Smiley Technologies, a core banking provider focused on community banks, is trying to help its bank clients secure larger deposits by partnering with deposit technology company Reich & Tang. 

“Having pieces of software that attach on to the core nicely and seamlessly is always important,” said Elizabeth Smiley Glasbrenner, co-founder and CEO of Smiley Technologies. “That’s something every bank is going to need, and this is a just a good example.” 

With the new technology, Smiley’s bank clients can spread out large deposits among a network of banks on Reich & Tang’s deposit marketplace, which makes it easier for community banks to keep large deposits FDIC insured. According to Glasbrenner, Smiley’s clients are growing their deposit numbers since the core provider rolled out the partnership about nine months ago. 

Reich & Tang has hundreds of banks on its marketplace, and its technology allows banks to spread large deposits throughout the network to keep large deposits insured, despite the $250,000 FDIC limit. Banks that send money onto the marketplace can generate revenue from fees Reich & Tang pay to house large deposits. Banks can also request capital from the marketplace to fund new loans and grow, if needed, but they have to pay the money back with interest.  

See also: A Missouri bank is using tech to secure large deposits from public entities

Smiley, which was founded in 2002, began partnering with Reich & Tang after a banking client said it wanted to use the technology last year. After adding the technology to its core services, Smiley began offering the deposit marketplace functions to its other clients. According to Glasbrenner, all but one of Smiley’s seven clients are now using the technology.  

Glasbrenner said Smiley’s target market is small- to medium-sized community banks with less than $3 billion in assets. Despite only having seven clients, Glasbrenner said the banks it works with are spread out around the country. She did not disclose any of her banking clients. 

Smiley faces both nascent and incumbent competition from other core providers that target smaller community banks. Neocova, for example, recently secured a $9.5 million Series A round to improve its own solutions, and Jack Henry, founded in 1976, serves about 9,000 customers. According to Glasbrenner, Smiley isn’t eager to grow its client base. 

“We purposefully want to stay small because we think, at a certain size, that customer service model breaks,” Glasbrenner said.  

Bank Innovation Ignite, which will take place March 2-3 in Seattle, is a must-attend industry event for professionals overseeing financial technologies, product experiences and services. This is an exclusive, invitation-only event for executives eager to learn about the latest innovations. Request your invitation.