Galileo Financial Technologies, SoFi Technologies‘ Technology Platform (NASDAQ: SOFI), has launched Deposit Sweep. It enables fintechs to partner with a network of participating banks and a deposit sweep provider to offer their customers the opportunity to maximize interest earnings and extend FDIC insurance coverage.
Galileo facilitates the data exchange and reporting framework for fintechs collaborating with a deposit sweep provider, identifying customer accounts designated for deposit sweeping. By automating funds transfers above a defined threshold, Galileo Deposit Sweep may optimize customer returns while maintaining liquidity.
Through Galileo Deposit Sweep, fintechs can directly partner with a leading provider of deposit solutions to U.S. financial institutions, choosing banks within its network based on pricing, regulatory and operational constraints, and interest rates. Galileo provides the reporting and data exchange infrastructure fintechs need to implement deposit sweeps, ensuring seamless transfers of excess funds into designated high-yield accounts.
This product is available exclusively to fintech clients where Galileo manages the ledger, and their sponsor bank supports deposit sweeps.
“Galileo Deposit Sweep empowers fintechs to deliver more competitive returns for their customers by leveraging a network of participating banks and a deposit sweep provider,” said David Feuer, CPO at Galileo. “This solution enables fintechs to offer better interest rates without increasing operational complexity.”
“Working with Galileo to enable (it) was seamless, allowing us to quickly bring the benefits of increased FDIC insurance and higher returns to our customers,” said Herman Man, CPO at Bluevine. “Our business customers rely on us for security and value, and Galileo’s support has been instrumental in enhancing our offerings and delivering on that promise.”
Key benefits
Operational efficiency: Integrates with existing systems, allowing fintechs to manage cash sweep instructions and interest payouts without manual intervention.
Automated fund optimization: Excess cash above a defined threshold is transferred to high-yield accounts, offering improved interest returns for fintech account holders while maintaining liquidity.
Extended FDIC coverage: Galileo’s collaboration with a deposit sweep provider enables fintechs and their participating sponsor banks to extend FDIC insurance on swept funds, offering enhanced protection, particularly for SMBs with balances exceeding the standard FDIC coverage limit.
The product is structured to fully comply with FDIC requirements and relies on a network of FDIC-insured banks to accept deposits, with automated sweeps that keep funds within FDIC insurance limits. It maintains accurate records of deposits, ownership, and beneficiaries, providing transparency and ensuring compliance with FDIC regulations.
Scalable flexibility: Fintechs can offer it as an opt-in service or automatically enroll all customers, depending on their preferred approach. The Fintechs manage consent and customer preferences — including which network bank funds can go to — and pass that information to Galileo to facilitate the process. Account holders continue to see their full balances while funds and interest earnings transfer seamlessly in the background, delivering a frictionless experience for end users.