First Internet Bancorp in Fishers, Ind., and MainStreet Bancshares in Fairfax, Va., remain committed to their Banking-as-a-Service platforms.
BaaS has gained more scrutiny from regulators, with the Office of the Comptroller of the Currency hitting Blue Ridge Bank with an enforcement order and the Consumer Financial Protection Bureau expressing an interest in banks’ dealings with fintech.
“We remain focused on our fintech and Banking-as-a-Service initiatives as a way to grow lower-cost deposit relationships and enhance noninterest income through payments processing,” David Becker, chairman and CEO of the $4.3 billion-asset First Internet said in a press release.
“Altogether, we believe this strategy will drive stronger earnings and profitability while advancing our position as a premier technology-forward digital financial services provider,” Becker added.
First Internet has entered into agreements with two platforms and is piloting three fintech partner programs.
The $1.9 billion-asset MainStreet, through its Avenu division, reported that total income in its fintech business rose by 51% in the third quarter from a quarter earlier, to $739,000. The division has one BaaS client so far.
The business still lost $570,000 in the quarter after noninterest expenses rose by 82% to $1.3 million.
Avenu’s assets increased by 46% to $7.3 million, but deposits fell by 4.2% to $69.4 million.