Christina Trampota

Community Development Financial Institutions (CDFIs) are banking institutions designed specifically to serve underbanked communities. These communities are often low on the socio-economic ladder, and they often need financial services designed specifically for them. But because the traditional banking model often views people and businesses in these communities as high risk, they’re often overlooked.

That’s where financial institutions like Quontic Bank come in. Quontic Bank is a CDFI based in New York City, but because of their emphasis on the mobile experience, they’re able to serve customers in all 50 states. Patrick Sells, Quontic’s Chief Innovation Officer and this week’s guest on the Fintech Growth Talk, sees this not only as an advantage but an evolution.

According to Sells, Quontic is aiming to be the first “mobile-only” banking institution by essentially getting rid of online banking and moving all functions to their mobile application. This suits Quontic’s customers and their needs well, given that approximately 71 percent of U.S. adults earning less than $30,000 per year own a smartphone. That might be smaller than smartphone penetration among all incomes (96 percent), but only 56 percent of adults in that income bracket have home broadband. In other words, people in underserved communities dramatically rely on their smartphones for everything related to the internet, including banking.

For CDFIs, moving to mobile-only is a logical step, says Sells. For the underbanked, CDFIs have more flexibility around borrower requirements on loans, which is the top banking service underserved populations often need. Traditional banks have tighter regulations and policies that have been developed over decades, but they were never designed for the modern economy. For example, most gig economy workers are underbanked because the documents they have don’t check the boxes a traditional bank requires. So, it’s more difficult for them to get mortgages and loans. However, there is a lot of other data that banks can now analyze and still make responsible loans that are good for both the borrower and lender. That’s why being able to open an account in three minutes on a mobile app is an essential benefit mobile-only CDFIs can offer, but it’s also a starting point for all other banking services.

That said, it’s not realistic to be mobile or not, or digital or not. Sells believes the future of banking is a much more integrated mobile/in-person experience. In fact, he envisions a future where customers can use self-serve kiosks in physical branches to conduct all their banking (not just ATM deposits and withdrawals) that are safer and more secure.

What’s holding back the banking industry, then, from adopting these more customer-centric digital features? Sells believes it’s a lack of developers working directly in banks. Most banks typically outsource this function to development agencies and fintech firms. The challenge, of course, is regulation. Where fintechs often thrive with innovation, they also often fall short when it comes to understanding compliance and implementing technologies and/or policies that protect them and the financial institution with whom they’ve partnered. But having developers in house can make a huge difference because they have “all the keys to the kingdom,” and don’t have as many regulatory obstacles to getting the data they need to develop digital services.

Of course, mobile-only banking is likely to accelerate because of COVID, but innovation will as well. There’s not a bank out there that doesn’t want to innovate, says Sells, and it’s often just a matter of cross-breeding innovators with compliance officers at both fintech firms and financial institutions.


Patrick Sells, an award-winning entrepreneur recognized for digital innovation in banking, is on a mission to transform financial services through the fusion of Bitcoin and banking. A deeply held belief of Patrick’s is that the two should be symbiotic in order to create maximum financial security for all. As the Head of NYDIG's Bank Solutions business, Patrick will build upon the momentum from NYDIG's efforts to bring the needed technological infrastructure for banks to be able to offer Bitcoin products and services such as custody, rewards programs and lending opportunities. Prior to joining NYDIG, Patrick served as Chief Innovation Officer at Quontic Bank, where he evolved the firm into a leading adaptive digital bank in the U.S. through a focus on technology and innovation. Prior to Quontic, he built and ran several technology, data and digital marketing companies, and has advised banks and fintech companies on regulatory compliance.

Listen to our full interview with Patrick Sells here: