Risk and Reward (Editorial)

Evolve Bank & Trust has seven locations in Arkansas, four of which are full-service branches, including one in Jonesboro. (Google Maps)

Technology and artificial intelligence are accelerating at breakneck pace, presenting great opportunities for companies willing to try new approaches. It also comes with risks.

Evolve Bank & Trust out of West Memphis could be the poster child for this reality.

Evolve’s rapid growth since 2019 — on the back of its banking-as-a-service offerings and partnerships with fintech companies — is an exciting story. It grew from a community bank with $450 million in assets to an institution at the forefront of its banking niche in the state with $1.75 billion in assets in just three years. Net income exploded from $4.7 million in 2019 to $25.5 million in 2022.

This year has been a more complicated story, with a Federal Reserve enforcement action over its risk management framework for fintech partnerships and a data breach that exposed customers’ data.

Despite this, Evolve’s story remains exciting, and its leaders say they’re committed to addressing what went wrong and learning from it.

We hope they recover, and the bank can continue to lead in the BaaS space.

It is a good reminder that the ever-evolving tech landscape is full of opportunity, as well as pitfalls.