Future of Banking: Bangor Savings Bank

How a 172-year-old community bank is positioning itself at the forefront of technology through embedded finance solutions
February 14, 2024
The Future of Banking: Bangor Savings Bank

We’re showcasing banks leveraging embedded banking software to forge innovative bank-fintech partnerships, reach new markets, and drive low-cost deposits.

This month, we profile the Maine-based Bangor Savings Bank, which has served Northern New England communities since 1852. At the heart of the bank’s embedded finance strategy lies a dedicated team of experts responsible for the development, execution, and ongoing management of innovative and differentiated financial solutions. This team ensures Bangor Savings’ fintech partnerships aren't just about acquiring new customers and deposits; they’re about fostering a culture of innovation and remaining at the forefront of industry developments while remaining true to the bank’s commitment to regulatory compliance.

As Bangor Savings continues to help shape the future of banking for its customers, it's transforming its own business and contributing to the evolution of the financial landscape. While remaining dynamic and flexible, the Bank sets a precedent for how community banks can thrive in an increasingly digital world by embracing innovation and collaborating with fintech leaders.

Read about how Maine’s largest community bank uses embedded banking solutions to augment its customer base and diversify its business in an ever-changing economic environment.

Partnering with fintechs through embedded banking software

Bangor Savings Bank partnered with embedded banking software platform Treasury Prime in February 2023. Since then, they selected and signed 23 fintech programs within the first nine months. Their debit card offering was in such high demand that they filled up a card BIN with nine card programs in ten weeks. The bank's deposit growth also showed momentum, with an 80% compounding monthly deposit growth rate so far.

“We find great value in Treasury Prime’s dynamic Application Programming Interface (API) technology,” says Ryan Dumond, Senior Vice President, Emerging Payments Program Manager at Bangor Savings Bank. “When launching new products to enhance the business, Treasury Prime often includes banks in the process. That's a huge compliment because it demonstrates they trust our recommendations.”

Increasing low-cost deposits through embedded finance

Bangor Savings Bank prioritizes low-cost deposits and non-interest income growth, which help provide some cover from interest rate fluctuations. This strategic vision drives its expansion into Banking as a Service (BaaS). 

"We’ve found success partnering with business lines that aren’t reliant on interest rates,” says Dumond, who leads the Bank’s fintech partnerships. “These activities may reduce our wholesale funding. Therefore, we save on interest expense while earning income as we lend those funds out."

By leveraging Treasury Prime’s embedded banking software platform, Bangor Savings gained access to vetted fintechs and brands seeking to launch embedded banking products with a reputable sponsor bank. The Bangor Savings team could then select the fintechs and brands they wanted to work with. In their case, the bank looks for fintech partners that fit from a culture and product feature standpoint, presenting the opportunity for a dependable reservoir of low-cost and dependable deposit balances.

Through a comprehensive evaluation process, the bank assesses potential partners' financial growth projections, regulatory compliance, technology and monitoring infrastructure, team expertise, and product offerings. This rigorous selection process enables Bangor Savings to identify fintech leaders who can deliver innovative solutions while being mindful of the safety and soundness of the organization.

Integrating Banking as a Service and compliance culture bank-wide

Cross-functional collaboration is the cornerstone of Bangor Savings Bank’s approach to BaaS. Instead of creating a large BaaS department that required additional staffing to support its various functions, they pulled in a team of subject matter experts from various internal departments — ranging from compliance to information technology (IT) — to help select, onboard and maintain fintech partnerships. BaaS is a team sport at Bangor Savings.

"It all goes back to building on an internal, trusted, and knowledge team structure here at the bank,” Dumond says. “We rely on various internal partners, including our risk management department, to address compliance, while our BSA (Bank Secrecy Act) team charts the course. We also enlist support from our third-party risk management team for due diligence review, our infosec team for penetration testing review, and the compliance team for disclosure review and customer-facing agreement flows. Additionally, we rely on our accounting team to ensure reconciliation, our treasury team for balance sheet management, and the marketing team for website and social media reviews.”

“These subject matter experts help with due diligence, which increases transparency and helps with regulatory approval,” Dumond says. “It's about ensuring we're doing the right things at the right time.”

Working with a multi-bank network

Bangor Savings Bank partnered with Treasury Prime because of its expansive and growing network of 15+ banks. Knowing that many other banks trusted the platform and that it had launched over 100 compliant and successful fintech programs provided a strong sense of assurance.

“It gave us confidence to know that other banks had confidence in Treasury Prime,” says Dumond.

The multi-bank network also allows Bangor Savings to remain selective about which fintech partners best fit their business model. It also helps avoid concentration risk in specific fintech types.

“If the fintech is not the right fit based on our risk appetite, we know that Treasury Prime can find a bank that’s a better fit for them within the network,” Dumond says.

Embedded finance products for fintechs

Products and services that Bangor Savings Bank provides to fintechs through the Treasury Prime platform include:

  • Retail and commercial checking accounts
  • ACH (same day and standard)
  • Wire transfers
  • Book transfers
  • Account creation
  • Know Your Customer (KYC) / Know Your Business (KYB) (with Alloy)
  • Debit card issuing (with Marqeta, Tag Systems, Arroweye)
  • Debit digital wallet tokens (with Marqeta, Apple, Google)
  • Transaction monitoring (with Unit21)

Through the Treasury Prime platform, fintechs can access fraud prevention features such as debit card authorization loops and certain card controls.

Future BaaS infrastructure

As its partnerships with fintech companies continue to expand, Bangor Savings Bank is building out its BaaS infrastructure and launching teams for development, execution transition, and ongoing management — each playing a crucial role in the bank’s evolving BaaS operations.

Dumond underscores that the bank prioritizes long-term strategies focusing on sustainable growth over short-term gains. Bangor Savings aims to remain at the forefront of industry developments, driving its commitment to embracing fintech partnerships.

“Many fintechs we engage with are building innovative features, and it's important for us as a bank to understand what's on the horizon in the market,” Dumond says. “It’s exciting to help support some of the new and unique products, services, and offerings shaping tomorrow’s ever-changing financial landscape."

To learn how to grow stable low-cost deposits with embedded finance to fuel your loan strategy, download our full guide.
Wondering how embedded banking could help your bank? Treasury Prime is an embedded banking software platform built by bankers for bankers. Our robust banking API, governance-focused compliance, and industry-leading bank network enable banks to reach new markets, modernize customer acquisition, and drive low-cost deposits, helping them to thrive in an ever-changing economic and regulatory environment. We have launched more than 100 embedded finance programs safely and successfully. Talk to the most reputable embedded banking team in the industry.

Related digital banking solutions content:

How Community Banks Can Stay Competitive with Embedded Banking

How to Make Bank Fintech Partnerships Profitable with Treasury Prime

Future of Banking: Grasshopper Bank

How Banks Can Grow Low-Cost Deposits with Embedded Finance

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