What does meaningful innovation look like for a community bank today? ICBA’s Justin Dunmyer joins Banking on Community for a candid conversation about the forces reshaping the industry and how banks can determine what deserves their attention.
From digital experiences and AI to payments and fraud, the discussion examines where community banking is headed and what institutions should consider as they chart their own path forward.
For additional perspective on the ideas discussed in this episode, ICBA offers resources on innovation, emerging solutions through its ThinkTECH Accelerator, and more information on the ICBA website.
Transcript
Saxon Prater (SP): Welcome to “Banking on Community,” where we explore the ideas and issues shaping the future of community banking. I’m Saxon Prater, joined today by my co-host, Brett Glover. Hey, Brett. It’s been a minute. What’s going on, buddy? It’s been a while.
Brett Glover (BG): I’ve missed a couple of these. It’s good to be back in the saddle.
SP: It’s good to have you back. Joining us both is Justin Dunmyer, Senior Vice President of Innovation and Product Strategy at ICBA, or better known as…Well, it’s probably better known as ICBA, but also known as the Independent Community Bankers of America. Justin works closely with community banks and industry partners. He’s got a bird’s-eye view of the innovations that actually make a difference, so we’re excited to welcome him onto the show. Justin, welcome.
Justin Dunmeyer (JD): Thank you so much for having me, Saxon and Brett. Excited for the conversation.
SP: So are we.
BG: Absolutely, man. Yeah. Obviously, I know what the ICBA does. Probably a good portion of the listeners today, customers, are familiar with what the ICBA does. And obviously CSI closely partners with the ICBA. But Justin, in your own words, if someone’s not as familiar, before we talk about innovation, why don’t you just give some broad strokes on the importance of the work that you guys do?
JD: Yeah, absolutely. Thank you, Brett. ICBA, we have one mission, and that’s to create and promote an environment where community banks flourish. And we do that through three key areas. We have advocacy, so always advocating for what community banking needs from an advocacy standpoint. We have a lot of educational programs as well. So anywhere from educating a new teller all the way through educating maybe a new board member or something like that. We have educational opportunities really across the board. And then the area I get to spend most of my time in is really our innovation area, and there is solely focused on how we can help the industry and community banks innovate. And innovation means a lot of different things to a lot of different people.
We’ll talk about that, I’m sure. But one of the flagship things that we do in our innovation area is we run what’s called the ThinkTech Accelerator, and that’s an accelerator program really laser-focused on what we would consider to be growth-stage fintechs that are serving the community bank space. And through that program, we involve hundreds of bankers with each cohort. We listen to the voice of the banker, and we use that input to help those companies better serve the community banking industry. I’m kind of just scratching the surface there. We do a lot of other fun things as well in the innovation space.
SP: That’s very cool. And I think you said it very well that it’s innovation means different things to different people. You see it, every technology company is like, “We innovate.” But it’s like, what exactly does that mean? So I’d love to hear from you. Tell me a little bit about your background and then also your innovation philosophy. What does it mean to you?
JD: Yeah. Well, thank you, Saxon. My background, really, I grew up in the community banking industry. So I spent a little over a decade working in community banks, primarily in roles where I was either managing or overseeing digital strategy, fintech partnerships, data and how the banks use data, as well as marketing automation and a few other things. I think as many of your listeners would relate to working in a smaller organization, you touch everything. So also touched operations, payments, et cetera.
When I think about innovation, I do like to demystify it a little bit. And so I do use a standard definition of innovation. And so what that is, is for me, innovation is a repeatable discipline of identifying better ways to serve your customers, operate your bank, and stay competitive using new ideas, technologies, or processes. And there’s a couple of key words in that definition. Rarely do I just repeat a definition. But it’s disciplined. So it’s not about chasing shiny objects and whatever the latest headline is. There is a strong element of discipline, and it’s not solely focused on technology.
So while technology generally plays a role in somebody’s innovation strategy or journey, it doesn’t have to. You can innovate by just slightly tweaking processes, or trying out new ideas, or even just listening to your customers or your employees in a different way. So innovation’s accessible to everybody and yeah, that’s how I’d like to define that.
BG: Loaded question with a really good answer. I think we need to take his definition and definitely post that in the comments. It’s really good, and we could spend the next 25 minutes in even boiling down just that definition even further. But Justin, I have a feeling like the work that you do on the day in, day out, and the work that I do is very similar.
