Deborah Kovacs has worked in the financial services industry for 35 years, primarily in product management that solves business problems that impact financial institutions.
Kovacs co-founded Finxact – a Jacksonville, Florida-based banking software company – in 2016. Prior to helping launch Finxact, she spent four years as the vice president of product management at Ardmore Banking Advisors and in similar roles at other tech companies including Akcelerant Software, CashEdge and InvestorForce.
In this interview with FinLedger, Kovacs discusses her current role as chief product officer at Finxact, how the company has pivoted with COVID-19; her career and the challenges facing women working in the fintech industry.
FL: What are some new products that benefit financial institutions and why is core banking critical?
DV: Finxact has developed products that support features for banks for retail and business deposit and loan accounts. Some financial institutions are moving from consumer to small business lending and rollout additional product types over time as the bank moves into different areas of banking. This provides the institution with the ability to easily transform its business offering. Integrations with various payment systems are also included and provide a number of ways to move money between the banks and other banks.
There has been a lot of interest from consumers on the concepts of wallets in people’s savings accounts because it gives them the ability to segregate money and to allocate money for their goals for savings.
It’s very unique to our core application and is a great way for consumers and small businesses to allocate money and offer flexibility for different products such as different savings rates and goals.
Finxact has also launched real-time payments for financial institutions since a lot of payments are still moved through ACH and there is some delay.
Core banking is the ‘engine’ that sits in the background that is responsible for the accounting for deposits and loans and is very integral. It makes sure all the accounts balance in real time.
At Finxact it is 100% API driven and any third party can access features. Ours is very unique and allowed us to design products and features and see what products are relevant and which ones are outdated. This is how we can avoid pitfalls. Core banking runs in the cloud and allows fintechs or financial institution to be very robust and to introduce new products quickly and avoid acquiring another application and integration challenges on the backend.
FL: Is the company seeing any Covid-related tailwinds?
DV: The coronavirus pandemic did impact our product plan because we intended to focus on business lending later this year, but escalated and participated with several banks for the Payroll Protection Program. We used our core banking to originate and integrate two other software companies that provided online lending software capabilities – it can usually take months, but we accomplished this in several weeks.
Our customers accepted PPP loans from new and existing customers and were able to do it quickly for new customers.
If you don’t retool, you will not be able to do that. Now banks are saying, “we have to invest and need it to be robust.”
Live Oak Bank, a digital FDIC-insured bank with $8 billion in assets and a subsidiary of Live Oak Bancshares (Nasdaq: LOB), announced in September that it is utilizing Finxact’s core. The bank now offers business savings and CDs on the Finxact platform. Finxact is also currently powering the bank’s PPP loan portfolio that is helping over 10,0000 small businesses, including both new and existing customers.
Now seeing earlier adoptions and making use of those features.
FL: What are some challenges about being female and working in the fintech industry? What advice would you give women in this industry?
DV: My career started 35 years ago, but things have become dramatically better thanks to the efforts of a lot of women and other people in the financial industry. There is more work to be done until there is a fairer playing field.
Embrace opportunities when presented, but also look to create opportunities. Go forward and help other women succeed and contribute to make the playing field even more fair. There are more women in fintech now, but there are still areas that are more predominantly male.
There are women now that are holding very important positions in executive roles and driving development and technology at companies. There has been significant advancement in the opportunities open to women today in banking and technology. Women should support other women, as well as continue to push for changes that help further level the playing field, especially in industries where advancement may be lagging. There is still a lot of gender bias when it comes to assessing the management styles of men and women.