Greenlight’s new B2B offering brings child-focused banking to traditional firms

Atlanta-based Greenlight is making its kid-focused banking services available to traditional financial institutions, the fintech announced Wednesday.

The new partnership program, called Greenlight for Banks, allows banks and credit unions to offer the fintech’s suite of banking and education products to their customers through a co-branded landing page.

Over half a dozen firms, including Morgan Stanley, WaFd Bank and Community Financial Credit Union, have partnered with Greenlight to offer fintech services to their clients, Matt Wolf, Greenlight’s senior vice president of business development said.

Greenlight is actively involved in discussions with over 100 financial institutions, he added.

“In these conversations with financial institutions, we found that many do not have the expertise or resources to create a compelling digital banking experience for the next generation,” Wolf said. “We’ve designed something that really helps financial institutions seamlessly integrate family banking into their own ecosystems.”

Greenlight, which was founded by Tim Sheehan and Johnson Cook, launched a debit card for children in 2017.

Fintech has since expanded its offerings to include saving and investing for children, while allowing parents to automate allowances and supervise their relatives’ money management.

In January Greenlight launched a financial literacy game called Level Up, which banks and credit unions will also be able to make available to their own customers through Greenlight for Banks.

Lenders partnering with Greenlight have the option to hold the deposits collected by the fintech, or have them held by Greenlight’s partner bank, Community Federal Savings Bank, which issues the Greenlight debit card.

While banks are eager to launch products that reach the next generation of customers, bank accounts aimed at children typically don’t have high balances, meaning they won’t be big deposit generators for banks, Wolf said.

“A couple of transactions a month probably won’t make it to the top of their technology roadmap and prioritization,” Wolf said.

But offering services aimed at children and their parents allows a bank or credit union to create deep and potentially long-lasting relationships, Wolf added.

“As far as the child is concerned, they’re exposed very early to the financial institution’s brand. And for the parent, they recognize that this is a great service they’re getting for free because they have that banking relationship with the credit union or the bank,” he said.

The service is free for customers, Wolf said. Institutions that partner with Greenlight pay the fintech a monthly fee, based on the size of the firm, he added.

“Neobanks are really aggressively going after Gen Z. This gives banks and credit unions of all sizes the opportunity to have relationships with the next generation before they start being bombarded by neobanks and others who have a young adult banking relationship,” he said.

Greenlight’s push to offer its youth- and family-friendly services to traditional firms follows a tie-up it launched with JPMorgan Chase in 2020.

The New York-based bank the collaboration with fintech in October 2020 to offer an account designed for children called Chase First Banking.

The account reached 1 million users by April 2022, said the bank during its investor day in May last year.

Amid Greenlight’s new business-to-business focus, it still plans to expand its direct-to-consumer model, where users pay the fintech a monthly subscription to use its services directly.

But fintech recognizes the reach traditional banks have to offer, Wolf said.

“We think it can really help us reach the most families,” Wolf said, about partnering with traditional institutions. “It’s too big an opportunity to ignore.”