KeyBank partners with Treasury Prime for embedded banking

KeyBank has been steadily expanding its embedded banking capabilities and diversifying its commercial client base.

In its latest move in this direction, it announced a new partnership with Treasury Prime, a BaaS middleware and embedded banking provider, on Thursday.

“When a fintech or embedded client comes to Treasury Prime and says, ‘This is my business, I need a bank partner,’ KeyBank is now a new partner in that marketplace to get introduced to,” said Treasury Prime Chief Banking Officer Jeff Nowicki.

KeyBank previously announced KeyVAM, a virtual account management developed in partnership with the fintech Qolo for treasury clients, at American Banker’s Payments Forum in March 2024.

Jon Briggs, head of KeyBank’s commercial product and innovation, then formed an embedded banking division within the bank in June 2024. Bennie Pennington, head of embedded banking product and strategy for KeyBank, facilitated discussions between KeyBank and Treasury Prime as they established the partnership.

“KeyVAM is a solution that makes cash management easier for corporate clients, and Treasury Prime contacted us because they had a couple of clients that needed some of those services,” said Pennington. “We identified that there definitely was an opportunity for the two companies to work together to better serve some mutual clients and additional clients in the future.”

In embedded banking, banks allow companies outside the financial industry to offer financial products or services within their software, websites or apps. For example, in-app wallets for brands like Starbucks or Uber use embedded banking technology.

KeyBank has multiple existing fintech partnerships and will be forging more through the Treasury Prime network, according to Pennington.

“In embedded banking, which is this specific segment of software powered payments, we have a partner strategy,” he said. “Where possible, we try to establish partnerships with multiple different technology providers that have client bases that we can work together on. This is a case where Treasury Prime is using KeyBank technology to serve its clients.”

Treasury Prime

Treasury Prime advertises itself as a software provider that lets banks put rules into place to manage their fintech partner relationships. Fintechs use Treasury Prime’s APIs to open bank accounts, issue cards, send ACH and wire transfers, and so on.

Treasury Prime connects its fintech clients and its bank clients for partnerships. The company says it has more than 15 banks in its partner network, which KeyBank is now joining. According to a company representative, Treasury Prime’s platform hosts over 70 fintechs and corporate clients.

“With everything that’s happened over the last two-ish years with banks failing and more business lines getting shuttered for regulatory reasons, programs need redundancy,” Nowicki said. “They need the safety net of having two, three, four banks powering them behind the scenes because if they’re just tied to one, they might wake up one day getting shut down through no fault of their own. And banks are realizing that, too. They’re realizing large programs need to have the redundancy to be able to have a healthy, robust future.”

Treasury Prime experienced layoffs last year due to shifting company strategy to a more “direct” BaaS model, according to Nowicki, but he said that the pivot allowed banks to directly sign on with the fintech partners in Treasury Prime’s network.

“Unlike some other models in banking as a service or the middleware space, we very much view our client as the bank and the bank only,” Nowicki said. “The users of the services are the fintechs or the embedded banking clients, but those are the bank’s clients. So this is very much giving the bank the ability to launch banking as a service.”

Treasury Prime and other BaaS middleware providers may be reacting to the bankruptcy of Synapse last year. Synapse’s collapse eroded confidence in BaaS providers acting as “middlemen” between banks and fintechs and temporarily cooled enthusiasm for BaaS services.