How Grasshopper Bank is Preparing for Growth on Banking as a Service and Fintech Integration
Grasshopper Bank has focused on innovation from the time it was founded 3 years ago. Similar to Silicon Valley Bank and Square One Bank, the company offers banking services to tech startups and venture capital firms. And when CEO Mike Butler and Chief Digital Officer Chris Tremont, along with other key additions, joined the bank as executives last year, they started to think about how to take the bank to the next level.
“Venture banking is a unique business, and can scale more quickly when you pair it with complementary teams in the fintech and business banking space. And so that's where the opportunity came for a few of us to join the team and say, ‘Okay, the vision is still here, the mission is the same. But we have to grow our offerings,’” said Tremont.
Tremont and Butler joined from Radius Bank, which they had sold to LendingClub. And they came to Grasshopper with a plan to expand the bank into digital business banking and banking as a service (BaaS).
They became the first bank to activate Treasury Prime’s new partner offering, FIS embedded finance. The groundbreaking partnership between Treasury Prime's BaaS platform and FIS — one of the top U.S. core banking providers — gives banks the ability to accelerate integrations with fintechs like never before.
Here’s more about how Grasshopper is leveraging Treasury Prime to offer a new kind of business banking experience — a strategy that The Financial Brand has said “could prove instructive for both new and seasoned banks.”
To learn more about how to offer embedded banking products, download our white paper.
Small business banking, but make it innovative
For a lot of small businesses, banking options leave something to be desired. Few banks offer these companies the kind of streamlined efficiency consumers have come to expect from fintechs and neobanks. Typically, small business owners are also expected to open accounts in-person.
Grasshopper Bank changes all of this. Tremont says the aim of the bank’s small business push is to offer “excellent core operating accounts, digital banking tools, and eventually lending.”
“Some small business owners don’t want to have to walk into a bank branch, and they need good digital tools. These folks are consumers themselves, and they find themselves wondering, ‘Why do I get all this great stuff when I’m a consumer, but then when I bank as a small business, the tech tools are so far lacking?’” said Tremont.
He said that by working with Treasury Prime, the bank has been able to cut the small business account opening process from days to minutes.
“With Treasury Prime’s APIs and the company’s KYC partner Alloy, we can digitally open a small business checking account, fully paperless, in under 10 minutes, which is a huge competitive advantage. I don't know how many banks can say that,” he said.
FIS integration: An opportune alignment
Earlier this year, Grasshopper had decided to move to a new core and was evaluating various options. “Our vision was clear, we wanted to better serve business, fintech and embedded finance clients,” said Tremont.
Grasshopper ultimately chose the FIS core because when combined with Treasury Prime’s BaaS solution, they determined that it can help them go to production with fintechs and enterprises faster than any other option, while also being the most cost effective.
FIS is one of the top three companies powering community banks in the US through core banking and payments platforms. Knowing the Treasury Prime-FIS integration was underway was “part of the reason why we selected FIS as our core provider,” said Tremont.
“There is a big revenue opportunity for all parties involved by getting this right. And so having FIS directly involved with these integrations will make things a lot smoother as we start to onboard more clients,” he said.
Already Grasshopper has signed up its first fintech client, HUMBL, a Web 3 blockchain company with both consumer and commercial divisions. Through Treasury Prime’s APIs, the fintech leverages Grasshopper’s bank services across its user base.
Full circle with Treasury Prime
The latest integration and partnership brings Tremont and Grasshopper CEO Butler’s relationship with Treasury Prime full-circle. The pair worked with Treasury Prime early in its development, when they were at Radius Bank.
“Through Radius, we were a strategic investor in Treasury Prime as well as the first client. Over a three or four year period, we stood up 30 or 40 programs for banking as a service,” he said.
Tremont and Butler’s innovations enabled them to transform Boston-based Radius from a troubled community bank into a national leader in digital banking. Tremont says Radius started offering banking as a service through Treasury Prime in the last quarter of 2018. By the first quarter of 2021, the bank had generated nearly $1 billion in BaaS deposits. Treasury Prime also helped facilitate more than $1.3 billion in PPP loan applications for Radius by extending existing APIs and building a brand new application flow for the bank in a matter of days.
Radius’ success ultimately caught the attention of LendingClub, and the company acquired Radius in early 2021 to form LendingClub Bank, which continues to partner with Treasury Prime.
“We were with Treasury Prime from day zero. There was no other partner we were going to talk to. We love the company and how it's run, the technology is excellent, and it’s a great brand in the marketplace. There was no one else we even entertained the conversation with,” said Tremont.
FIS partner banks interested in integrating with Treasury Prime should reach out to their FIS account manager or the Treasury Prime bank team to discuss integration.
Fintechs interested in taking advantage of FIS embedded finance or other embedded finance programs at Treasury Prime can contact our sales team with questions. Developers can also experiment at their own pace with Treasury Prime’s API in our Sandbox.