Thread Bank is a community bank with a powerful vision for the future of financial services.

“We see financial services continuing to evolve,” said John Bearden, Chief Banking Officer at Thread. “In the future, banking products will be highly tailored and delivered right when the customer needs them. In many cases, they will be made available by tech companies in partnership with small, innovative banks. Community banks that don’t embrace this trend will get left behind.”

Over the last twenty years, community banks (those with less than $10B in assets) have seen their share of the US banking market decline by fifty percent. Meanwhile, Thread has been steadily growing its deposits and end-customers by investing in high-quality, sustainable relationships with fintech clients.

One way Thread partners with fintech clients is through Unit. Unit is a banking-as-a-service platform that helps Thread meet, select, and onboard innovative tech companies that align with their risk appetite and vision for the future. Unit also streamlines the management, support, and oversight of these relationships on an ongoing basis. 

Today, Unit helps Thread partner with fintech clients such as:

• Relay, which helps small-business owners with things like accounting, payroll, and taxes
• Toolbox, which helps small-business owners in the construction industry gain access to capital to cover expenses
• Sequin, which helps women take control of their finances and earn rewards on everyday purchases
• Currence, which helps financial advisors and their clients partner for modern, effective money management
• Arpari, which helps owners of commercial real estate (CRE) manage cash across their portfolios

Like-minded partners with a compliance-first approach

When vetting potential fintech clients, both Thread and Unit prioritize maintaining a strong focus on compliance and oversight. 

“Unit’s compliance-first approach is differentiated,” said Bearden. “They have people in key compliance roles with decades of experience at traditional banks.”

In addition to helping fintech clients design and implement compliance programs, Unit provides an additional layer of compliance and oversight on an ongoing basis. In practical terms, that translates to transaction monitoring, KYC checks, and oversight of fintech clients’ systems and processes.

“Unit helps us provide a first line of defense against financial crimes and bad actors,” said Bearden. “Their compliance and oversight tools are thoughtfully built and help us identify potential risk vectors. They form a welcome addition to our overall compliance program.”

Ultimately, Thread is responsible for ensuring that their financial products are delivered in a way that is safe, beneficial for end-customers, and compliant with relevant laws. Unit is a like-minded partner helping Thread accomplish these goals.

“Unit helps us onboard end-customers in a way that is efficient and cost-effective without compromising our rigorous standards for compliance and security,” said Bearden.

A reliable framework for fintech partnerships 

When Thread and Unit partner to serve a tech company, the goal is to deliver banking and lending products in a way that is consistent, efficient, and compliant. 

Unit's unique approach to the partnership rests on three pillars:

1. Technology. Unit’s powerful technology allows Thread and their fintech clients to safely and efficiently launch new banking and lending products, onboard new end-customers, and help those end-customers interact with Thread’s financial products on an ongoing basis.

2. Project management and relationship support. Unit connects Thread with each prospective fintech client during the pre-sales stage, guides the company through Thread’s due diligence and onboarding processes, and helps the new fintech client understand and meet all of Thread’s requirements on an ongoing basis.

3. Compliance and oversight. Unit adds an additional layer of compliance and oversight, working closely with Thread’s team to prevent fraud, money laundering, and other financial crimes.

“We truly appreciate the standardized framework that Unit has developed for process and documentation,” said Bearden. “Each time they bring us a new tech company, we’re looking at a consistent, comprehensive diligence packet. That saves us countless hours and helps us get a jump start on our due diligence process.”

While Thread conducts due diligence, Unit helps the tech company begin an implementation project across several workstreams: compliance, legal, technology, and operations. The onboarding process—a close collaboration between Thread, Unit, and the fintech client—concludes only when the fintech client has completed all the necessary steps and received Thread’s formal approval to launch.

A partner for the long term

Thread plans to continue growing the core pillars of their business—banking, lending, and payments—and they’re confident Unit will be a valuable partner in the journey.

Since partnering in June 2022, Thread has seen how Unit can help unlock new efficiencies, reach new communities of end-customers, and create new sources of revenue. For example, Thread was excited to partner with Unit to launch branded charge cards in November 2022. It’s the first in what both organizations anticipate will be a growing suite of embedded lending products offered through the partnership—and the early results are promising.

“We’re excited to continue building out our lending practice with Unit,” said Bearden. “Taking this first step together helps us get comfortable with Unit’s operational capacities, so that we can consider adding additional credit and lending products in the future.”

Are you a bank that is considering partnering with tech companies as a way to grow your business? Please contact us; we’d love to hear from you.