Alloy Labs adds seven banks to community banking consortium

Alloy Labs has added seven lenders to its community and mid-size banking consortium, taking its membership above 90 banks across 46 states, the group said in a Monday announcement. The member institutions together hold close to $500 billion in assets, according to Alloy Labs, giving the network a broader base as banks weigh technology spending, margin pressure and customer retention.

The new members are BTC Bank, Carter Bank, First Bank of the Lake, Focus Bank, Hatch Bank, Rhinebeck Bank and StonehamBank. Alloy Labs said their businesses span sponsor banking, embedded finance, agricultural lending, Small Business Administration lending and mutual community banking.

Alloy Labs said member banks take part in its Centers of Excellence and working groups. Those forums are designed to pool operational knowledge, compare performance against peers and create a route for banks to test and expand new products without increasing staff, according to the announcement.

For smaller and mid-size lenders, the consortium model can spread the fixed cost of product research and technology experimentation across multiple institutions. A pilot allows a bank to test a service with limited scope before deciding whether to expand it. Peer benchmarking gives executives a way to compare practices and outcomes with similar institutions rather than relying only on vendor claims or internal data.

New member banks

• BTC Bank, a community bank serving customers in Missouri, Iowa and Arkansas.
• Carter Bank, a regional community bank serving customers in Virginia, North Carolina and South Carolina.
• First Bank of the Lake, a nationwide SBA lender operating in 38 states.
• Focus Bank, a community bank serving customers in Missouri and Arkansas.
• Hatch Bank, a technology-focused sponsor bank based in San Marcos, California.
• Rhinebeck Bank, a community bank serving New York’s Hudson Valley.
• StonehamBank, a mutual community bank based in Massachusetts.

Alloy Labs framed the expansion against a competitive setting in which community and mid-size banks face challenges beyond nearby branch competitors. The group cited higher customer expectations, pressure on margins and technology choices as issues that are difficult for individual institutions to address on their own.

The announcement said Alloy Labs membership is intended to add executive capacity by connecting each bank with counterparts across more than 90 institutions. The group described that access as an alternative to treating innovation support as a standalone service purchase.

PYMNTS has separately reported on the account-engagement problem facing community banks, describing an “everyday test” for whether a deposit account becomes a customer’s primary financial relationship. In that analysis, PYMNTS said a primary account is typically where income is deposited, household bills and subscriptions are paid, debit cards are used and money moves readily in and out.

Accounts that do not become part of daily financial activity can remain inactive or lightly used, PYMNTS reported. The publication also cited PYMNTS Intelligence research finding that 55% of community bank decision-makers said their technology stacks were fully modernized, while many newly opened accounts still did not become primary relationships.

PYMNTS attributed that gap partly to payments capabilities, reporting that many community banks remain confident in their modernization work but still lack tools that support sustained customer engagement. Alloy Labs’ announcement positions shared product work and peer collaboration as one response to those operating pressures.

This story draws on original reporting from PYMNTS.