From partnering with a community bank as a strategic partner, there is so much being thrown at community bankers these days. And like you just said, I’ve never met a community banker, even an executive that has one job. Multiple hats. Has your hand in a little bit of everything. With things being thrown around today, whether it’s from AI to digital transformation, even those things can mean certain things.
I’m just curious, in your conversations in the day-to-day that you’re having, where are those kind of landing? Where are you advising and how are you suggesting, or how do you help a bank go from this overarching maybe 30,000-foot elephant they’re trying to take on to practical and like, “Let’s get started on the journey”?
JD: Yeah, absolutely. Well, I think for me, what I always try to do is listen. I am fortunate enough to have the opportunity to talk with so many different community banks, different asset sizes, different strategies, different geographies, and so I’m constantly just listening. And as I have conversations with those banks, I’ve seen really five key areas where I hear the same theme over and over again. And maybe the exact use case might be a little different, but the themes present themselves, and those are AI of course. We were, what? Five minutes in. We got to talk about AI, and I’m sure we will.
It’s data. I think that banks are sitting on a tremendous amount of data. It’s one of the biggest assets they have, it’s just not on the balance sheet. And it’s the fuel for AI. AI eats data for lunch. So talking a lot about data. We’re talking about customer experience. And that’s being, I think, very much driven just by the competitive landscape we’re in. It’s way different than even a few years ago, and so just customer expectations are changing.
We’re talking a lot about fraud. Fraud continues to get more challenging, more sophisticated. Unfortunately, it never sleeps. I have unfortunately a lot of personal experience managing fraud situations. And then last and certainly not least, we are talking a lot about payments and money movement. I think that is more complex, and there’s almost more options today than there ever have been.
Now, I think the second part of your question was, well, go from the 30,000-foot view down to what do we actually do? And of course, that answer is going to vary by institution, by strategic plan, and overall goals. But I think the most compelling thing is start simple and start somewhere. Again, going back to my definition of innovation, you don’t have to start with a rip and replace of everything. Rip and replace your entire front end.
A place I usually like to talk with people about starting is review what you already have. It is amazing how much progress you can make just by really owning your digital banking platform, or your core, or your LOS, or whatever solution you’re talking about, diving deep, reading the documentation, attending webinars, and changing some parameters, updating some configurations. Those tend to be those $0 options that just have outsized impact and are accessible to anybody.
SP: That’s awesome. And that’s something they could do, yeah, as you say, right away. So I’m going to try to repeat what you said a minute ago. It seemed like you gave us a perfect framework for the rest of this conversation, so I want to make sure I got it right. Key topics that people are talking about, customer experience, data, of course AI, we can spend some time on that, fraud, and then payments. Is that right?
JD: You got it. Good memory.
SP: Well, let’s start with customer experience. So we talk a lot about how people’s expectations are changing. Where are you seeing gaps in community institutions? Or rather maybe a better way to frame it is where are you seeing opportunities?
JD: Opportunities, for sure. So I think that As we look at the community banking ecosystem or landscape, there’s always going to be outliers. There are folks that are community banks that are just crushing it on digital experience, for example. But as an industry, I think that we have seen a lot of competition from the neobanks, some of the big tech players, obviously the large banks and others in the space. And what I see happening is that consumers and business owners or businesses just expect incredibly fast, intuitive, digital-only experiences. And that’s the reality, right?
Their expectations of what they expect from banking are not only being informed by their banking at other institutions, but also what it’s like to go on Amazon or Netflix or any of these other platforms, let’s say. Right? You’re always being told what’s your next best product or what should I be doing. You’re being informed. It’s, again, hopefully a very clean and clear UI. So I think for community banks in particular, that is a layer that we’ve just sometimes struggled as an industry to stay up to speed on, right? I think that community banks have done so well at managing those local relationships, having strong impacts in their communities, building trust.
Those are all key ingredients. We just need to focus on extending those things into the digital experience. And, yeah, I don’t know if that fully answers your question, Saxon, but I’d say, the digital experience, that’s where I’d focus a lot of energy when we talk about customer experience.
BG: I think, I know you directed the redirect back at Saxon, but I can’t help but just think about some of the conversations that I have, and then by the way, what you just mentioned in digital experience also leads back to data, right?
