Sponsor bank
A chartered bank that provides the accounts, cards or payment access behind a fintech's product and remains responsible for the program.
What a sponsor bank is
A sponsor bank, also called a partner bank, is a chartered bank that provides the regulated products a fintech or platform offers its customers. These range from deposit accounts to card programs and payment rails. The fintech runs the customer experience. The bank holds the funds and network memberships and answers to its regulators for the program.
How it works
The relationship runs on shared duties. The fintech builds and markets the product, while the bank approves the program, sets compliance requirements and monitors it. Some programs add a program manager in between.
- 01 · DILIGENCE The bank reviews the fintech's business, controls and compliance before signing.
- 02 · LAUNCH The program goes live on the bank's accounts, cards or payment rails.
- 03 · OVERSEE The bank monitors activity, reviews marketing and tests compliance over time.
When businesses use it
- Launching debit, credit or prepaid card programs on the bank's network membership
- Offering accounts or wallets, often held in pooled FBO (for benefit of) accounts
- Lending through a bank partner that originates the loans
- Sending payments over automated clearing house (ACH), wire and instant payment rails
Cross River is a partner bank for fintechs and platforms, pairing a bank's compliance expertise with its own technology, including COS, its API-driven bank core. Partners can add accounts, payments, cards and lending as they grow. See why partners choose Cross River.