The Sales Process
You will work directly with the Treasury Prime sales team to find the best matched clients. This section will cover how our sales process generally works, what the handoff and implementation process for the fintech integration looks like, and how banks can best prepare themselves to sign and onboard new fintech clients.Understanding Who You’d Like to Partner With
Every partner bank has different needs and requirements when it comes to the types of fintechs that they want to work with. You may feel comfortable working with emerging industries like crypto and cannabis while others may not; some banks may only want to accommodate transaction-focused companies instead of deposits-focused organizations; and others may only want clients who have reached a certain level of funding while others are just as interested in younger startups. Our sales team will work with you to identify your ideal partner targets.How the Sales Process Works
Our sales team works a sales model focused on client needs which includes getting to know the fintech’s business and addressing gaps with our solutions. We start with a thorough discovery process anchored on understanding the client’s business model and how embedded banking services can drive toward their goals. After building a strong understanding of how our solutions it their needs, we begin the bank introduction process to build relationships and assure a fit. See our templated email below for introductory meetings. Treasury Prime also conducts a complete risk assessment to ensure the partnership starts out on solid footing. Both our finance and legal teams examine crucial data points to understand the financial health of the fintech, such as funding information, path to revenue, industry potential, and more using its own proprietary methodology. Based on the score, additional information may be requested or contract terms adjusted to satisfy all parties. It is important to note that this initial risk assessment is that of Treasury Prime’s and the information will be shared with the bank(s). However, it should never be looked at as a replacement to the bank’s own due diligence and risk assessment process. Our team makes a deliberate effort to match you with fintechs that meet the criteria you’ve set. That said, we may also find some fintechs that meet most, but not all, of your parameters. It’s important to make clear to our sales team what your threshold is and how flexible you’re willing to be on the variables.Sales and Bank Alignment Meeting
Once we have a solid understanding of the types of fintech deals you are interested in, there will be an alignment meeting to kick off the partnership. During this meeting, we will share information about the kinds of demand that we’re seeing from fintechs who are looking for bank partners, as well as the types of fintechs that are approaching us. We will also go over the lead sharing process. Leads will be delivered to you as they come up and after we’ve done the preliminary vetting. The leads will be delivered in a digestible format with key facts and data points. Here is a mockup of what our sales team might send you about a potential new client:Introductory Meeting with Fintechs
As our sales team identifies suitable fintech prospects, we will send a digest of fintech opportunities that meet your criteria for review. If you think that a prospect is a good fit, we’ll schedule an introductory meeting with all three parties. During this call, we can all get a better understanding of the needs of the fintech, what financial services and products they’re interested in using, what third-party vendors they want to use, and more. Aligning on these details will allow our sales team to get started on filling out our Letter of Intent (LOI). All offerings, costs, stipulations and other specifics are detailed in the tri-party non-binding Letter of Intent (LOI) between Treasury Prime, the bank, and the fintech client. While the LOI is not a legally binding document, it allows all parties to align on key business and economic terms. To that end, Treasury Prime and the Bank will each also sign separate Master Service Agreements (MSAs) with the fintech. Treasury Prime’s MSA will include the technical products provided, fees, and additional terms and conditions for using the APIs. For the Bank’s MSA you can see an example template below. Once necessary agreements are signed and the implementation fee has been paid to Treasury Prime, the fintech can begin the implementation process. More on the LOI and the implementation process below. As you become more experienced with standing up and operating fintech partnerships, you may feel comfortable enough to start closing fintech client deals on your own. Throughout the fintech sales process, we will provide training and resources to prepare you for finding and signing on your own fintechs independently. Generally, the cadence of meetings and/or communications with us to discuss the pipeline of prospective fintech and enterprise deals will be specific to you. Some banks prefer to have meetings more often than others and some would prefer to communicate asynchronously via email. Please let us know what your preference is and we’ll do our best to accommodate.Best Practices As a Bank Partner
Here are some key best practices that will ensure smooth working relationships and assist us in driving business to you as quickly as possible:- Provide a primary point of contact: Fintechs want to know that they’ll be working with an active bank partner that is genuinely invested in the relationship. We recommend designating one or two members of your team to be the main contact(s) to provide feedback, accept, or deny these deals.
