Transforming from a Midwest Community Bank to a Fintech Sponsor Bank: The Journey of OMB Bank
In an attempt to remain competitive in a rapidly evolving digital financial landscape, OMB Bank, a small community bank in the Midwest, has chosen to transition into a fintech sponsor bank. As traditional banking continues to shift online, the Missouri-based community bank is embracing this change to expand its market reach and online account openings.
The Paradigm Shift in Banking
OMB Bank recognizes that a physical branch is no longer the main factor in acquiring or retaining customers. “Their branch is in their pocket,” says Jessica Sims, OMB Chief of Staff, referring to the growing trend of mobile banking. “We see the fintech community as just an extension of our local, physical community. While they’re not in our backyard like some of our other customers, they are our long-distance community.”
Partnership with Treasury Prime
In line with its strategic vision to evolve digitally, OMB Bank partnered with Treasury Prime, a leading BaaS middleware and embedded banking provider, in early 2024. Treasury Prime, known for enabling banks to manage their fintech relationships effectively, serves as a bridge between fintech clients and bank clients, establishing direct partnerships. Other prominent banks like KeyBank have also harnessed Treasury Prime for embedded banking, elevating its credibility in the banking sector.
Revolutionizing Partnership with AI Marketplace
Treasury Prime recently launched an AI Marketplace, powered by LLM technology, streamlining the process of aligning fintechs and banks for potential business partnerships. Jeff Nowicki, Chief Banking Officer at Treasury Prime, highlighted the need for this AI-driven approach, stating, “For a long time we were doing this manually, but with thousands of fintechs coming into our network we decided to invest in AI to help our banks get the right leads at the top of their email inbox.”
OMB Bank’s Involvement in the Network
OMB Bank joined the Treasury Prime’s bank network, seeking fintechs that needed a sponsor bank. This move is expected to bolster account generation for the $1.4 billion-asset community bank as customers open accounts through partner fintechs. Sims underscores the importance of this step, saying, “We believe bank relevancy relies on embedded finance. Not exclusively, not for all banks, but for us. We’re invested in new technology and ideas.”
First Fintech Partnership
OMB became the official sponsor bank for its first fintech partner, Backpack, a university payments fintech, a year and a half later. Nowicki explained the partnership, stating, “The accounts that are opened through the Backpack program are FDIC-insured OMB accounts.”
The Future of OMB Bank
OMB Bank plans to leverage the upgraded Treasury Prime marketplace platform to continue adding other fintechs to its network of third-party account partners. As the bank builds out its plans for the next quarter or two years, Sims notes the value of the automated system, saying, “As I’m in the marketplace, it’s gone from probably completely manual on my end to totally automated for me. It’s tremendous for us to be able to easily adjust for where we are going in the future.”
In essence, OMB Bank’s transition from a traditional community bank to a fintech sponsor bank signifies the ongoing transformation in the banking industry, driven by the rise of digital technologies and shifting consumer behaviors.
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