by Emmalyn Shaw
From Uber and Apple to Shopify and Mindbody, a prominent mix of technology platforms have rolled out financial services including payments and banking features in the United States over the past two years. Because these initiatives are proving to generate tangible business outcomes — new revenue generation, building customer loyalty — thousands of technology and non-financial companies are moving fast to embed financial services to their core offerings.
However, the process of launching and operating regulated financial products is hard enough for a bank, and practically insurmountable for companies outside of the financial services industry. The effort requires contracting with a sponsor bank, developing a code base, and then building out payment system integrations, regulatory functions and vendor integrations. The process can take 15-18 months and $2M+ to open a simple, undifferentiated deposit account, with a significant ongoing commitment required to support operations and compliance.
The innovation among middleware players such as Galileo has led to a partial streamlining of this process. While these options eliminate some portion of the complexity outlined above, the investment of time and money associated with using a middleware player remains significant. Striking bank partnerships and managing complex integrations and compliance requirements do not go away under this structure.
It is only through a platform solution that companies can substantially simplify the onboarding, reduce time to market to as little as 4 weeks instead of months, and limit investment to a palatable $50K. Unit’s seasoned team approached this problem with three key priorities in mind: elegant and easy to integrate technology, compliance-first focus and selective bank partners. Unit lured seasoned compliance thought leader, Amanda Swoverland, who has more than 9 years of firsthand experience managing risk and building new financial services at Sunrise Banks to serve as its Chief Compliance Officer. Itai Damti and Doron Somech founded Unit after spending the previous 9 years creating Leverate, a leading online brokerage headquartered in Israel with $100B+ in monthly trading volumes and 100 corporate customers across 15 countries. With this kind of entrepreneurial and operational experience, Itai and Doron developed a streamlined customer-focused solution that stood out above the rest.
With its modern infrastructure, Unit clients can launch banking experiences in under 6 weeks while eliminating 90% of the pain that experience with financial services offerings today (see their blog post for more details). Unit is currently focused on consumer and business banking products including checking, ACH, and debit cards. Clients will use Unit’s APIs for ledgers, core processing, KYC, complaints, compliance, data layers, fraud, and security, as well as a management dashboard to track end-user activity.
It was a no brainer for us to invest with top Israel VC fund Aleph in the Series A round (see Tech Crunch story) because the founding team had the pedigree and incredible early market traction. Unit’s founding team shares Flourish’s conviction that brands across diverse verticals will increasingly embed financial services into their offerings, and that a well-designed API infrastructure platform is crucial to enabling this long-term trend. We were attracted to their clear and simple mission: to help technology companies collapse the infrastructure barriers to offering financial products, or what they call “Fintech as a Feature.” Unit owns the heavy lifting of compliance and bank relationships. The combination of an experienced fintech team, deep technical horsepower and robust compliance functionality is what differentiates the company.
See also: Unit’s inaugural blog post “Building Fintech is Still Too Hard“