With a long history of serving its community in Central Texas, Horizon Bank’s charter dates back to 1905. Gregg Bennett, Horizon’s executive vice president, credits the bank’s commitment to creating lifelong customer relationships and business partnerships as the reason behind the bank’s more than 100 years of success.
That’s why three years ago, Horizon Bank jumped at the opportunity to partner with MOCA Financial Inc., a digital-first card-based payment provider, to embrace Banking as a Service (BaaS) and offer mobile payment services and purpose-driven cards to its customers.
BaaS is a component of the open banking strategy through which banks can partner with other institutions, fintechs or even non-financial institutions to quickly launch digital banking products and payment solutions. The application varies in each case, but by enabling fintech and software providers to collaborate, BaaS helps improve the user experience, reach new customer segments and drive revenue streams for involved parties.
When the opportunity arose, Horizon and MOCA relied on CSI’s open banking expertise to make their BaaS vision a reality.
Staying Ahead of the Technology Curve with BaaS
For over a decade, Bennett has spearheaded the bank’s operations, including a core conversion in 2014 to CSI’s NuPoint® core platform. Since then, the bank has shown impressive growth—from $450 million to $2.5 billion in assets.
But the bar continues to rise. Across industries, digital technology brings speed, convenience and a personal connection to everyday life; customers want that same experience from their bank. So, to better compete against big box and challenger banks, Horizon turned its focus to a technology that provides its customers with advanced card-based payment solutions.
In 2019, Bennett was approached by former business partner John Burns. As the co-founder of MOCA, Burns was developing an innovative debit card program that featured security controls, alerts and virtual cards. However, it was too time-consuming and expensive for MOCA to attain a charter as a “bank” to onboard accounts and fund the cards. So, to roll out this product, it needed a sponsor bank like Horizon.
With a gift card program top of mind, Bennett was impressed with MOCA’s product. Still, he realized it would be difficult for MOCA to sell its debit card program into financial institutions. So, Bennett suggested that MOCA develop a prepaid card deal and work with CSI as part of its adaptable open banking strategy, noting “the interchange rates are better, and MOCA wouldn’t have to worry about interfacing to the bank’s core provider.”
Since open banking was a relatively unmapped territory at the time, MOCA also needed a partner to guide this initiative with best practices. MOCA’s new partnership allowed the company to leverage CSI to develop and integrate its card system, enabling users to earn cash-back rewards.
“The challenge with any third party accessing the core system is the interfacing. But [CSI’s] APIs can provide all that quickly and without going through the interface hassles and expenses.”
Gregg Bennett
Executive Vice President, Horizon Bank
Taking Bennett’s advice, MOCA developed a full spectrum of integrated cards on one platform, creating new and competitive income opportunities for banks. MOCA’s innovative suite of cards minimized staff efforts and put the user in total control of security, managing payments and earning rewards.
Horizon then implemented API-led connectivity to grant access to their core systems. “The challenge with any third party accessing the core system is the interfacing,” Bennett says. “But the APIs can provide all that quickly and without going through the interface hassles and expenses.” Leveraging CSI’s catalog of APIs enabled them to interface directly with CSI’s core banking systems.
Enhancing the Customer Experience
As a leading financial technology company investing in open banking to service the growing fintech BaaS market, CSI seamlessly stepped in to serve as the conduit between MOCA and Horizon. This relationship resulted in customized and innovative financial products that ultimately benefit customers, MOCA and Horizon Bank alike.
“We look forward to growing their card program as the bank continues its impressive growth.”
John Burns
CEO, MOCA
“Today’s consumer expects instant gratification, and MOCA allows us to let a customer open a card and self-issue a virtual version of the card that can be used immediately—all through our digital banking channel,” says Bennett. “This results in higher adoption rates and increased card volume, which will drive interchange revenue and enhance the customer experience.”
As part of its journey, Horizon is now not only a client of MOCA, but also a business partner and sponsor. Thus, MOCA and Horizon established a BaaS relationship through CSI’s open banking platform, where Horizon provides the funding accounts needed to support MOCA’s card system. Now, MOCA is selling its card systems to other CSI partner banks and beyond.
“At MOCA, we believe in enabling banks to create card programs that fulfill their customers’ needs. These purpose-driven cards – cards for kids, caregivers, elderly parents, business purchase cards, branded gift cards – make it easy for institutions like Horizon Bank to create a superior cardholder experience and boost revenue,” says John Burns, CEO of MOCA. “We look forward to growing their card program as the bank continues its impressive growth.”
Reshaping the Financial Services Landscape
For Horizon, what began as an initiative to expand its customer offerings and implement a gift card program has transformed into a fruitful partnership in which, as the sponsor bank, Horizon profits off the interchange fees collected during the settlements of other clearing banks that partner with MOCA and offer MOCA cards.
CSI’s open banking platform—CSIbridge—safely and securely enables technology partners like Horizon and MOCA to build applications and services. In Horizon’s case, the bank was able to extend its data to create workflow efficiencies and connect with trusted vendors through CSIbridge’s catalog of RESTful APIs for banks, integrators, fintechs and other technology solution providers.
As for CSI, empowering bank customers and technology service providers to realize new revenue, while mitigating operational risk and managing data privacy and security, is the ultimate win. This successful BaaS collaboration further illustrates that authentic, long-lasting partnerships between financial institutions and technology providers are the future of financial services.