PROVIDENCE – Connecticut-based Liberty Bank on Monday launched Owners Bank – a “digital bank” targeting small businesses in Rhode Island, Connecticut, Massachusetts and Pennsylvania.
“We chose our first states after extended demographic research,” said Owners Bank CEO and founder David Mitchell. “We wanted to know where there were the most small businesses with fewer than five employees that needed the most help. And those were the most saturated states. They came up the highest.”
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Owners Bank specifically will target regional clients in the professional services and home service industries, focusing on proprietors in the construction, plumbing and landscaping. They’ll also take on some firms in law, marketing and design.
As a new entity, Owners Bank will function as a division of Liberty Bank, which holds $7 billion in assets.
Owners Bank will have no brick-and-mortar branches. Services will only be provided through an online portal. Tools to help manage small-business finances, including invoicing, bill payment, cash flow matters and a range of accounting functions will also be offered, according to the news release. Business loans and credit opportunities for small businesses should be available starting in mid-2023.
The lack of physical offices in digital banking usually translates to lower overhead, which results in better rates and lower fees. All banking features and services are accessed through the bank’s website from a computer or smartphone. Digital banks are sometimes referred to as “neobanks.”
“We created Owners Bank to fill a major gap in the banking industry by providing tools designed to help small business owners knock out financial tasks, so they can get back to running their businesses,” Mitchell said. “We’re here to fix the systemic issues in banking that small businesses have faced in every transaction.”
Big banks don’t usually want to handle small accounts, Mitchell said.
“The bigs want to lend out $50 million at a time. If someone wants to borrow less than $250,000, the big guys are indifferent, Mitchell said. “We want to help the small guy. If a blue collar guy needs money to buy a new truck, Owners is here for them.”
Owners Bank will also offer P2P payments through its application. Unlike Zelle, the Owners option will not be through the big banks, he said.
“We’ll also offer electronic invoicing and digital payments as well as something called account aggregation, which collects all of a business’s different accounts into one view within one Owners Bank dashboard,” Mitchell said. “If the business has a Bank of America account it doesn’t want to move, or a business loan with another institution, you can see it all in one place.”
Mitchell is a 20-year banking veteran with extensive experience in fintech, including digital online and mobile banking, app development, and digital payment services. He most recently served as executive vice president and chief digital officer at Liberty. Previously, Mitchell was president of NYMBUS, a provider of cloud-based software-as-a-service products to fintech markets.
Established in 1825, Liberty Bank claims to be one of the oldest and largest independent mutual bank in the country. Based in Middletown, Conn., it has 56 outlets across the Nutmeg State and one in Massachusetts.
According to a 2022 study prepared by Deloitte, almost every bank in the U.S. saw a spike in digital banking during the pandemic. Customers particularly took to the convenience of remote check deposits. But for complex and involved transactions, many of the customers surveyed by Deloitte said they wanted in-person interactions.
“Our clients don’t have time to go to bank branches,” Mitchell said. “They need high touch — businesspeople to talk to. We have all of our bankers at Liberty’s headquarters. Clients can text, chat, or video chat with them about anything. They’ll always be able to talk to a knowledgeable human being.”
Sam Wood is a staff writer at PBN. Contact him at Wood@PBN.com
