Gulf Capital, a ‘de novo’ bank, to launch without legacy tech

Gulf Capital Bank, Houston’s first new bank to launch since 2009, will open its doors by early next year. It confirmed on Monday that it received conditional approval from the Texas Department of Banking and the Federal Deposit Insurance Corporation.

Ed Jones, CEO, Gulf Capital Bank

Ed Jones, chairman and CEO, told Bank Innovation that the new institution will focus on a local middle-market business customer base with revenues of up to $2 billion. Building a new bank from scratch was possible through a partnership with core provider Fiserv, through which Gulf Capital will be able to offer digital products and services such as online and digital banking, peer-to-peer payments through Zelle and mobile deposits.

“By taking the risk of a ‘de novo’ bank, we avoid all that technical debt and legacy problem assets,” Jones said. “We have no legacy technology holding us back, and we’re going with all state-of-the-art products that are available today, on a margin pricing basis.” In this way, the bank can readily offer digital products that are considered table stakes for financial providers today.

Core providers increasingly are making it easy to launch new banks with minimal lead time. For example, as Bank Innovation reported in April, FIS is working to help financial institutions launch their own direct-to-consumer digital-only banks in just 90 days.

See also: FIS to Help Stand Up Digital-Only Banks Within 90 Days

While Gulf Capital Bank is leaning on Fiserv and potentially other partners to enhance its product offerings, its target customers are businesses within a 15- to 20-minute drive of its only branch, according to Jones.

As a community bank, the personal networks of the founders, as well as their histories in financial and other industries, will be assets in client acquisition, Jones said. For example, Jones previously was president of Elk River Resources, a company that engages in the acquisition and development of oil and gas assets and CEO of Texas Commerce Bank, which was acquired by JPMorgan Chase 19 years ago. Meanwhile, president Jonathan Homeyer is a former executive vice president at Wells Fargo.

“There’s a real opportunity for additional custom banking services,” Jones said. “The part of the market in which we have experience on our management team — and that we’re moving into — is the commercial banking market for privately owned businesses. There are 2,100 privately owned businesses within a 15-minute drive of our location.”

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