Never before has the traditional banking sector had as much competition. Tech giants Google and Apple are now encroaching on the finance arena and digital banks abound to compete for customers. As a result, traditional banks are doubling down on technology to meet the rapid and increased demand for digital offerings.
Many banks seeking to meet consumers’ evolving expectations by partnering with fintechs. This gives them a way to quickly – and often less expensively – implement digital capabilities in comparison to building technology in-house. It’s also an example of banks and fintechs working collaboratively and not competitively.
What does a partnership between a bank and fintech company actually look like? FinLedger spoke with a few fintech startups as well as banks below about their partnerships and why the organizations chose to work together.
BankFirst Financial Services & WalletFi
WalletFi has partnered with Mississippi-based BankFirst Financial Services to provide the bank’s customers more visibility into their recurring payments and deliver insights to help the bank boost non-interest income.
Durham, N.C.-based WalletFi has developed a data and analytics platform for community banks, credit unions and fintechs that pinpoints intelligence with recurring payments and delivers insights while also increasing non-interest income, the company says.
Communicating with customers that have recurring charges and relieving the burden of reissued cards and missed payments grew the $1.7 million-asset bank’s interchange income by 6.4 percent from the same period in 2019.
WalletFi Co-Founder and CEO Marc Miller believes that in some cases, people are “more loyal” to recurring payments – or rather the subscriptions they are attached to – than their banks.
“Take somebody’s bank or take their Netflix subscription? I don’t know. It could be a battle,” Miller said. “Netflix might win that. We want to take that same approach and help these community institutions be able to compete on that level, because they understand the data, and they’re focusing on those services that are most important to those customers and members.”
WalletFi has seen impressive growth as of late. The four-year-old startup has added multiple customers over the past 12 months and tripled revenue growth from 2019 to 2020, according to Miller.
“We’re [at] a point where the speed and acceleration of digital, it’s really hard for these smaller institutions, which there are many, to keep up,” Miller said. “Because they may not have in house technology, they rely heavily upon the core providers of their online mobile banking providers. So, partnering with fintechs that can easily spin up services that are relevant that it would take them years to build.”
Progress Bank & Sensibill
Meanwhile, Progress Bank has launched fintech Sensibill’s digital receipt management solution to increase efficiency and improve its customer’s digital experience. Sensibill provides machine and artificial intelligence-powered SKU-level data and tools.
The $1.4 billion-asset bank will use Sensibill’s technology through the FIS Digital One platform, and Progress’ business customers can store receipts from their digital banking app. Progress Bank’s SVP of Operations & Finance Randy Tidwell told FinLedger that driving fast and convenient tools for its customers is important.
“We want to be as quick as we can to turn around and give our customers what they need to either personally bank or commercially bank,” Tidwell said. “We say that we’re utilizing other fintech’s technologies to satisfy those needs of our customers and also our internal customers as well. [If] we see anything that we can do to streamline line processes or give more convenience to the customer, we’ll jump on those items.”
The bank opened in 2008, Tidwell explained, and going forward it will continue to look for Fintech partners to see what’s “best in class.”
When it comes to these kinds of partnerships, Corey Gross, co-founder and CEO of Sensibill said that some banks don’t necessarily want to be stuck with the maintenance of running a new technology when they already have a full plate.
“Banks are in the business of banking, they’re not the business of building compelling cutting edge intellectual property or technology solutions.”
Sensibill raised more than $30 million in its Series B round in 2019. Sensibill was targeting a rollout to more than 10 million users in 2019, and in 2020 it will have rolled out to more than 60 million users, according to Gross.
Bank of Utah & MANTL
Bank of Utah was able to launch a new digital account opening platform powered by bank account opening software company MANTL to help its banking customers have a “faster” online banking experience.
The partnership allows Bank of Utah customers to open the bank’s EZ Checking, a hybrid checking account, iSave savings account and CDs online from their mobile phone in about three minutes.
Bank of Utah chose to partner with MANTL because of how impressed it was with the company’s data analytics approach that enabled this process to be “simpler and easier,” said Mary McBride, Bank of Utah’s AVP Digital Customer Experience & Sales Manager.
“We really appreciate [their] perspective,” McBride said. “And the idea that our partner would be able to guide us based on what they are continually seeing in the market space, so that we’re always evolving along with that.”
Bank of Utah has invested significantly over the past few years in various types of technology to improve its product offering, said Raj Patel, Co-Founder, COO /CFO of MANTL. Essentially, this partnership is just an extension of the digitization the bank has been working on, he said.
MANTL works with banks and credit unions to help them implement their onboarding system that integrates directly with the core banking software. Ultimately, MANTL hopes the partnership is “wildly successful.”
“I think that allowing the bank to open more relationships, grow their business, serve their customers better, those are the things that we care about,” Patel said. “And it just so happens that when you do those things, the bank also grows and becomes even more profitable than it already is.”
Since MANTL was founded in 2016, the fintech has more than doubled each year across revenue, customers and headcount, according to the company. Since March, MANTL has seen deposits grow 300 percent from March to August compared to the same time period in 2019.