Sutton Bank, BHB Announce Banking-as-a-Service Association

With the FinTech sector continuing to grow at a rapid pace, numerous startups have turned to FDIC-insured banks to help power their platforms. These types of partnerships have since become known as “banking as a service,” with the licensed institutions being known as BaaS Banks. Now, one such bank is helping create an association to help support like-minded institutions.

Sutton Bank and Bankers Helping Bankers have announced the launch of the BaaS Association. According to the site, the organization will advocate for the responsible delivery of banking-as-a-service and will promote best practices. To do this, the group will also aim to work closely with regulators in order to help standardize compliance. Additionally, the Association plans to help connect licensed institutions with non-bank startups seeking partners.

At this time, the BaaS Association will offer two membership types: Members and Affiliate Members. The former is for existing BaaS banks and includes a private chat board, representation to state and federal regulators, access to online events, and voting rights. Meanwhile, Affiliate Memberships are available for institutions looking to become Baas Banks, as well as FinTechs and vendors. These Affiliate Members will also have representation to regulators, will be able to access special online events, and more. Those interested in joining can find sign-up information on the BaaS Association website.

Boasting “Old-Fashioned Innovation,” Sutton Bank is one of the most popular partner banks for FinTech startups. Currently, the bank works with the Bitcoin rewards app Fold, the all-in-one digital banking platform Revolut, and the ever-popular Cash App, among others. Meanwhile, some of the other most-active partner banks in the sector include Cross River — which just raised a $620 million Series D — Metropolitan Commercial Bank, NBKC, and many more.

Announcing the Association and the need for it, Sutton Bank’s SVP and Chief Payments Officer Robert Keil stated, “Community banking is experiencing a number of challenges. Banking-as-a-Service is one offering that enables banks to generate alternative revenue and predictable fee income.” Keil continued, “Furthermore, by partnering with select FinTech organizations, smaller community banks are able to offer banking services to large numbers of the unbanked and underbanked population. Having an association for banks active in this space will only help to continue the momentum and further strengthen consumers and community banking alike.”

Similarly, Bankers Helping Bankers co-founder Tanner Mayo said in a statement, “BaaS banks are mostly community banks, a few are larger, but one thing they have in common is that they are the top earning banks in the United States. The BHB BaaS Association is representing the greatest hope in a generation for the future of community banking, embracing new technologies and new diverse products that are more inclusive for all.”

With the backing of Sutton and BHB, it will be interesting to see whether the BaaS Association can rally other popular banks as well as FinTechs to work together. If so, the association could well prove to be a useful resource for new startups that encounter an occasionally ambiguous regulatory landscape. Hopefully, by working together, the BaaS Association can help the banking-as-a-service practice grow in the years ahead.

Leave a Reply

Your email address will not be published.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Gas Prices Reach New Record Highs Ahead of Memorial Day Holiday

With the Memorial Day holiday weekend ahead, motorists are likely to be paying more to fill their tanks. According to the latest figures from GasBuddy, average gas prices hit new record highs this past week — marking the fifth week in a row that prices have climbed. The app's data (collected from more than 150,000 stations across the country) show an average price of $4.57 per gallon, which is up 11¢ from...

Progressive Announces "Driving Small Business Forward" Grant Program

Small business owners hoping to add some wheels to their operation may have a chance to do so thanks to a newly-announced grant opportunity. The well-known insurance provider Progressive has announced the launch of its Driving Small Business Forward grant program. Partnering with the accelerator Hello Alice, this program is specifically aimed at Hispanic entrepreneurs and will include 10 $25,000 grant winners. These funds can then be used toward the...

Banking-as-a-Service Platform Unit Raises $100 Million

Put another tally mark on FinTech "megadeal" board for 2022. This week, Unit announced that it had closed a $100 million round. The Series C was led by Insight Partners. Existing investors such as Accel, Better Tomorrow Ventures, and Flourish Ventures also participated along with newcomers Moving Capital and Stepstone. Notably, the round valued the company at $1.2 billion, earning it "unicorn" status. To date, Unit has now raised a...