators use to evaluate the stability of a bank including balance sheet, profit, concentration and capital metrics used to understand how healthy a bank is on a quarter over quarter and year over year basis. Peer group comparisons can always be found via FDIC Call Reports and Uniform Bank Performance Reports ("UBPR's"), which are publicly available data sources fintechs should be using to understand where they can add value.
Peer group comparisons generally show the banks performance vs. their peer group and also rank a bank as a percentile within their respective peer group. For example, if a bank has a profitability rating of .13 at 3/31/2025 while the peer group has a profitability rating of 1.15 the comparison would suggest that specific bank is underperforming as compared to their peer group. Further, with a percentile ranking of 5, this bank is ranked in the 5th percentile against their peer group, which will certainly draw the attention of a regulator who will want the bank to take actions necessary to improve profitability.
The best comparisons for a fintech to evaluate are product specific depending on the what the fintech product is designed to accomplish. For example, fintech products that are designed to facilitate deposit growth for a bank need to be evaluating balance sheet and liability metrics they can help influence. In addition, with a deposit generation product that will likely influence interest expense and other P&L metrics, the fintech needs to be communicating not only how they will generate deposits, but how they will or can generate deposits that are accretive to earnings.
Banks are among the most sophisticated business models to evaluate because they are holding FDIC insured funds and using those funds to generate revenue through interest income using those same insured funds. Given the sophistication of the business model in the banking industry, fintechs need to match that level of sophistication in their sales process by clearly communicating the impacts they can make that will drive more favorable comparisons against peers.
When designing a fintech sales process, start with only a few key metrics to evaluate. Those simple metrics could include high impact comparisons like interest expense and profitability. Other simple metrics could include capital and liquidity or even real estate concentration comparisons depending on the fintech product being developed. Regardless, start with only a couple of relevant metrics and build from there based on the feedback received from the bank.
Far too often, fintechs are using generic talking points when communicating with banks. For example, "our product helps generate deposits" is far too generic as the value of different types of deposits are different and some types of deposits do not generate the desired financial result. Fintech's need to be able to validate the results they are communicating in a way that is meaningful and specific to a bank. When a fintech can accomplish this the sales process will be much more efficient and much shorter.
Fintechs can separate themselves when they can produce a meaningful financial impact for a bank that improves their standing within their peer group. However, accomplishing a meaningful financial result is challenging so starting with the end in mind, design products that banks can use to improve their business, but also generate a quantifiable financial result.
Banks are required to report to the FDIC on at least a quarterly basis as it relates to financial performance. Further, banks are required to report many different portfolio, risk and financial metrics to the FDIC. Fintech's can use this information to their benefit and need to become familiar with what is included in Call Reports and how to read this information.
Incorporating Call Report and UBPR information into the sales process is among the most important things a fintech can do. Develop an understanding of how to evaluate a bank, develop a process to communicate how a fintech product can be used to generate a financial result and lean into that result in the sales process. Doing so will reduce the sales cycle by several months, which is a win not only for the fintech but for the bank as well.
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