BetaBank Submits FDIC Application for Digital Bank Focused on Fair Lending to SMBs

BetaBank aims to remove human biases from deposit and lending services with support from Google Cloud and Deloitte

CHICAGO, April 28, 2022 /PRNewswire/ — Today, Beta Financial Services, Inc. filed with the Federal Deposit Insurance Corporation (FDIC) to organize BetaBank, a native digital bank designed for small and medium-sized businesses (SMBs) with the mission to provide fair, accessible and cost-effective deposit and lending services. BetaBank will be built entirely on Google Cloud with Deloitte and others supporting the creation of the bank and its products to help small business owners meet their financial needs faster and with fewer hurdles than traditional banks.

Seke Ballard, Founder of BetaBank

BetaBank aims to remove human biases from deposit and lending services with support from Google Cloud and Deloitte.

Small businesses make up more than 99% of all U.S. employers and employ 58.9 million citizens,1 yet more than half of small business owners do not have their financial needs met by current financial institutions.2 A disproportionate majority of this denied capital are historically underrepresented and underserved groups. Sixty-six percent of BIPOC business owners (Black, Indigenous, or Colored) receive at least a percentage of requested financing from banks, compared to 80% of white business owners.3 Additionally, owners of minority businesses that are approved for financing pay an average of 7.8% interest, compared to 6.4% for non-minority businesses.4

Small business lending is one of the least automated parts of the US banking system. Almost all banks today rely on manual underwriting for SME loans, which involves commercial bankers making personal judgments about SME borrowers.

“As a child, I saw my father repeatedly abandoned by our financial system,” said Seke Ballard, CEO of Beta Financial Services and founder of BetaBank. “He was a successful business owner in North Carolina, but when he needed capital to expand his business to neighboring states, he was turned down 13 times. Small business owners deserve a better way to bank. BetaBank is committed to creating a digital bank that provides small business owners with an unbiased and efficient way to access the flexible capital their businesses need to thrive.”

Ballard has created a proprietary algorithm that uses cloud-based artificial intelligence (AI) to weigh risk, calculate qualification, and determine the probability of default on a loan much more accurately and quickly, and at a lower cost. than traditional banks. This helps reduce the barrier that prevents a wider range of small businesses from accessing the capital they need to scale and grow.

BetaBank will run entirely on cloud technologies, making it one of the first digital banks in the United States to be built on Google Cloud from the ground up. Beta Financial Services selected Google Cloud as the cloud infrastructure on which to build, run and manage BetaBank. Google Cloud provides a scalable, secure, and sustainable infrastructure to help grow BetaBank’s business and support its networks, while enabling regulatory compliance, fraud prevention, and overall security.

“We are proud to work with BetaBank to create a native digital bank whose financial inclusion mission closely aligns with Google Cloud’s goals of creating fair products that drive better outcomes for everyone,” said Janet Kennedyvice-president, North America, Google Cloud. “Combining Google Cloud’s industry-leading infrastructure with BetaBank’s powerful vision and lending algorithm will enable the bank to provide its customers with access to the services they need in a safe and secure environment.”

“BetaBank has the opportunity to push the industry to catch up with the demand for societal representation as shared values ​​become the influencer in the selection of products and services, and we at Deloitte are proud to support their mission to provide digital banking services to historically underserved small business segments,” mentioned Nick CowellHead of Affinity Banking, Deloitte Consulting LLP.

Deloitte worked closely with Ballard and his team of engineers to design the technology infrastructure to meet the requirements of a digital native bank. Deloitte also supported the design of BetaBank’s digital customer interface, enabling accessible and comprehensive banking services at significant cost savings for BetaBank and its customers. When BetaBank opens, Deloitte will continue to provide a full suite of managed services to support BetaBank’s operations.

BetaBank is currently in formation and is expected to open its doors to customers in early 2023. To sign up to join the waitlist and receive BetaBank launch updates, visit betabank.com.

About Financial Services Beta
Beta Financial Services is the holding company of BetaBank, currently in formation. Beta Bank is one of the first digital banks in United States be built entirely on Google Cloud from scratch. Born from the founder and CEO Seke BallardBetaBank’s belief that when small businesses succeed, everyone else succeeds, BetaBank’s mission is to provide small business owners the opportunity to thrive through easy access and fair banking.

Sources:

  1. Small Business Administration Advocacy Office Frequently Asked Questions

  2. Fundera by NerdWalletSmall Business Loan Statistics and Trends (2021)

  3. NerdWalletRacial funding gap shows black business owners excluded from access to capital

  4. NerdWalletRacial funding gap shows black business owners excluded from access to capital

BetaBank submits FDIC application for a digital bank focused on fair lending to SMEs with support from Google Cloud & Deloitte.

BetaBank submits FDIC application for digital bank focused on fair lending to SMEs with support from Google Cloud and Deloitte.

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SOURCE Beta Bank

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