U.S. banks are investing in health care payments technology companies to diversify revenue. 

The points of convergence between fintechs and healthtech companies are increasing, especially in the United States.  

Employing fintechs with billing or insurance capabilities, for example, can limit middlemen and costs in the health care payments system, Asaf Charnilas, principal investor at Tel Aviv-based VC firm Team8, told Bank Automation News.

This is leading U.S. banks to eye healthtech investments. 

“Banks don’t buy things to make things easy for the customers. … Banks buy things so they can make more money,” Alyson Clarke, principal analyst at global market research provider Forrester, told Bank Automation News. 

The following banks have made recent healthtech payments investments: 

• U.S. Bank bought Tempe, Ariz.-based health care fintech Salucro Healthcare Solutions on Aug. 22 to make health care payments and billing easier for patients, according to a U.S. Bank release. The value of the deal was not undisclosed. The $669 billion bank was one of the first banks to provide small business loans with almost instant approvals, Clarke said, adding that its “tech stack and tech opportunities could be very applicable for an outdated industry” like health care.

• The $181 billion KeyBank invested an undisclosed amount in San Francisco-based Zentist on Sept. 11 to help streamline dental insurance claims, according to a KeyBank release. “We are big in the health care space and [over the years] have made a number of investments in health care,” Jon Briggs, head of commercial product and innovation at KeyBank, told BAN. “A health care company has convergence of software and financial services” and while working with such companies, KeyBank aims to embed its banking capabilities into their workflows and offerings. 

• The $212 billion Fifth Third Bank acquired Milwaukee-based Big Data Healthcare in May 2023 for an undisclosed amount to simplify health payments, according to release at that time.  

• Pinnacle Bank, the $8 billion bank based in Lincoln, Nebraska., has been working with digital lending solutions provider Epic River, based in Fort Collins, Colo., for nearly a decade to provide automated health care loans to customers, Melissa Grovijohn, director of cash management, told BAN.  Health care originations have increased in that time at Pinnacle Bank and make up a sizeable portion of its revenue, she said. Grovijohn said the bank does not disclose how much revenue or originations come directly from health care lending. 

Health care pays 

Financial institutions are investing in the health care industry not only to diversify their revenue streams and use existing payments infrastructure, but also because of major macroeconomic changes, Charnilas said. 

“An aging population is one significant trend that we’re seeing definitely in the U.S., and in a lot of countries, and that requires new tools,” he said. 

Increasing adoption of digital solutions allows fintechs and banks to lean on their infrastructure and established trust to gain consumers, Charnilas said. 

Investments in health care also provide financial institutions with stability in an uncertain macroeconomic environment, Albert Crawford, chief executive and co-founder of online consumer lender BHG Financial, told BAN. “The health care space has paid — during good times and bad.”  

Despite economic cycles coming out of a pandemic, the medical industry has paid well and it “didn’t see the deterioration in credit quality like a lot of the other industries did,” Crawford said. 

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