Unlocking New Market Opportunities
In 2015 Coastal Community Bank, a Washington-based bank met with external consultants to evaluate their strengths and uncover potential opportunities that could help increase their market share and augment their traditional banking business. The consultants identified the areas of operations and compliance to be key critical requirements within the FinTech space and a primary opportunity for CCB to capitalize on based on their expertise. The traditional, community-focused bank made the decision to capitalize on this gap in the market and unveiled a new division of their business called CCBX - focused primarily on Banking-as-a-Service and delivering seamless financial services to their clients with a wide range of solutions including marketing, reconciliation, and others.
Understanding the Challenges of BaaS
As an early adopter, Coastal had considerable success standing up and managing its BaaS strategy. The community bank received an overwhelmingly positive response from the FinTech community and has scaled its FinTech partnerships to 27 since launching in 2015.
Throughout their journey, the Coastal team discovered that the BaaS model, although highly beneficial, came with its own set of challenges. Managing the program internally required intensive administrative support from the various workstreams across payments, operations, audit, and compliance. The manual nature of the program became labor-intensive for the team and ultimately they knew they would need to leverage technology to scale in the long run.
With this understanding in mind, the team went out on the hunt to find the right partner.
Partnering for Scale
Coastal turned to Synctera as a strategic partner to help reduce any inefficiencies and scale their BaaS program. The partnership allowed Coastal to leverage Synctera’s FinTech-as-a-Service (FaaS) platform, enabling Coastal and their FinTech partners to effectively manage the operational and compliance aspects of the partnership that were otherwise a manual process.
The security, regulatory, and administrative burdens can be easily managed, and services such as KYC, AML, card management, fraud protection, ledger, and other capabilities will be available to all of the bank’s FinTech partners. The Synctera platform will streamline and automate most workflows and will increase communications and visibility across all parties, with a traceable audit trail for regulators.
“When we originally started working with FinTechs, we quickly realized that amount of backend work needed to manage our relationships was intensive,” said Sprink. “Synctera has allowed us to focus our energy on serving our core market by helping us with partner management.”
What’s Next for Coastal?
Coastal continues to build new FinTech partnerships and has no intention of slowing down. The team continues to partner with Synctera to identify new ways to leverage the FaaS platform and onboard more FinTechs. More FinTech partnerships are in the works and CCB has launched a digital banking division called CCDB to help prepare the bank for future planned partnerships with other technology companies.
“By launching with Synctera, we’re expecting to be able to continue our growth of the number of FinTech companies we can take on.” Eric Sprink, President and CEO, Coastal Community Bank.
If you’re interested in partnering with a community bank or FinTech, contact us to schedule a time to chat.
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