Matthew Wallace, CIO
Banks are currently dealing with end-of-life infrastructure issues and challenges associated with internally managed data centers, which is a major headache for many organizational CIOs. Many CIOs have prioritized the modernization of legacy, back-office systems. While painful, both in terms of expense and transition effort, they don’t have a choice as their company cannot compete effectively without making these types of investments. By developing a strategic plan geared towards continued automation, The Bancorp is creating a highly scalable back-end system to support its complex payments business. The company delivers quality infrastructure while curbing expense outlay over time, especially as volumes continue to grow. Further, The Bancorp prioritizes the enhancement of security-critical applications that house sensitive consumer information and maintains close collaboration between IT and cybersecurity departments to promote security as a cultural priority within the clients’ organization. “We are leveraging technology to expand and enhance our leadership position within the evolving challenger bank/fintech ecosystem,” mentions Matthew Wallace, the CIO of The Bancorp.
Operating as an unusual bank, The Bancorp derives most of its deposits through relationships with fintech partners, unlike the other financial institutions which obtain deposits through high-cost operations. These low-cost deposits are then deployed to facilitate lending activities across The Bancorp. IT has become a critical player for the enhancement of both payments and lending activities. For the fintech-payment division, The Bancorp continues to become more sophisticated in its capabilities to attract larger, industry-leading partners. “With respect to our lending solutions, we continue to streamline and automate lending processes and advance CRM solutions,” says Wallace.
We are leveraging technology to expand and enhance our leadership position within the evolving challenger bank/fintech ecosystem
The Bancorp works with several platforms that support tens of thousands of financial advisors with a product that allows consumers to borrow against their stock portfolio. It is a very low cost, secure credit product, but is complex in that the underwriter must value the collateralized portfolio to determine appropriate interest rates and credit limits. The company has developed an end-to-end solution to automate all manual elements associated with this process and reduced the time to onboard a loan to 48 hours. This has enabled them to better support their customers with an immediate need, grow market share in this space, and differentiate from their peers. Additionally, because this process is automated, there are meaningful economies of scale as The Bancorp grows this line of business.
Another key differentiator of The Bancorp is its capabilities in terms of regulatory compliance. The company currently issues more than135MM cards in the United States, which puts them in the same neighborhood as Chase and Bank of America. When Wallace started at The Bancorp in 2017, the organization had almost an exclusive focus on improving its regulatory and financial position, The Bancorp achieved these immediate objectives and continues to improve its capital reserves and earnings while concurrently developing world-class control functions. In 2020, the Company aims to divert resources formerly (and successfully) dedicated to remediation to cultivate its partnerships, establishing new relationships, and driving revenue growth for its partners. The Bancorp has a history of providing white label solutions and will continue to build upon and enhance its BaaS and API offerings. “We are at a unique period of time where the intersection of banking and technology is becoming foundational to a new banking ecosystem. Because of the Durbin amendment, there is a distinct advantage to partnering with smaller banks. We process billions of transactions a year for tens-of-millions of customers. We do this all with just over 600 employees, allowing us to sit comfortably under the Durbin threshold while offering capabilities none of the other smaller banks in this space can match,” concludes Wallace.