- This point of contact should be prepared to act as an extension of the Treasury Prime sales team by attending calls to answer questions about use cases, capabilities, opportunities and more. Potential partnerships with fintechs can be competitive. This member should sell the opportunity and articulate how your bank can help them achieve their goals. This helps to connect the dots and assure the prospect that their desired outcome can be achieved.
- This point of contact should also have intimate knowledge of how their bank operates, why the fintech could be a strong fit, and what value a partnership with Treasury Prime brings.
- Ensure speed and responsiveness: We can only work as quickly as we hear from you. To ensure that we are moving as fast and as efficiently as possible, we strongly recommend agreeing upon a 24-hour response time when you receive information about a potential fintech client. We are happy to work with you to figure out the best way to facilitate a decision on the fintech within the recommended three business day window.
- Facilitate open communication: We understand that things can change quickly. Please keep us informed with any new developments, changes, etc. that arise so that we can make any adjustments as needed.
- Clarify due diligence requirements: Due diligence is a very important part of the implementation process for fintechs. However, due diligence from every bank will look different. To ensure that our fintechs are prepared and know what due diligence tests and documentation they may need to get ready, please let us know what you’ll be requiring — particularly if it’s something that may be time-intensive o procure or may not be a common component of due diligence.
- Utilize a scheduling tool: Just as transparency is key, access to you is vital as well. To ensure that we are moving as quickly as possible, being able to schedule time on your calendar without having to send an email or hop on a call can make things a whole lot easier. We suggest looking into a tool like Calendly which would allow us to book meetings (such as fintech intros) when you’re available.
- Level-set your expectations: There will be fintechs that come into our pipeline that may not fit every part of your criteria, but may still be a good fit. It’s also important to understand that it’s great to start off slow. Getting started with BaaS can be exciting and it may be a natural instinct to want to land a huge fintech right off the bat. However, BaaS relationships have a learning curve and we recommend starting off conservatively until you’ve gained practical hands-on experience with implementing an embedded banking program.
- Agree on a standardized LOI: A letter of intent (LOI) is a crucial first step to onboarding a fintech, and it can also be a source of friction if a finalized LOI has not been agreed upon at the outset. Attempting to construct and modify an LOI in the midst of closing a deal can cause unnecessary delays and headaches.
- Before meeting with your first fintech, we will work with you to develop a standard tri-party LOI template that can be easily modified to the specific needs of your various fintech clients. Please see an example of our Template LOI that can have information easily plugged into the highlighted portions as needed.
- Let us know what you want to know: To save time and maximize efficiency, it’s important that you outline the key facts you want to know about prospective fintech clients right off the bat.
- What are the most important details that you want to learn about the fintechs we bring to you? Which factors will help you make a decision and provide feedback within 24 hours?
- Your answers will empower our sales team to ask all of the right questions and ascertain whether a fintech client will meet your requirements.
The Implementation Process
Implementation Kickoff
Congrats, you’ve identified a fintech or enterprise that fits the bill and you’re ready to get to work! Here is generally how the implementation process typically looks for banks onboarding a new fintech.- Vetting and accepting: Once aligned, the fintech will need to sign a Letter of Intent (LOI) and Master Service Agreement (MSA) with Treasury Prime.
- Due diligence: Bank partners will be responsible for giving a due diligence checklist to the fintech. The due diligence will need to be led by the bank partner to ensure that the fintech is meeting security and compliance standards. The Treasury Prime team will help facilitate the process by keeping lines of communication open between all parties. Once due diligence is completed, an LOI and MSA will need to be signed by the bank partner and fintech to allow the implementation process to progress.
