Bank partnerships come in all shapes and sizes. In addition to the bulge bracket banks like Goldman, community banks and credit unions are ramping up their partnerships.

Partners banks enable fintech startups the ability to launch financial services by leveraging the banks’ applicable regulatory license. Fintech startups are launching products like checking and leveraging a banks charter to offer federal deposit insurance coverage (FDIC). In return, the bank is getting access to deposits that it can lend out and make interest on the loans.

Partner banks are increasingly stepping up as a key player in the fintech ecosystem up from just 13 in 2017 to 30 in 2020, according to a recent research report from A16Z. Partner banks are also already seeing some of the benefits of opening up to fintech with a sample seeing an average of 2-3x higher returns compared with other banks.

Deposits are the life blood for some community banks and credit unions and vital for a fintech startup's go-to-market. We may see more bank opening up to startups as many have lost access to deposits from physical branches amid lockdowns which, down the road could lead to new fintech formation.