Newtek Bank leans on fintech firm for deposit growth

Newtek Bank saw a 121% increase in deposits since December after partnering with fintech Apiture’s digital banking platform, according to a company announcement.

Newtek One Inc. bought National Bank of New York City in January and renamed it Newtek Bank. Following the transaction, the lender rolled out its digital account opening solution with Apiture, a Wilmington, North Carolina-based firm, and began marketing digital banking in March.

Of the USD 170 million in customer deposits the bank collected from March to April, more than USD 115 million came from the digital platform, Barry Sloane, Newtek’s president, chairman and chief executive officer, said in a statement.

The bank is already involved in payment processing, payroll solutions and insurance agencies

business. It also manages people’s hardware and software and makes loan payments, according to the director.

“We are going to work with Apiture to create interfaces that make it much more user-friendly for the customer without the use of branches, bankers, brokers and [banking development officers]Sloane said.

Sloane noted that financial institutions need to understand that hundreds of bankers are not needed to raise deposits. Fintechs like Apiture can help in the process, he said.

Apiture’s embedded banking components, which take application programming interfaces from the solutions and build them into Newtek’s dashboard portal, helped the lender use the fintech’s core service products. This also helped expose these APIs through Newtek’s portal offering, which gave the bank the flexibility to offer services in the way it wants, said Chris Babcock, Apiture’s CEO.

Babcock said a financial institution’s data can provide insight into a bank’s marketing campaign and help it better understand its customers. The challenging high interest rate environment could be a good time for banks to improve their digital services, which in turn is beneficial for fintechs, he said.

“Sometimes a challenging macro environment can actually create opportunities, and we think this is one of those times,” Babcock noted.

Last month, Apiture launched Business Insights, a new cash flow forecasting feature with integration of the Monit platform, and also partnered with Neural Payments, a peer-to-peer payment service for banks and customers.

Manage partnerships

“I think we clearly understand the challenges of banking and technology because they’re not really connected. Well, you have the regulatory aspect. You have legacy people in these organizations that are doing the uphill battle. They’re resistant to change,” Sloane noted.

Many fintechs deliver software without recognizing that there is an operational process behind it for the client experience, Sloane said.

Babcock noted that for smaller institutions, the technological challenge is not always the obstacle. Instead, it’s the challenge of managing all the relationships involving the various fintechs — a space where Apiture steps in to help, he said.

“We have the relationships with the fintechs integrated into our product and then provide the overall solution to the institution,” Babcock said. “So, it positions us very well to be able to continue to grow and we continue to see a lot of activity in the market. While the macro conditions are challenging for some of these banks, it actually creates a need to upgrade their digital solution.”