Fintech company banks on consumers' values-driven monetary decisions

Climate First Bank, a St. Petersburg-based community bank founded in 2021 by Florida banking industry veteran Ken LaRoe, tried to separate itself from the outset. That especially includes its emphasis on providing loans for solar power facilities and other green-energy projects.

As it looks ahead to 2023, the bank plans to accelerate its approach to serving clients who want to do good with their money. A big step there comes from its parent holding company, Climate First Bancorp, which recently launched a fintech subsidiary, OneEthos, that’s creating a suite of what it calls “mission-aligned” financial products and services.

OneEthos’s first product was the digital solar-lending platform it created for Climate First Bank, currently its sole client. That helped the bank reach more than $200 million in assets and exceed $140 million in loans within its first 12 months in business.

Now, thanks to the acquisition of a tech startup called Ecountabl, OneEthos plans to introduce a values-driven online and mobile banking platform that it will eventually market to community banks and credit unions nationwide. One of the product’s core functions will be to analyze credit and debit card transactions and let bank customers know about brands and companies aligned with their values, whatever they might be; it can also suggest local and minority-owned businesses that provide similar goods and services.

But with all the environmental, social and governance (ESG) information already available to consumers, do banks need to provide such a service, and does it even make sense from a return on investment perspective?

Climate First Bank Chief Technology Officer and OneEthos CEO Marcio deOliveira says the answer is yes. He believes OneEthos, strengthened by Ecountabl, will be a difference maker for a big reason that can be summed up with one word: community.

“For community banks,” he says, “the community was defined by a geographical area. Because of technology, that is changing. We define community a little differently — as a group of people who share the same values.”

That change has been well documented — and bemoaned — in the political realm, where hyper-partisanship has taken hold. But in banking and finance, leaders such as deOliveira — a veteran of St. Petersburg-based C1 Bank, which was acquired by Bank OZK in 2016 — see huge upsides.

“It goes beyond environmental sustainability,” he says. “The discovery component is very powerful. We are able to offer a solution that’s appealing to clients who feel strongly about their community, and that could be a lucrative opportunity for both OneEthos and its holding company.”

Ecountabl boasts a database of more than 10,000 companies that includes a full index of each firm's ESG performance, and it has created an algorithm that runs in the background of online and mobile banking platforms, ranking transactions “according to what’s important to you,” deOliveira says. “It’s a data company.”

OneEthos, he adds, initially approached Ecountabl thinking it would hire the firm as a vendor. But CEO Andy Burr and CTO Justin Bretting, who have since joined the OneEthos team, thought a buyout made more sense.

“We were going through a buy vs. build analysis,” deOliveira says. “Over a period of several months, we determined that an acquisition would be the best option for everyone. It would allow us to move faster in terms of development, and we would provide the Ecountabl team with the funds and resources they needed to execute our vision.”

Climate First Bank customers, deOliveira says, should begin seeing the effects of the Ecountabl acquisition in late first quarter or early second quarter of next year.

But that, if all goes as planned, will be just the beginning.

“A midterm strategy is to share the technology we’ve built with other financial institutions,” he says. “There are more than 10,000 small financial institutions and organizations that are trying to solve this problem of community and how you define it in a digital age, when people are not going to bank branches anymore. How do you solve for that? We would like to open up our technology to as many banks as possible, and that is exponential.”

However, few banks, at present, are driven by the same values as Climate First Bank. What if a customer at a different bank that adopts the OneEthos platform doesn’t want his or her spending tracked and analyzed?

“That concern is valid,” deOliveira says. “We are making sure that we have controls in place, that we are meeting all compliance and regulatory expectations. And yes, our clients will be able to decide if they want to use that feature or not.”