Last year, we really saw the emergence of deep partnerships between banks and fintechs.
Collaboration plays to the strengths of incumbent financial institutions, tapping into a bank’s institutional knowledge, experience, and know-how of managing customers. It also plays to the strengths of fintech firms, unleashing the power of technology, creativity, and focus on achieving scale.
The 2020 winners of the Tearsheet Bank / Fintech Partnership Awards
This year's Tearsheet's Bank/Fintech Partnership Awards explored this trend of deepening collaboration between incumbents and upstarts. We received almost 100 submissions from some of the top financial institutions in the world -- to identify the best and most creative partnerships that create value beyond the sum of the parts, that move the needle beyond just PR releases and marketing pitches.
Our judges sized the entries on four attributes: creativity, innovative thinking, customer value and results.
Thank you to all the organizations that applied for this award program -- stay tuned as we're planning on turning the great entries we received into an exclusive Tearsheet guide on what's state-of-the-art in bank/fintech partnerships in 2020.
Grand Prize Winner
Sutton Bank and Marqeta: How a Silicon Valley disruptor and a rural Ohio bank teamed up to revolutionize payments technology
Marqeta, founded in 2010, took the complicated card issuing industry apart and re-architected it, with a new platform built using open APIs. Sutton Bank, a small town bank from rural Ohio, was founded in 1878 with eight branches serving a mostly rural population.
Sutton has become a key part of Marqeta’s success, as issued cards require backing by an FDIC-insured issuing bank. While more commonplace today, in 2011, this type of bank-fintech partnership wasn't the norm.
KPIs: Over the past nine years, as Marqeta has grown into a payments unicorn serving some of the world’s largest companies, Sutton Bank has become closely integrated with the Marqeta platform.
- When Sutton Bank and Marqeta first began working together Sutton’s prepaid business was in its infancy.
- Prepaid cards, like those it powers with Marqeta, now account for 85 percent of its volume.
- The 2019 Nilson Report listed Sutton Bank as one of the largest issuers in the country, issuing 9.4 million cards, powering 73 million transactions and powering $3.2 billion in spending.
Read more: Marqeta — The rising king of card issuance infrastructure, How trying to load a bunch of Groupons on a debit card turned into the next payments unicorn
Customer Journey Winner
Mastercard and Signzy: The Mastercard Global Acceptance Solutions & Signzy Partnership
Mastercard partnered with Signzy to deliver and commercialize a sophisticated yet simple merchant onboarding solution that quickly integrates with acquirers’ current operations.
The unique capabilities of each partner service their customers in a way that neither partner could do alone. SMBs face significant onboarding challenges to accept electronic payments. Friction points in the merchant acquisition process like manual data collection & limited data availability for KYC cause a snowball effect that limit consumer payment choices, affecting merchant sales and consumer experience.
Following their participation in Mastercard's Start Path accelerator program, Signzy partnered with Mastercard to offer an onboarding solution that easily integrates with acquirers’ operations. There's demand for merchant onboarding, and Mastercard and Signzy offer a single API-based solution that is customizable while still managing the regulatory and risk requirements for acquirers.
KPIs: This partnership enabled Signzy to scale quickly through access to Mastercard’s network.
- The Mastercard-Signzy relationship decreased the cost of merchant onboarding by 80 percent and reduced the time of onboarding by 75 percent.
- It also increased acquirer sales efficiency by 3x.
Read more: Tearsheet's Best Innovation Program 2020: Mastercard’s Start Path, Mastercard's Michael Miebach: Collaboration and partnerships are essential to spark innovation
Digital Transformation Winner
Midwest BankCentre and Mantl: Mantl powers seamless digital account opening for Midwest BankCentre
Midwest BankCentre set out to create a digital-only brand, Rising Bank, to enter digital banking and explore best practices. Knowing that digital account opening is the first step of the customer journey and critical to the initiative's success, the bank chose to work with MANTL to fully digitize the account opening flow.
Working with MANTL and a few other vendors, the bank was able to deploy an entirely new digital branch in just six months. MANTL's platform enabled Rising to hit its one-year deposit raising goal of $100 million in just five months -- the equivalent to opening 10 new branches. This initiative, Midwest BankCentre's largest undertaking in recent history, eliminated the bank's dependency on wholesale funding, reached a new client demographic, and raised enough funds to significantly grow lending.
MANTL and Midwest BankCentre are now exploring adding new services to Rising Bank and to bring similar efficiencies to the bank's 17 physical branches.
