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Secrets to successful bank and FinTech partnerships for credit and deposits
Journal of Digital Banking,
8
(4),
304-312
(2024)
Abstract
This paper aims to provide a road map to a successful long-term partnership between traditional financial institutions (FIs) like banks and credit unions with a financial technology (FinTech) platform. This is a summary of lessons learned from developing and launching over 200 bank/credit union partnerships with a FinTech lending platform. Drawing on experience with financial institutions of all shapes and sizes, this paper details best practices to create a scalable way of providing custom solutions to the problems faced by the modern depository institution. This includes a particular focus on lending/ credit products, and how the effect of FI and FinTech lending programmes can add value while mitigating risk. The paper focuses on depositories domiciled in the USA and the American banking system’s regulatory environment, but many of its themes will be applicable to international organisations.
Keywords: FinTech/bank partnerships; digital lending; FinTech; neo-banks; deposits; liquidity solutions
The full article is available to subscribers to the journal.
Author's Biography
Rebecca Bacon leads Upgrade’s financial institutions team nationally. An experienced FinTech executive, she covers all bank and credit union partnerships at Upgrade. Rebecca has worked closely with a variety of regulated financial institutions (FIs) from banks/credit unions as small as US$30m to as large as US$200bn. She has developed custom forward flow programmes across a variety of consumer asset classes, unsecured personal instalment loans, cards, autos and home improvement. In her time at Upgrade, Rebecca has developed flow programmes with over 200 FIs in the USA, far exceeding any marketplace lending platform in history. Most recently, Rebecca and her team have begun offering their over 200 flow partners deposit/liquidity solutions, creating match funding solutions for FIs with deposit pressure. Prior to Upgrade, Rebecca was with another marketplace lending platform, where she covered capital markets for personal unsecured loans, warehouse facilities, ABS securitisations, structured pass-through securities as well as FI flow programmes. Prior to entering the FinTech space, Rebecca was in investment banking with Bank of America Merrill Lynch and before that in securities lending at Goldman Sachs in the UK. In 2023, Rebecca was named to the FT Partners Women in FinTech Rising Star list. She also advises a pre-seed B2B FinTech HELOC start-up. Rebecca has been a subject matter expert speaker on ‘Credit Union Conversations’, Talking Liquidity and FinTech’s episode as well as the new podcast ‘FinTech Cowboys’ in the Rebecca Bacon episode. Based in San Francisco, California, and originally from Hartford, Connecticut, USA, Rebecca holds a Bachelor of Science in Business Administration from Northeastern University and FINRA licences Series 7, 63 and 52.