You can’t separate those two. And what I think is widely known is that community banks, like no argument, have owned the customer experience. That’s why they’re so pivotal. And obviously the role they play in their communities, but what they do and excel in is relationships. And so I think it’s helping the community banks also understand that you can take that same philosophy that has made you wildly successful in your community, which is relational, right? That is the bread and butter, and then apply that to a digital strategy, a digital transformation, a digital engagement.
Because you’re staying very true to who you are and your core values of what made you and successful in your market, and you’re just applying it to a different channel and making the digital experience less transactional, more relational. I don’t know if that resonates with you at all.
JD: Oh, it certainly does. And I think that for banks, one of the first steps you can take in that journey as you make that digital experience more relational is simply assign an owner, right? Unfortunately, there are still times when maybe I’m talking with the bank, and there’s no clear owner of the digital experience, right? And what I’ll ask them is, “Okay, well, you probably know who owns credit risk in the bank.
You probably know who owns closing out the books from an accounting perspective.” I would argue that digital is a big enough channel. For many banks, it is by far the biggest channel, and you need to have very clear ownership of that.
SP: And I think it intersects obviously very well with data and AI as well. We’re talking about personalization, the data piece, and being able to manage that is essential, and AI can help with that. A couple of episodes ago, we had a really interesting conversation with a couple of representatives from our company who were talking about– These are digital banking guys, and they have a ton of experience on making the UX as easy and navigable as it can be.
But then the logical next step is like, well, it could be even easier than that. You can start doing some more conversational things. You can start thinking a little bit outside the box. At least that’s where my head goes on data and AI. But what about you, Justin? Where are banks prioritizing? How are they thinking about these topics, or how should they be thinking about these topics?
JD: So just to clarify, just the topic of data and AI, or more so how those are used in the digital experience? That is a great question. I think it could be either direction.
SP: Either direction
BG: Both.
SP: Yeah.
JD: So what I hear in a lot of my conversations with community banks is using the data to better understand their customer, right? And I think that then extends into, well, how you offer services, likely through a digital channel. And that can be both offensive and defensive, right? I think a classic defensive example that we’re all probably familiar with is look for deposit leakage, right?
Where are my customers maybe moving money to other platforms or closing accounts, so on and so forth. I think there’s a lot of analysis that should be done on that too, because it’s important to note, customers might not close their account with you, right? But if they move 95% of their deposits, that probably means something, right? Or 90% of their activity, right? The direct deposit switches, the payment activity switches, right? It doesn’t have to be that they close our relationship. So on the defensive side, I see a lot around that, right? Where is money moving? And that’s valuable information.
I think on the offensive side, there’s a lot of opportunities you can uncover by digging into the data. And when I say the data, I guess I’m probably mostly talking about transactional data, but I think it’s important to expand the lens a little bit as well, right? So the transactional data may tell you what merchants or what customers are using merchant processing outside of your bank.
It might tell you where their accounts receivable is coming from or if they’re using some type of platform there. And some of that will tell you where you should maybe focus some of your efforts, right? Where’s the addressable market in your existing customer base that you can go out and meet, right? So that’s an offensive example.
I do think it’s also important if you wrap your hands around the transactional data. I am personally a very big believer in what I would call behavioral data, right? So looking at their online banking activity, looking at aggregation-type things, right? If any of the account aggregators are being used, how those are being used. And then also talking to your customers too, right? The data tells a good picture, and it’s important to pay attention to it, but I think it’s best when it’s both, right? You have the conversation-based approach where you’re understanding experiences, feelings, those types of things, and then you have some of the raw data that’s telling you, yeah, what’s actually happening. So I think by starting with the data, it can help drive where you make investment or spend energy and effort on your digital platforms, as well as help inform the next steps.
Then obviously AI, I think AI is the natural progression of that. There are so many angles you can go with that. There’s a lot happening right now with obviously agentic banking or agentic AI. I think there is an interesting thing developing now with the large LLMs allowing the connection of banking accounts and credit cards and financial accounts. I think that there are folks in the industry that are starting to think about where does the relationship live in that environment, right?
So if we zoom out to the future, and in that world, all of us have our LLM of choice connected to our bank accounts and our credit cards and our investment accounts, well, who really owns the relationship then, right? And so there’s a lot to unpack there in whether or not agentic banking can maybe live within the institution, or does it live outside of the institution? I think we need to wait to see how the market resolves itself there.
