What do you do if you’ve built an online lender and you decide you want to offer simple banking services, like a bank account or a debit card? You could try building your own but that’s hard. And expensive.
Or, like MoneyLion and Qapital did, you work with Cambr. Built as a joint venture between StoneCastle Ventures and Q2 Holdings, it’s an end-to-end platform that allows fintech apps to rapidly build and scale banking services. What’s really interesting is that in addition to the banking functionality, Cambr’s platform has a built-in distributed network of over 800 community banks interested in taking deposit money from Cambr clients.
Ahon Sarkar, vice president of product and strategy for Cambr, joins me on the podcast today to discuss why an increasing number of fintechs across the industry want to offer accounts, cards, and payments and how Cambr enables them to scale — scale quickly — and monetize their apps.
The following excerpts were edited for clarity.
How did Cambr come to be?
StoneCastle has been around for about 15 years. Our core business is basically cash storage for a whole host of clients. We have a deposit network of 800 community banks around the U.S. getting low cost deposits from our customers. We were thinking about how to bring this platform to retail customers. When we looked at all the different things needed to create a retail banking solution — core banking technology, a bank license, a whole host of vendors, regulatory — there wasn’t a full-stack solution for customers to do this quickly.
Our CEO is friends with the CEO at Q2, a publicly-traded fintech that serves community banks with technology. It was one of those solutions where 1+1 = 3. We married StoneCastle’s deposit network, Q2’s core processing system called Core Pro, a handful of strategic bank relationships and integrated in everything from KYC to debit card processing with the goal of being the full stack toolkit. With Cambr, you can build innovative financial products while supporting hundreds of community banks nationwide.
Who are Cambr’s clients and how do you help them?
Our target clients are companies looking to build some sort of financial services. We work with fintech firms interested in expanding their products and move their monoline business into another service or expand their experience. We also work with fintechs who have a big pain point. For example, we work with lenders who have gotten really efficient at underwriting and can get a person from application to fully-underwritten in five minutes. But it’s still going to take them five days to get their money. So, we can solve that problem by helping them create a bank account for that person, instantly transfer the funds in, and get them to spend that money off a debit card.
What are PFMs seeing in this market?
PFM’s biggest struggle today is user retention. I have like seven PFMs on my phone, I log in and authenticate, check things out and that’s it. PFMs are financial hubs that don’t let users do anything — so we go to our banking or payment apps. PFMs want to take the unique insights they’ve built for their users and enable these users to act on the insights in real time. Engagement and operational capabilities are the next step for PFMs.
How are fintech firms expanding into new products?
Successful fintech firms have thought a lot about painful experiences for financial customers. Companies like Acorns took these hard experiences and made them easier. Acorns addressed the hard part of choosing an investment portfolio and rebalancing and turned it into “round-up your purchases and we’ll do the rest for you”. With the firm’s new spend card, it’s even more integrated with the rest of banking.
Now, their customers are hungry for more from the experience. Acorns started in the investment space and moved into retirement and spending and now, they’re trying to apply the visualization experience to help customers grow their oaks. It’s unbundling the bank, making customers really happy, and then servicing customers as they want more from their providers.