Garrett Smith
Co-Founder and CEO, Community Capital Technology
Age: 35
Industry experience: 15 years

Community banks, credit unions and even larger banks are often in situations where they need to diversify their loan portfolios, optimize their balance sheet and risk or support client growth through expanded access to capital. These activities up until recently were often completed by selling loans to other financial institutions through loan brokers using spreadsheets and localized networks. Now, a new fintech called Community Capital Technology has developed a national marketplace that enables financial institutions to buy and sell loans to one another.

Founder and CEO Garret Smith is a serial entrepreneur who has worked in the banking industry for years. Prior to launching Community Capital Technology, he cofounded two other marketplace platforms. His first company was a marketplace designed to dramatically reduce the cost of mobile connectivity in emerging markets by redistributing telecommunications infrastructure equipment to minimize balance sheet risk for emerging market mobile networks.

His second company was Opportunity Network, a global business networking platform for cross-border trade, investment and development that partnered with financial institutions around the world to bring their highest-value clients onto the platform to identify unique partnerships, capital and acquisition opportunities with vetted clients of other banks. Today, the platform has over 40,000 companies live on the system and has established partnerships with multinational banks around the world.

Q: Why did you see a need for a digital loan marketplace for banks and credit unions? What will it help these financial institutions accomplish?
A: Over the last decade [as an entrepreneurial client of a community bank, a partner of and service provider to a multinational bank], I’ve continued to follow the industry closely and seen how market dynamics and regulatory pressures have imposed increasing challenges for these small- to mid-sized financial institutions, making it increasingly difficult for them to effectively compete and attract and retain clients.

A few years ago, I realized that there was a powerful opportunity to use my own experience building marketplaces and leveraging technology to provide banks with affordable technology that could drive real efficiencies, transparency and profitability. Through the platform, member institutions – community banks, credit unions, community development financial institutions – can manage their balance sheet risk more effectively by directly trading loan assets with other peers and partners. By providing the tools for these institutions to efficiently source buyers or sellers of loan assets, we can help them better serve their clients and facilitate greater access to capital for small, growing businesses like my own across the U.S.

Q: What are some surprising insights from the marketplace and transactions that have taken place on CCT?
A: While we had done quite a bit of research to validate the market need and opportunity, we have been surprised by level of interest and the willingness of the traditional institutions to work with each other directly as well with other non-traditional originators and investors. The growth in the marketplace and the peer-to-peer transactional activity taking place through the platform evidences that these institutions are eager for cost-efficient alternatives to traditional loan brokers that provide more control and transparency.

To date we have seen a broad range of transactions – varying by size, loan type, transaction structure and counterparties. We have facilitated everything from the purchase of a large pool of student loans by a community bank from a digital lender, to a regional bank shedding non-core, credit-only commercial real estate and commercial and industrial relationships, to a community bank and non-bank lender working together on a participation opportunity.

Q: When you were just starting out in 2017, what was the biggest challenge you faced as an early stage fintech?
A: Having helped build several companies, I have learned from experience the critical importance of deeply understanding the market before building a product – technology or otherwise – to serve it. In the early days, the biggest hurdle was gaining the market feedback needed to begin building the initial product. I knew there was an enormous market opportunity, but I wanted to ensure that the solution was intuitive and, most importantly, designed to really address the needs of our targeted community bank and credit union customers.

A funny story on this front – when I first launched the company, I rented a car and drove to more than 60 different bank branches with a stack of presentations in the passenger seat. I would walk into the branch and ask for a loan officer, who expected a new client had just walked into the bank. As the discussion began, I would bring out the presentation and begin to ask questions to understand their challenges, how the system might work for them, ways they wanted to share information, barriers to entry, needs for growth, etc.

I printed a lot of presentations as the iterations came hard and fast, and the insights I gained from these conversations not only shaped every aspect of how we are building out our platform, but also as well as our business model itself. The most amazing thing to me was [loan officers’] willingness to share their needs and requirements to build a system that truly worked for them.

CCT started as a project and turned into a passion. I’m proud to say that many of those early discussions were with banks that are now our clients. In fact, of the banks I visited, many of them signed up to the pilot, and they are now the some of our best clients, doing transactions on a quarterly basis.

Five Steps Smith Took to Integrate with the Core:

1. Focused early on building both the strategic partnerships and the technical infrastructure to ensure CCT’s platform can easily communicate and exchange information with clients’ systems and third-party data and solution providers.
2. Flexible architecture and APIs enabled CCT to seamlessly integrate with everything from core technology providers to loan management systems and analytics platforms.
3. Designed CCT’s platform to facilitate integration.
4. Focused heavily on building formal and informal partnerships with some of the largest technology and information providers in the financial services industry.
5. Applied and were accepted to Fiserv’s INVFintech Accelerator program last year, which provided CCT with direct access to one of largest technology providers to its client base.