WaFd fintech spinoff Archway launches after $15M funding round

A WaFd fintech spinoff last week launched a platform to modernize and personalize digital banking, following a $15 million funding round.

Seattle-based Archway aims to raise the profiles of the nation’s more than 10,000 community and regional banks by strengthening their back-end systems, enabling them to integrate core products into modern web, mobile, voice and artificial intelligence – technologies. The firm provides a single point of access, through an application programming interface, to connect a bank’s core technology stack to customer-facing applications.

“[Community and regional banks] serves people the way the big banks don’t; and locally, these banks are really necessary for the ecosystem,” said Dustin Hubbard, Archway’s president. “One thing they do far better than the big banks and the neo-banks is on the relationship side.

“Most of these banks survive on the relationships they have with their customers. But for the client, there is a trade-off on the technology side. We are trying to close the digital divide so that the community and regional banks can really foster these relationships without sacrificing them [what’s available on the bank’s] the technology side,” Hubbard said.

Archway began as Pike Street Labs more than three years ago, when WaFd CEO Brent Beardall and board member Steve Singh saw a need for a robust back-end system to ensure the bank’s continued growth.

“At WaFd Bank, we have built high-value personal banking relationships with our customers,” Beardall said in a prepared statement. “With Archway, we do so in a technology-first environment that enables the highest level of customer service and employee satisfaction.

“Technology can and should drive improved customer experience, stronger controls and more efficiency,” he said. “I’ve heard from banks around the country that what we’ve started building is the solution they’ve been looking for, and we’re excited to support Dustin and the team as they roll out solutions for WaFd and other banks.”

Archway’s funding round was backed by Madrona Ventures, a prominent Pacific Northwest venture capital firm and early backer of tech rock stars like Amazon and Redfin. Singh, who invented the Concur expense management app in the 1990s, is the CEO of Madrona; and Hubbard said Archway’s spinoff from WaFd arose when Singh noted Pike Street Labs’ doings during WaFd board meetings.

“On the WaFd side, they looked at the pros and cons of spinning us off. It became clear that [the spinoff] was a win-win for everyone involved, Hubbard said. “WaFd got the benefit of getting the innovation they got from us as Pike Street Labs, but as an investor they get the benefit of us growing into a [software-as-a-service] supplier to other banks.”

Archway targets banks with $10 billion to $250 billion in assets.

“Banks of that size have the wherewithal to make some technology investments, they have the ability to be more innovative than their banking counterparts, but they need help to bring that innovation,” Hubbard said.

The disregarded nature of customer data poses a challenge for banks. Archway’s first offering was the creation of a data lake for banks to access a more holistic view of each customer, including how long they have banked with them and information about their assets, to provide more personalized service.

Archway will soon launch other products and integrations, including forecasting, loan processing and other standard banking services.

The company’s “wow factor,” Hubbard said, is its integration with TalkDesk, a call center solution common in the banking world, and Amazon Lex, a conversational AI service.

The solution turns the typical “very frustrating” call center tree — “it’s press 1, press 2, press 3, and then the dog barks and you forget which number to press,” Hubbard lamented — into something more conversational, reducing fraud by using a customer’s biometric voice print to ensure they are talking to the right person.