Written by PYMNTS.com, July 31, 2023
“This partnership addresses the increasing demand for flexible and scalable solutions that effectively meet the evolving needs of businesses and customers,” the companies said in a news release Monday (July 31).
The goal of the collaboration is to give businesses “seamless” access to Academy Bank’s deposit services, letting them offer customers FDIC-insured accounts while complying with regulatory requirements.
The companies say Treasury Prime’s banking-as-a-service (BaaS) platform, combined with Academy Bank’s established banking infrastructure, will let businesses rapidly launch and scale their payment and deposit products, and improve customer engagement and retention.
“Academy Bank’s ability to service deposit customers in a highly personalized manner, combined with their unwavering commitment to innovation, forms a strong foundation for our partnership,” said Jeff Nowicki, vice president of banking at Treasury Prime.
The release notes that Treasury Prime has been “rapidly” expanding its bank network, which now includes more than 15 financial institutions around the U.S. This latest venture comes amid rising interest in embedded finance.
“Embedded finance would not be possible if not for banking-as-a-service, a fee-based model that allows nonfinancial companies to offer financial services to their end users by connecting directly with banks’ systems using application programming interfaces (APIs),” PYMNTS wrote earlier this year.
This connection allows third parties to leverage banks’ licenses to create banking products and services, which they can then present to customers or offer as white-label solutions to other companies.
“Through the use of APIs, BaaS platforms provide the necessary infrastructure for companies to become financial service providers in a quick, cost-effective way. Such a system benefits everyone involved, from the banks to the businesses to the consumers being served,” that report said.
And in an interview with PYMNTS earlier this year, Treasury Prime’s Nowicki said BaaS lets smaller banks broaden their revenue streams without having to invest in creating new digital front-end and onboarding initiatives from scratch.
He also projected the BaaS will continue to grow this year, as businesses employ it to create and provide checking accounts and business accounts in a variety of nonfinancial channels.
“[This model] offers a flawless integration … and so a community bank should not be worried that a top-15 bank is coming in to ‘eat their lunch,’” he said. “There’s opportunities on the table in which everyone can participate.”