BG: Yeah, that’s super interesting. And we could keep talking just about this one topic for literally hours. I like to nerd out on it because I find this stuff fascinating, but I think this is also a great point of sometimes where community bankers get a little overwhelmed. It can be overwhelming, right? Because you’re also doing the day-to-day, very real job of running a bank in your current environment and making sure your current customers are happy and all those sorts of things.
So it is completely understandable how quickly that can seem like a lot and be a hard pill to swallow, if you will. You know it’s important, but man, it can be tough to wrap your head around. That definitely makes sense, but I’d love to shift just a little bit to payments, because that is also a space that is rapidly shifting and would love to hear when customers are contacting you, community banks are contacting you, what are the conversations centering around with payments, whether that’s RTP or FedNow or are checks ever going to go away?
But like you said, also the fraud piece of it. I have one customer in mind right now, and I can hear his voice, and he’s like, “Brett, real-time payments are no good to me until there’s real-time fraud that I can count on.” But what are you hearing when you have those conversations?
JD: Well, Brett, you took the words out of my mouth on the relation between real-time or instant payments and fraud. I think that the lack or slow adoption of real-time fraud mitigation has slowed adoption of real-time payments in the community banking ecosystem. So I agree with your customer there. I’d say that all the things you mentioned I’m hearing from banks. Are checks ever going to go away? Well, probably not, right? Here we are in 2026, and they’re still there.
Hearing a lot of discussion, obviously, around stable coin, digital assets. I think that there’s still a lot to be determined there. So I think there’s a lot of interest today, but maybe not a whole lot of use cases or deployments is what I’d say. Hearing a lot of discussion around RTP, FedNow, as you brought up. Again, I think that the reality is most folks, if they are on those rails, they’re in receive-only mode, which is great.
As the bank, “Sure, I’ll receive your money instantly.” But it gets a little more scary, a little more challenging to send that money instantly. I think, though, one of the most important things, though, in all of the payments discussion is, again, customers’ expectations of what exists. So it’s one thing to sit there as the bank and deeply understand, okay, ACH works this way, RTP works this way, Visa Direct works this way. As bankers, we can get in our own head and really dive into the details. I tend to think for many consumers and SMB-type customers, the reality is they probably don’t care as much as we do about how the money moves. They just want it to move with confidence, with speed, and with certainty and some level of fraud protection.
So sometimes I almost hate to get bogged down in like that. Well, which rail is better? Certainly, those are conversations that need to happen from a strategy or technology standpoint. But the reality is let’s make payments easy for our customers. Because that’s what the customer wants from the bank. They want other things, depository, lending, but for a day-to-day consumer or small business, if the payment stop working, that’s a lot of friction in that relationship. And I think we’ve all either experienced or heard horror stories of payments failures leading to customer loss or similar.
BG: I can’t help it. I think I have two Gen Z kids, are both adults with jobs and entering into the space, and they know what I do for a living. They love to make fun of me about it and how I like to nerd out on this kind of stuff. But I assure you, neither one of my Gen Z children or any of their friends are walking into their bank and saying, “Can you help me send a FedNow?” They just want to move money, and they want to do it right now, and they want to know it’s safe, period, end of discussion.
And I think you’re hitting on an important topic there, and certainly, as Saxon knows, something that we have talked a lot about recently, and that is actively a part of CSI strategy and payment modernization, and it really is more about ensuring that your customers, our customers, and customers have a really good experience with moving money and aren’t necessarily deciding, well, should this be an RTP or a FedNow? Like you said, they don’t care. Our job is to give them the tools and technology that they don’t have to understand, and it works, right?
JD: Absolutely.
SP: I think also, I keep going back to your initial definition and philosophy of innovation. One of the first things you said was discipline. I think that’s huge because there’s so much, there are so many headlines, all of these flashy topics. You alluded to or you mentioned stable coin earlier.
At the end of the day, the question is, what are you going to do with it tomorrow? That’s probably where you should set your priorities. What does your actual customer base need, and what can you take quick, immediate action on?
