Inside Fifth Third's 'innovation economy' ambitions

Key insights: Fifth Third is bringing together its embedded banking platform Newline and Comerica's venture banking business for a new offering called Innovation Banking.
What's at stake: The Cincinnati-based bank is hoping to offer technology companies banking services at every stage of maturity.  

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LAS VEGAS —  Eight months after its acquisition of Comerica closed, Fifth Third is doubling down on its strategy to sell banking to fintechs and technology companies. 

The Cincinatti-based bank is bringing together its embedded banking platform Newline and Comerica's Technology and Life Sciences division for a new offering called Innovation Banking that is focused on providing banking services to tech companies at every stage of maturity. 

"We are building something for the whole innovation economy life cycle; startup to full scale is the focus," David Whiting, Fifth Third's head of innovation banking, told American Banker at Money20/20 in Las Vegas. "We're building for the journey, not the moment."

With Innovation Banking, Fifth Third offers services to technology companies across "every pillar" of the bank, including corporate payments, treasury services, venture debt, working capital, embedded banking and payments and asset backed finance, David Allred, group head of fintech at Fifth Third, told American Banker. 

"The beauty of all three of these businesses is they're all up and running. They all exist," Allred said. "With the addition of the innovation banking platform, we can now start with these companies early and grow with them into those needs around Newline and around asset back finance." 

Fifth Third is not just focused on fintech though, it is targeting startups across general technology, fintech, and life sciences, which includes healthcare services, health tech, and biopharma, Whiting said. It is also looking to attract founders and investors through wealth management and private banking services. 

The bank said it hopes to net as much as $10 billion in new deposits over the course of multiple years as a result of its new banking division. 

"Sponsor coverage is key, but then obviously our relationship with founders and CEOs and CFOs is critical," Allred said. 

The bank already has clients on the platform from its acquisition of Comerica's Technology and Life Sciences group, which has been in business for more than 30 years. But where Comerica used to begin its relationships by offering lending products to companies that were more mature, Fifth Third hopes to be startups' incumbent bank "as early as possible," Whiting said. 

"Innovation banking is a hub," Whiting said.  

One of Fifth Third's challenges as it looks to scale its new banking division will be to embed itself in the ecosystem that it is trying to serve, according to Tyler Brown, an independent fintech and payments consultant. 
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"Fifth Third has a sound idea, but the execution is backwards," Brown told American Banker. "The success of a 'startup lifecycle' banking strategy depends on being embedded in the ecosystem. Fifth Third is grafting innovation economy language onto a legacy bank that's digesting another one. This business would be best built from the ground up."