If your company currently offers or plans to offer a FinTech app or embedded banking product, finding the ideal Banking as a Service (BaaS) provider and sponsor bank are keys to your long-term success. And let’s face it, this may not happen on the first try.
You may be encountering delays in launching, misalignment on compliance requirements, or even have a need to migrate off your current provider. Whatever your situation, it’s important to know that switching your BaaS provider doesn’t have to be a difficult or complicated process.
Our team has successfully launched programs that have converted from other providers. From this experience we’ve built a process that maximizes speed to market while simultaneously ensuring your program is built to scale with a strong foundation of risk & compliance.
Once you start working with Synctera, our Solutions Consulting team will work to understand your current situation and create an efficient launch roadmap unique to your product use-case and timing requirements. Then, you and the Synctera team will meet with potential new sponsor banks from our diverse community to match you with the one that best aligns with your product, roadmap, and company vision. This way you can be confident in your path forward with both Synctera and your new sponsor bank.
Our goal is to facilitate a quick and seamless conversion for both you and your customers. With our hands-on support and best-in-class compliance team, we’ll help guide you through the process so you can get back to scaling your product.
Below, we detail out the steps needed for you to migrate sponsor banks, including both the process of getting started with Synctera and the steps needed to seamlessly move your customer accounts and cards.
Step 1: Connect with Synctera and begin preparation
Our Sales team first helps you determine if Synctera can support your use case. If so, our Solutions Consulting team will meet with you to deeply understand your use case and customer journey in detail.
This information is used to craft your solution summary, a document that details out your product features, flow of funds, and account architecture, among other things. This document helps to ensure that both Synctera and your new sponsor bank partner truly understand the requirements of your use case prior to contracting.
Once this is complete, you will then meet with our Risk and Compliance (R&C) team to prepare for bank due diligence. Our compliance experts help you understand what documents are required for bank due diligence and what questions the bank will likely ask about your product.
Step 2: Match with a new sponsor bank
When building your banking product, one of the most important partnerships you will form is the one with your sponsor bank partner. During the sales process, our team presents your business to the multiple sponsor banks on our platform to help you to find your perfect bank match: a bank that aligns with your product’s use case and your company’s vision.
To ensure compatibility, you’ll meet with the potential sponsor banks that express interest. You and your potential new bank partner will be able to align on your use case, timeline, and long term goals - so that before you formalize the partnership, you can be confident that the bank is ready to launch with you.
Pricing and contracts are finalized during this step.
Step 3: Remap your product to Synctera's API
To help facilitate a seamless conversion process, Synctera’s Implementations & Onboarding (I&O) team will work with you to remap your FinTech app or embedded banking product to Synctera’s APIs. This remapping process helps to minimize the additional development work needed to switch providers.
Also, with the help of our comprehensive developer documentation and our useful Synctera.AI chatbot, you’ll have everything you need for a quick and seamless integration.
Once the integration is complete, Synctera I&O will also help you test your remapped product and present it to your new sponsor bank.
Step 4: Complete compliance requirements for your new sponsor bank
Building a resilient compliance partnership with your sponsor bank before launching will help set your product up for long-term success. Early on in the process your sponsor bank will ask for documentation and also work with you to establish compliance-related policies and procedures. This process includes:
- Providing complete risk and compliance documentation (InfoSec, policies, procedures, disclosures) required by your new sponsor bank. You may be able to re-use some of your existing documentation.
- Establishing fraud and anti-money laundering rules with the new sponsor bank
- Establishing program and transaction limits with the new sponsor bank
- Sharing marketing materials with the new sponsor bank for approval
To avoid having your customers go through the KYC/KYB process again, your new bank will attempt to verify that you’ve already sufficiently completed the initial and ongoing KYC/KYB checks for your existing customers. If they are able to verify this, your old sponsor bank will be able to send your new bank the related files via SFTP.
Step 5: Establish FBO account
Syntera I&O will help you establish all of the bank accounts needed at your new sponsor bank for your product to operate. These accounts include:
- FBO account
- Operational account
- Reserve account
You will be required to fund these accounts with amounts agreed to in your contract.
Step 6: Establish new card art with card production provider
If you offer physical or virtual cards to your customers, you will need to create a new program with Synctera’s card production provider. A new program involves re-submitting the card art you were previously using and making any modifications to the formatting, if necessary.
You will also need to establish the tokenized cards with Mastercard and Visa to allow customers to add them to Apple Pay and Google Wallet.
Want to learn more about Synctera’s card art guidelines? Check out our guide which includes detailed specs and templates.
Step 7: Migrate customer data
When switching BaaS providers it is important to ensure that all of your customer data is migrated to the new system, both for compliance purposes and to ensure a smooth customer experience. This data includes customer information, account details, KYC evidence, among other things.
Our team has developed a migration toolkit to help make this process as efficient as possible. We provide you with the tools and information you need to map your data to Synctera’s specifications, test and validate this data, then ultimately import the data into our platform.
This process makes sure that all of the customer context and data you’ve collected over time is still readily available to you, your team, and your sponsor bank partner after completing the migration. Ultimately, this results in a smoother transition.
Step 8: Alert customers
Before you can move your customers’ funds to your new sponsor bank and issue them new cards, your customers will need to opt in and agree to your new terms and conditions. Synctera will help guide you through this process and assist in creating the user experience and marketing strategy to help minimize disruptions to your customers.
Each situation will require a different process depending on your customer base and product set, but the process typically follows these steps:
- Present your customers with an explanation that their account will transition to a new bank, with language explaining the benefits of the change
- Allow your customers to opt in or opt out of the new bank account. If the customer opts out, you close out the account and send them the remaining account balance
- When a customer opts in to the new account, the funds will be transferred using the process defined in the next step
Step 9: Fund FBO account
For all customers that have opted into the new account, you will need to get your customers’ funds transferred from your old sponsor bank to your new sponsor bank. There are two ways to transfer funds from your previous sponsor bank’s FBO account to the FBO account at your new sponsor bank.
- Return funds to customers and ask them to move the funds to the new sponsor bank (this might be appropriate if you are a B2B company with fewer customers that each have a large deposit balance).
- Using a simple string of API calls, close out the customer account at your previous sponsor bank and transfer the funds to the FBO account at your new sponsor bank. This process is more common and results in a more seamless user experience.
At the end of the process we recommend getting a reconciliation report from your existing bank or BaaS provider to confirm the end of day balance for all accounts are the same before and after the move.
Step 10: Issue new cards under new BINs
Our API makes it simple to issue new cards to your customers. Once you are set up with your new sponsor bank’s BIN, you can issue virtual and/or physical cards for your customers.
Check out our developer documentation for more details on issuing personal or business cards.
Get in touch to learn more
As regulatory scrutiny on bank and FinTech partnerships increases, some sponsor banks have delayed their partners’ launches or began telling programs they must migrate elsewhere. If you’ve experienced this disruption or if you are encountering issues as you scale, Synctera can help.
Synctera’s platform is built with regulatory compliance at the forefront, allowing for direct communication and seamless collaboration between FinTechs and their sponsor bank. By staying in sync with your sponsor bank partner throughout the entire process, from contract signing to launching to scaling the product, you can mitigate any unforeseen delays or disruptions.
We know switching Banking as a Service providers is not an easy decision to make, but our team is here to make the transition seamless for both you and your customers. Want to learn more about this process? Reach out to our team using the link below.
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*This article was last updated on October 16th, 2023