- Note: It’s important to keep the momentum going and stick to the timeline at this stage
- Kickoff call: The goal of the kickoff call is to go over the scope of the bank fintech relationship, set expectations, determine next steps for products and services being launched. It’s common for both parties to bring a technical member or project management member to their team. After this call, weekly implementation check-ins will be scheduled between all three parties to ensure that the implementation process is going smoothly and that every stakeholder is aware of what next steps are. These on-going calls are important to maintaining a strong and clear line of communication among all involved. Important topics will be covered during these regular calls such as cut-off times and limits for different payment rails like ACH and wires.
- Note: The kickoff call often occurs before the completion of the due diligence process.
Successful Integrations Best Practices
Treasury Prime works with a deep bench of top-tier third-party partners to power different services like KYC/KYB, transaction and fraud monitoring, card issuing, check issuing, ATM access, and more. Fintechs who choose to work with our partner vendors must also go through due diligence and in certain instances sign agreements with them as well. The bank will have visibility into this process to ensure that every party has an understanding of how the fintech and its partner providers will operate. The expected duration of the implementation can vary depending on the services the fintech is requiring. A fintech wanting to offer just account opening to its end users can get to market faster than one that wants to issue cards, which is a more complex process that requires more documentation and outside parties (i.e. card network). While the Treasury Prime team has chosen some of the top companies in their respective industries, we understand that some fintechs may feel more comfortable with their own vendors. In this case, the Treasury Prime team will work with the fintech to streamline and facilitate the due diligence process. Using third-party vendors outside of the Treasury Prime ecosystem can extend the timeline of implementation. Again, before any agreements are signed, the fintech and bank should be aligned on which partners — Treasury Prime’s or otherwise — are being used by the fintech.Building and Testing
After the kickoff call, the fintech or enterprise will start to build out the necessary platform or interface to provide their end-users with embedded banking products and services in conjunction with the partner bank. Fintechs will open accounts with the bank including operational accounts, settlement accounts, loss reserve accounts, and any others that may be specific to a fintech’s operations. Treasury Prime will provide the fintech with access to our production and testing environments to begin building and testing. The fintech will also want to test crucial functionalities like money movement between accounts, testing payment rails, issuing test cards, debit card funding, etc. While the bank will not have an active role in product development for the fintech, they may need to work collaboratively with the fintech to test different features and capabilities. Again, there’s no standard timing at this stage of implementation as fintechs will have variable amounts of resources and differing levels of complexity that go into their platforms or products. This is why maintaining weekly check-ins is important to best understand the progress of implementation.Implementation FAQ
- How long does it take to implement a fintech?
- The implementation timeline is largely dependent on a variety of factors, such as how responsive and how fast a fintech company can move, what partners they’re looking to work with, or the complexity of the financial services and products it is looking to offer their end users.
- In general, we have seen that most fintechs can successfully integrate with their bank partner within two to three months.
- Can a partner bank implement more than one fintech at a time?
- Yes! More than one fintech can be implemented simultaneously, and in fact we recommend it. Since the project plan for implementation is typically similar across different fintechs, it can be more efficient to run the implementation process in parallel for multiple fintechs and enterprises.
- How does a partner bank communicate with a fintech client?
- It is best practice that the bank partner or fintech include Treasury Prime on any communication, even if it is a direct question between the bank and fintech. Having a transparent channel of communication ensures that all parties understand any present situation and can react accordingly.
- We also advise our bank partners and fintech customers to refrain from sharing sensitive information on an unsecured or unencrypted channel. For general questions or concerns, a dedicated Slack channel, email, phone call, or meeting are great ways to get in touch as long as every party has visibility. The preferred method of communication will be established ahead of implementation.
- What happens if a fintech wants to leave a partner bank or switch to a new one?
- Whether a bank or a fintech are looking to part ways (which we have found to be a very uncommon request), the Treasury Prime team will work with the fintech to find a suitable new bank partner or partners to the extent possible. Once identified, the implementation process would begin while the fintech is still attached to its existing bank partner to avoid any interruptions in service to their customers.
