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Upgrade’s Bank Ambitions Show How FinTech Growth Expands Choices

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Upgrade’s Bank Ambitions Show How FinTech Growth Expands Choices

Bank partnerships give FinTechs regulated infrastructure and funding while delivering deposits, loans, transactions and fee revenue to financial institutions.

PYMNTS Intelligence found that credit unions use outside providers for an average of nine products, up from six in November 2024.

Large FinTechs can spread origination, funding and other banking services among more providers or bring selected functions inside without abandoning partnerships.

As FinTechs scale, they bring banks more deposits, loans, transactions and fees while gaining more choice over which institutions provide the funding and infrastructure behind them.

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Upgrade facilitated more than $53 billion in credit through a model built with banks and loan buyers when it applied this week to establish its own bank, PYMNTS reported Monday (Oct. 12).

The proposed Nevada industrial loan bank would give Upgrade additional ways to fund its credit products, but the company isn’t planning to replace the financial institutions already supporting its business. Upgrade said the bank would complement its existing relationships with bank partners and loan buyers, per the report.

Upgrade’s application comes as partnerships between FinTechs and financial institutions are expanding across lending, payments, deposits and technology. The economics can work in both directions. A FinTech can pay a bank for loan origination, payments access, account programs and other regulated services. Banks can receive deposits, transaction fees and lending assets generated through the FinTech’s distribution.

A lender producing a few hundred million dollars of credit has less volume to spread among originating banks, warehouse lenders and loan buyers.


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