JD: For sure. And Saxon, if I could just add one other comment because I think it’s relevant. Another important thing on payments is talk to your customers. So when I was at a financial institution, I spent a lot of time talking with our commercial clients, and one of the topics when I was there, we were very much evaluating, well, what is our real-time payment strategy? And I’ll be candid, is I went out and talked with some of our significant commercial customers. Not one of them told me, “We need faster payments.” They needed easier user interfaces. They needed improvements to how they could upload in bulk, send transactions. And so I almost personally fell into the trap of chasing real-time payments, thinking, “Oh, my gosh, everybody needs this.
That’s the future.” And that’s true. I’m not saying that the customer base I was working with is the same as every other customer base, but certainly by just spending the time and going to lunch, calling some customers, doing surveys. The things we should be doing to listen to our customers. I quickly found out, you know what? Let’s just stay in receive-only mode. Let’s not go down this route. Let’s instead focus on, again, other payments things that we can be focusing on.
BG: I 100% agree, and ditto. There’s a lot of messaging out there right now from a lot of experts telling community bankers what they need to do and what they need to do right now. And I think we forget that community bankers really are the experts on their market and their customers.
And I have also advised my customers strategically, there is so much being thrown at you. Don’t forget to talk to your customer because it may and it should help guide your own specific strategy because what may work for a community bank in another market may not be what your customer base needs and is asking you for right now.
JD: Absolutely.
SP: Well, Justin, this has been a great conversation. I’m sure we have left a lot on the table to discuss, but I want to kick it over to you. Any final words or things that you would like our listeners to be thinking about?
JD: Yeah, I think one thing I want to leave is a takeaway, I guess. And is that in today’s day and age, really, the world’s accessible to you. So if you’re a leadership team, if you’re a banker, I encourage you to go out and experience some neobanks and some fintechs and some things that are not community banks. Not so that you move the relationship there or anything like that, but use it as a tool.
I call it the secret shop. I think if you go back in time, that was more sending folks into the branch to make sure we’re doing our cross-sells and whatnot. But go secret shop what’s out there. Experience what banking may feel like to maybe a Gen Z individual that’s never banked with a traditional bank. Have those experiences.
And another fun tip, if you really like the experience, look at the T’s and C’s, try to figure out what technology is being used there, because it’s probably available to you as a bank as well. All these fintech players are generally looking to add new relationships. So I think that’s a very practical takeaway just to frame what is the competitive landscape today. The other thing I guess I’d want to leave with is that I’m excited about the future of community banking.
Again, I want to say the technology and the digital stuff, that’s easy. You can get there, and that’s said a little tongue in cheek. It takes effort, it takes work, it takes focus. But what all the other players in the space haven’t yet captured, fintechs and neobanks, is trust. Local relationships, and the real impact in their communities. And as community banks, we have those things.
We just need to extend what we’ve already built into that digital layer and continue to meet our customers where they are.
BG: Absolutely. Right on. Well said. Community banks are resilient. I believe in them. They’re going to continue to be resilient. If there’s a community bank listening that maybe never has thought of engaging ICBA, a trusted organization that is the very purpose of helping community banks and maybe something has piqued curiosity, how would they get in touch to have a trusted opinion on innovation or strategy?
JD: Yeah, absolutely. So I would offer up myself, my contact information. Again, my name’s Justin Dunmire. Maybe we can put my email or something in the notes. We have a fantastic, though, innovation team. We have Wayne Miller, we have Pierce Sloan, Adam Mahone, Christina Morris. We have a whole team, and others, too. I don’t want to go through the whole roster. But every one of those folks would be more than happy to pick up the phone and talk with a banker. We are constantly in learning mode. And so I learn just as much on every conversation I have with a banker.
So contact me. Obviously, if you want some of the basic information about ICBA, go out to the website. There’s all sorts of information there as well.
BG: Well, Saxon has magic powers. I’m guessing we’re going to be able to get a link or an email address somewhere.
SP: I’m sure that can be finagled on the back end with links or what have you. Justin, this has been fantastic. I can’t thank you enough. Hopefully, we can do this again sometime. But I know that we’ve only really scratched the surface, so I’d love to keep the conversation going.
JD: Absolutely. That sounds great. Would love to do it again. Thanks for the partnership.
SP: Yep. And thank you all for listening to Banking on Community. Be sure to follow and subscribe wherever you listen, and don’t miss our next conversation. We’ll see you next time.