- Once the implementation process is finished with the new bank partner or partners, the Treasury Prime implementation manager will facilitate a wind-down process.
- Is there any added cost to the partner bank to implement a fintech?
- Any costs associated with integrating with new partner fintechs will have been determined during the sales process and included in the signed LOI and MSA agreements. However, there is no implementation cost passed onto the bank, only to the fintech itself.
Onboarding and Compliance
Once implementation with Treasury Prime is complete, you’re now ready to begin onboarding fintech and enterprise clients. Just as with the implementation process, Treasury Prime will be your partner in onboarding your fintechs via a dedicated implementation manager. At Treasury Prime, we firmly believe in the importance of compliance and will support our bank partners in ensuring that the entire onboarding and implementation process with their fintech and enterprise clients is compliant and safe. To allow the fintech onboarding process to run smoothly, please take a look below to get an understanding of what the onboarding process is like and what you should be prepared to do.Vendor and Partner Due Diligence Programs and Checklists
Generally every fintech’s onboarding should begin with due diligence, which ensures that both the bank and fintech partners are the right fit for one another, and helps to build confidence in their working relationship. Below, we’ve put together checklists that can be used to guide the due diligence process for prospective fintech and enterprise clients.Risk Assessment Checklist
Compliance must be customized to the fintech’s specific risk profile. A proprietary risk assessment developed by the Treasury Prime team will be used to determine how banks and regulators will gauge a fintech’s potential level of risk. The output of that will be a risk score, which we’ll use to help the fintech build a compliance program customized to their business needs. It is important to note this is done by Treasury Prime to help assist fintechs build a safe and compliant program. It is the bank’s responsibility to review and ultimately sign off on the fintech’s processes and programs. Here are the steps:- Conduct risk assessment
- Create risk profile
- Walk through risk score
- Compliance program scope recommendations
Due Diligence Checklist
Second, we’ll guide the fintech through the bank’s due diligence requirements. Below are a list of documents that we may require fintechs to produce to complete due diligence. We’ve integrated with a vendor to provide varying levels of support with drafting and implementing policies as well as overall governance. These policies may include:- Information security policy/data & Security policy
- AML policy
- Complaint management policy
- Vendor management policy
- Business continuity/disaster plan
- Recovery Plan
- ECOA policy
- TILA policy/disclosures
- FCRA/FDCPA policy
- Review proof of authorization language
Customer Communications
As part of the bank due diligence and approval process, fintechs will make sure that their direct customer-facing content like marketing materials, promotion materials, and website content are visible to you for approval. Treasury Prime will work with you to facilitate a bank review and approval, as well as ensure that all required customer communications are in place. The Compliance Toolkit, comprising items such as the Policies and Procedures Checklist, is a valuable resource available to you during this process. The steps are as follows:- Facilitate bank review of agreements
- Bank review of application and website
- Terms of service
- Deposit agreements
- Bank Secrecy Act (BSA) /Anti Money Laundering (AML) regulatory compliance
Risk Assessment, KYC/KYB, and Transaction Monitoring Programs
At this point, you should have already determined your KYC/KYB and transaction monitoring vendors. As a reminder, Treasury Prime has several key partnerships with best-in-class RegTech (regulatory technology for managing compliance in the financial space) platforms for KYC/KYB and transaction monitoring. Bank partners can either integrate with those platforms, or use a third-party vendor of their own choosing. Treasury Prime will initiate a dialogue between fintechs and the partner bank to align on transaction monitoring requirements. To smooth the process, we have integrated with well-known vendors with tools designed specifically for fintechs and banks. Some bank partners will prefer to conduct all of the transaction monitoring itself through its primary tool while others will create a role for fintechs to perform a first level review for certain types of transactions. Treasury Prime’s platform supports both of these approaches.Risk Assessment and Automated Assurance