KPIs: The partnership strengthened the bank's balance sheet with additional core deposits.
- Midwest BankCentre gathered 75 percent of its deposit goal within ten weeks and raised over $100 million in just five months.
- This channel requires 10 percent or less of the staffing of a physical branch.
CFO's Choice Award
AvidXchange and KeyBank: KeyBank customers are the real winners of the AvidXchange partnership
Through its nearly five-year partnership with AvidXchange, KeyBank has worked with KeyBank customers to automate their invoice and payment processes.
In 2015, AvidXchange formed a partnership with KeyBank to help modernize accounts payable operations for KeyBank customers. With this partnership, KeyBank offers a seamless customer experience by integrating AvidXchange’s core products into the KeyBank platform.
Using AvidPay as KeyTotal Pay, KeyBank customers can access the AvidPay Network of 500,000 suppliers. With the implementation, KeyBank customers have more control, flexible payment options and can pay vendors securely, on time and in their preferred payment method.
AvidInvoice, or KeyTotal Invoice, automates the receiving, tracking & approving of invoices. By eliminating paper & reducing manual data entry, customers see fewer errors and save time for AP teams.
KPIs: The success of the partnership stems from a collaborative go-to-market strategy and delivery of customer resources to educate on the overall benefits of automation.
- In 2019, AvidXchange and KeyBank saw continued growth in new clients, and increase in payments sold and e-payment spend volume.
Read more: ‘We want to figure out what they’re doing differently’: Why KeyBank acquired millennial lender Laurel Road
J.P. Morgan and FISPAN: Treasury Ignition – powered by the J.P. Morgan and FISPAN partnership
J.P. Morgan launched Treasury Ignition through its partnership with FISPAN, bringing a comprehensive set of J.P. Morgan capabilities directly to its clients’ Enterprise Resource Planning systems.
Through its partnership with FISPAN, J.P. Morgan has been able to quickly deliver a solution to enable its clients to access J.P. Morgan products and services directly within their ERP systems.
When the bank decided to pursue this solution with FISPAN, it kicked off a proof of concept to design the product and solicit client feedback. They worked together to integrate client feedback into the initial pilot product that launched in July 2018.
The success of the partnership relies on a shared passion and excitement for bringing a contextual banking experience to clients and the ability to continually iterate. The firms have since launched additional features and functionality based on client feedback and have partnered to build a roadmap and shared vision. According to J.P. Morgan, FISPAN has been a true partner throughout the many waves of development and has done a great job at accommodating the complexity of the back office of a large global bank like J.P. Morgan.
Read more: FISPAN’s Lisa Shields on why ERPs are the banking channel of the future for businesses
Bank of America and Zelle: Zelle and Bank of America partner to make 'Everyday Better' for millions of consumers
With a partnership that took to the basketball court and transformed bank branches nationwide, Zelle and Bank of America showed consumers how digital payments could make their everyday lives better – and nearly doubled transaction volumes in the process.
Digital payments make it fast, safe and easy to send money. But Bank of America and Zelle noticed that some customers were slow to adopt this new payment method. In some cases, awareness was an issue, while others used the service only once or sporadically.
KPIs: Throughout 2019, they worked together to help retail and business customers nationwide discover how digital payments could make their financial interactions fast, safe and easy.
- p2p payments grew through Zelle by Bank of America customers from 51.6 million in 4Q 2018 to 95 million in 4Q 2019 – nearly doubling the payment volume in only a year.
Read more: Zelle’s Melissa Lowry: ‘Beyond awareness, we’re trying to show how we make everyday better’, How banks are promoting Zelle
Social Impact Award
Wells Fargo and The Climate Service: Fintech on a Mission: Wells Fargo and the Climate Service assess climate risks
Through its Startup Accelerator program, Wells Fargo is working with The Climate Service to measure, monitor and manage financial risks and opportunities related to climate change.
In September of 2019, the Wells Fargo Startup Accelerator invested in The Climate Service, an Asheville, NC-based startup that specializes in providing climate analytics to financial services organizations. Since then, the two organizations have been working together to explore how climate data can be used in the evolution of a number of financial products and services.
The Climate Service’s Climanomics Risk Analytics Platform puts a price on climate risk to help organizations manage exposure, build resilience, and drive change. Through their partnership, Wells Fargo and The Climate Service are applying the Climanomics Platform to help one of the largest cities in the United States assess the impact of climate change on its affordable housing resources. As the world transitions to a low-carbon economy, Wells Fargo is looking at new ways to embed fundamental principles of sustainability into how it operates.