HMBradley, a Santa Monica-based fintech, has eliminated its waitlist and is now open to new users after securing a new sponsor bank.
The neobank’s growth had been limited by its former partner, Hatch Bank, which struggled to keep up with the rapid deposit growth.
The new partnership with New York Community Bank, a division of Flagstar Bank, means that HMBradley can finally open its platform to more than 25,000 waitlisted customers, joining the platform’s 10,000 existing members.
The Importance of a Sponsor Bank
According to HMBradley co-founder and CEO Zach Bruhnke, finding a new sponsor bank that could keep up with the fintech’s growth was crucial.
“We did not want to be surprised again,” said Bruhnke, referring to the fintech’s former sponsor bank’s request that it slow the pace of its deposit gathering.
Since HMBradley’s perks are tied to user deposits, the average account holder has more than $40,000 in their account, which sets it apart from other neobanks that target the paycheck-to-paycheck demographic.
Incentivizing Savings
HMBradley incentivizes savings by offering a 4.2% annual percentage yield to account holders who have positive monthly cash flow, have a $500 monthly deposit, and spend $500 on an HMBradley credit card each month.
This has helped the fintech to garner nearly $600 million in deposits since its launch in 2019.
Bruhnke hopes to reach $1 billion in deposits this year.
New Partnership with Thought Machine
HMBradley also announced a new partnership with U.K.-based Thought Machine, a cloud-native core banking platform that has been tapped to overhaul JPMorgan Chase’s retail network.
The partnership will allow HMBradley to transition from overnight batch transaction processing to real-time ledger capabilities, enabling it to roll out new products quicker.
“We’re excited to be able to open the doors again and not be worried about being limited,” said Bruhnke. “One of the biggest reasons that we ended up with a bank as large as NYCB, is that they are an $87 billion institution. They’re not a small potato.”
Closing Thoughts
HMBradley’s new partnerships with NYCB and Thought Machine will help the fintech to continue growing and offering innovative savings products to its customers.
The elimination of the waitlist is a significant milestone for the neobank and will allow it to reach a wider audience of savers.
As the fintech industry continues to evolve, partnerships between banks and fintechs will become increasingly important in driving growth and innovation.