In addition to KYC and transaction monitoring solutions, Treasury Prime has expanded its partnership ecosystem to include all-in-one effectiveness testing platform options. This platform supports banks in maintaining a uniform risk profile and appetite across their lines of business, including both core and FBO accounts through BaaS. It offers real-time risk assessments by providing a comprehensive overview of all fintech programs.Our partners in this category enable banks to:- Identify any compliance systems that may not be functioning as expected
- Examine where onboarding rules may not be applied correctly
- Undertake a thorough and efficient quality assurance review of all fintech regulatory programs
- Generate reports on regulatory criteria directly
KYC/KYB and AML
Through strategic partnerships, Treasury Prime can offer banks a comprehensive suite of compliance and identity management solutions that meet all KYC & Anti-Money Laundering (AML) regulations via a single API connection. Banks have the flexibility to opt for a different third-party KYC/KYB outside of Treasury Prime’s platform if they wish. Here is a sample application workflow with Alloy, one of our KYC partners:
Here’s the overall application flow for a fintech on a ledger account using a third party KYC/KYB provider:
Transaction and Fraud Monitoring
Our selection of partners provides industry-leading transaction and fraud monitoring. These partners are designed with bank-fintech collaborations in mind, enabling alerts collaboration and permitting banks to delegate level one review of certain types of transactions to the extent it so chooses. They also offer:- Real-time rule testing to prevent alert backlogs.
- Daily data delivery ensures regular transaction activity monitoring and collaboration in case of suspicious activities.
- Investigative alert capabilities are also provided, enabling quick issue resolution. While banks can delegate first-level alert resolutions to fintechs, they maintain complete visibility into all underlying activities.
Best Practices — Regulatory Communications
Part of a compliant bank-fintech relationship is how the fintech markets its services and discloses who their bank partner is. While this should be covered during the onboarding process, not all fintech and enterprise clients may be privy to what best practices are when it comes to legal disclosures, terms, etc. The Treasury Prime team has put together a general resource guide below to assist fintechs on how to best structure their website and apps and provide any needed materials to our bank partners for full transparency in their working relationship. It is important that banks work in concert with their fintech partners to confirm what disclosures must go live before embarking on their partnership.Disclosing a Bank Partner
Here are general recommendations we make to any potential fintechs looking to use you as a bank partner. These recommendations will help prevent unnecessary risk for both the fintech and the bank partner and:- Ensure that customers know that a partner bank is powering the fintech’s banking products
- If offering deposit products, the deposit agreement, app, and website copy should reflect that deposit products are provided by a partner bank.
- For example: Bank services are provided by XYZ Bank, Member FDIC.
- If the fintech has “bank” or “banking” in the name of the organization or product offering, it is especially important to make it clear to customers that the fintech has a bank partner.
Advertising and Marketing Disclosures
- To make certain that a promotion or marketing message will not mislead consumers, fintechs must ensure that any representations like “no fees”, “no hidden costs”, or “bonus earned” are indeed accurate.
- Reg DD provides guidance on the usage of these types of advertising terms.
- The disclosures need to be repeated frequently to ensure that the consumer is fully aware of the terms.
Product Specific Disclosures
- For savings accounts, a financial institution needs to disclose the interest paid on the accounts.
- For overdraft services, financial institutions must disclose any associated fees.
- For features like mobile deposits, a financial institution must disclose how and when funds become available.
- Debit card products require specific disclosures regarding fees and errors. This may come into play in the case of a potentially unauthorized card or ACH transaction.
- Similarly, credit products have different disclosures depending on the type of loan at issue.
Readiness: Key Takeaways and Documents
Key Takeaways
- The relationship between the bank and the fintech is the heart of the partnership.
- Being responsive and flexible during the fintech sales will increase the bank’s pipeline and accelerate conversions.
- Some fintechs may have limited knowledge of the required policies and procedures. Meeting them where they are and setting expectations of launch plans is integral to the relationship.
- Banks need to work with fintech partners to ensure compliance measures are implemented correctly.