Black-Owned Banks Get a Boost From an Innovative Partner

OneUnited Bank and financial institutions like it have found a true partner in Clearwater Analytics.

Imagine you own a bank in a community you love. Where other people see urban blight, you see possibility. Where others grimace at the sight of worn-down neighborhoods, you see vibrant people dreaming of homeownership.

When you started this bank, your idea was to provide mortgages to home buyers with big dreams but so-so credit. You planned to help small business owners open their doors to
the public. You wanted to provide a second chance to those who have been blackballed from banking due to bounced checks or overdraft fees. Finally, you hoped to offer the kind of financial education that was never available to many in your community.

In short, you decided to open a bank designed to improve the lives of everyday people and the communities they call home.

You open your doors, and word of mouth is good. Your bank grows at a steady pace. The problem is, you can't compete with the big banks, those with enough friends in high places to keep their coffers full. Those institutions can approve a greater number of loans than you can, simply because they have the financial backing to do so.

For years, this is what Kevin Cohee, CEO of OneUnited Bank, faced. The mission was clear, and OneUnited became the largest Black-owned bank in the U.S. Still, it didn't have access to the same level of corporate investment as the big guys. Today, due to a partnership with Clearwater Analytics, it's becoming easier for corporations to invest in Black-owned banks like Cohee's.

The corporate connection

Every time a corporation picks a place to deposit its money, that chosen financial institution benefits. A well-funded bank can approve loans, give bank customers a second chance, and provide a wealth of financial information to people who may not have learned about money while growing up.

According to Cohee, corporate deposits have historically been "circulated among friends." In other words, corporations have helped fill the vaults of banks run by the rich and powerful. And that's an important connection to have because corporations make billions of dollars, and their investments can make or break another business.

Perhaps corporations were comfortable doing things the way they'd always been done. Or maybe, investing in minority-owned banks has -- up to now -- been too complicated.

A wind of change

Clearwater Analytics recently partnered with OneUnited Bank to launch a technology-based solution to help their corporate clients seamlessly invest money into minority communities by investing in minority banks.

How does it work? Clearwater Analytics is the leading SaaS (software as a service) company for investment accounting, reporting, and analytics. Corporations of all sizes use Clearwater Analytics' software to track and manage their deposits. To date, the banks available to these companies have been the usual suspects: traditional financial institutions.

The groundbreaking thing about the partnership between Clearwater Analytics and OneUnited is that it gives corporate clients an easy way to deposit funds into minority-owned banking institutions.

Of the partnership, Sandeep Sahai, CEO of Clearwater Analytics, says, "We are proud to be working with OneUnited Bank and enabling the many corporate clients on our Clearwater platform to manage their investments in Black-owned businesses and minority communities."

Sahai adds that "With nearly 500 large corporations across industries with more than $1.27 trillion in assets under management on our SaaS platform, the opportunities for an increasing number of corporate investments in the minority community are endless."

While those numbers may come across as just statistics, the move will touch countless lives. "Together with Clearwater," Cohee says, "We are affecting real change at scale, strongly supporting the anti-racism movement, and facilitating the movement of money from large corporations to support minority communities."

Ideally, corporate investments in Black-owned banks will help build neighborhoods, strengthen communities, and offer hope to an often overlooked segment of the population. It could lead to a higher level of homeownership and may help customers build their bank accounts.

It's a win-win proposition, courtesy of companies unafraid to change the existing paradigm.