The Bancorp, Inc. (NASDAQ: TBBK)
TBBK)

There has been a huge influx of FinTech companies looking to gain market share in an increasingly crowded arena. What 2020 has presented, due in part to the COVID-19 pandemic, is the stronger players are accelerating while the smaller players are really struggling. Interestingly, it appears that regulators are looking more closely at this space and setting higher expectations with the banks. “The Bancorp is fortunate in that we already have significant scale to build off of, so we are winning more and more business as a result of our ability to spread costs across an existing, highly automated platform,” notes Matt Wallace, Executive Vice President, Chief Information Officer of The Bancorp, Inc. (NASDAQ: TBBK), which is thriving in a year filled with turmoil and challenges for the banking industry.

As a branchless commercial bank, The Bancorp supports the unique needs of a variety of clients and FinTech partners many of which are disrupting the traditional banking industry. The Bancorp’s strategy includes offering private-label banking and wealth management solutions. This allows non-bank financial services providers to offer its customers branded financial products with The Bancorp providing the back-room operational and technology support. From issuing virtual debit cards to extending securities-backed lines of credit, The Bancorp has built an internal technology infrastructure focused on speed and efficiency—all while ensuring safety and soundness in the process.

The recent pandemic has accelerated the need to automate and collaborate across different geographies (whether in the office or working remotely). These might seem to be two separate issues but automating processes quickly and accurately typically requires close collaboration that traditionally takes place face to face. This is where The Bancorp excels by leveraging its network, and the new tools to more seamlessly optimize the automation process without having to be in the same room. “We are a trailblazer in financial services and one of the few companies in the world specialized in providing private-label banking and technology solutions to meet the unique business needs of non-bank companies,” mentions Wallace.

We are a trailblazer in financial services and one of the few companies in the world specialized in providing private label banking and technology solutions to meet the unique business needs of non-bank companies

According to data from the April 2020 edition of The Nilson Report, a leading publication covering payment systems worldwide that shows payment activity across the US, The Bancorp is the number one issuer of prepaid cards, and the number eighth issuer of debit cards. With its current growth trajectory, the company could be number four behind the three mega banks shortly. The Bancorp has been able to obtain this scale by being an early entrant into the FinTech challenger bank space, and by continually optimizing its platform to ensure it has the most sophisticated, scalable platform out there. “The best part about this, is that we are only getting better,” notes Wallace. Much of the work The Bancorp has done over the last three years has been about building out its model. “Now we are at a point where we can leverage that work to do some truly innovative things that I don’t believe any other bank can match,” adds Wallace.

What differentiates The Bancorp is the scale that it possesses—through its partnerships with Chime, or SoFi, or PayPal—to provide advanced technical products that exist somewhat exclusively at the largest banks, while still being nimble like a FinTech company. “This isn’t something that is easy, or really even possible to replicate without years of effort. Ultimately, this is a race; by the time another company could replicate our capabilities, The Bancorp would have already advanced,” says Wallace. He further mentions that the big opportunity lies in cross-border payments. There is a significant customer need out there to more easily and safely transfer funds. “I can see a lot of partnership opportunities to help make improvements in this space,” concludes Wallace.