What is the bank’s FinTech / BaaS program?
The bank partners with a limited number of FinTech companies to provide regulated banking services through a segregated platform that operates independently from the bank’s traditional core system. The program is designed to generate fee-based income while maintaining conservative risk controls, strong compliance oversight, and disciplined growth. Each FinTech relationship is evaluated individually, and participation is limited to businesses whose models, controls, and financial condition align with the bank’s risk appetite.
How are FinTech partners selected and approved?
Prospective FinTech partners undergo a multi-stage review process that includes business model assessment, projected transaction volumes, financial condition, and operational capabilities. Formal due diligence includes review of audited financials, SOC reports, BSA/AML programs, and independent compliance audits. Approval requires internal review and governance oversight, and a significant percentage of applicants are declined based on risk, complexity, or control considerations.
How does the bank manage AML, fraud, and transaction risk?
The bank employs layered controls that include transaction monitoring technology, adverse media and sanctions screening, and daily alert review by dedicated compliance staff. Transactions that raise questions are subject to formal requests for information and escalation procedures. If sufficient information is not provided, or if activity is inconsistent with stated business purpose, transactions may be restricted or rejected. This oversight is ongoing throughout the life of each FinTech relationship.
Who is responsible if fraud occurs at the end-customer level?
The FinTech partner is responsible for customer-level onboarding, monitoring, and fraud remediation. The bank maintains visibility across the relationship structure and may intervene when necessary to mitigate risk, but responsibility for downstream customer activity remains with the FinTech. This layered model aligns with industry-standard BaaS frameworks and regulatory expectations. .
Does the bank hold or custody cryptocurrency or stablecoins?
No. The bank does not custody or hold digital assets. The program only supports U.S. dollar transactions related to the purchase or sale of digital assets through third-party platforms. Any digital assets are held by external custodians outside of the bank. This structure avoids balance-sheet exposure to digital assets and limits related operational and regulatory risk.
How do regulators oversee the FinTech program?
The program is subject to routine state and federal regulatory examinations. Examiners review governance, due diligence, transaction monitoring, and escalation processes, with particular focus on AML and growth discipline. The bank maintains ongoing dialogue with regulators and incorporates supervisory feedback into program enhancements.
How large can the FinTech program become?
Growth is guided by a multi-year plan and constrained by liquidity, staffing capacity, and risk management considerations. The bank prioritizes control and sustainability over rapid expansion and may limit or offload deposits to maintain appropriate balance sheet metrics. .
Is the FinTech program profitable?
The program currently generates recurring non-interest income. Profitability is driven by transaction activity and service fees, offset by technology, staffing, and compliance costs. Revenue is intentionally concentrated in a small number of well-performing partners to maintain oversight and efficiency.
Does the FinTech program support loan growth?
No. FinTech deposits are maintained in liquid assets and are not used to fund loan originations. This approach ensures funds are readily available and avoids liquidity or maturity mismatch risk. Federal Reserve Board - Federal Reserve Board announces it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors
Does this strategy require additional capital?
The FinTech program is capital-light and primarily generates fee income. Growth does not require material additional capital beyond normal operational needs.