Fintech Business Podcast: Recent Episodes

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In this episode, Alex and I had the chance to discuss:

• The convoluted tale of ALT5 Sigma, MSwipe, Stradacarte and “no KYC” cards

• Middleware provider Increase announcing it is launching a bank

• The weirdness of Fed master accounts, which are back in the headlines

• And, as always, what Alex and I just can’t let go of

And a reminder, if you’re enjoying this show, please follow, rate & review on your preferred podcast platform, as it really helps others to find the show.

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In this episode, I had the chance to speak with Wael ElSahhar, cofounder and CEO at MidLyr, and Kirsten Muetzel, founding principal & CPA at KLM Advisory. We discussed:

• The role of AI in compliance in a rapidly changing regulatory environment

• The differences in how fintechs, technology service providers, banks think about risk

• Key lessons from what the industry has seen unfold in banking as a service over the last several years

• How firms are actually using AI in compliance – and what risks AI itself may pose

• And more!

A reminder, if you’re enjoying this show, please follow, rate & review on your preferred podcast platform, as it really helps others to find the show.

And if you want to help support Fintech Business Weekly and independent journalism, upgrade to a paid subscription or reach more than 93,000+ listeners by sponsoring an episode.

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In this episode, I had the chance to speak Brian Reshefsky, founder and CEO of EDGE, the cashflow bureau helping lenders use bank transaction data across the consumer credit lifecycle, and Zuben Matthews, cofounder and CEO of consumer financial management and credit building app Brigit.

We had the chance to discuss:

• How they think about cashflow-based scoring and underwriting, from both a B2B and a consumer perspective

• Uses for cashflow data beyond lending decisions, like lead scoring, loan life cycle management, and cross sell

• The intersection of traditional bureau data and cashflow analytics

• What it means to be a CRA and why it matters

• And much more

A reminder, if you’re enjoying this show, please follow, rate & review on your preferred podcast platform, as it really helps others to find the show.

And if you want to help support Fintech Business Weekly and independent journalism, upgrade to a paid subscription or reach more than 92,000+ listeners by sponsoring an episode.

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Hey all, Jason here.

In this episode, I had the chance to speak with Maple cofounder and executive chairman Joe Flanagan. We had the chance to discuss:

• Building in the crypto space over seven years of ups & downs

• Increasing institutional adoption of cryptocurrency and stablecoins

• Maple’s new partnership with Robinhood

• And more!

A reminder, if you’re enjoying this show, please follow, rate & review on your preferred podcast platform, as it really helps others to find the show.

And if you want to help support Fintech Business Weekly and independent journalism, upgrade to a paid subscription or reach more than 92,000+ listeners by sponsoring an episode.

Get full access to Fintech Business Weekly at fintechbusinessweekly.substack.com/subscribe

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In this episode, I had the chance to speak with Cross River Bank’s chief AI officer, Pravesh Rijal, following the bank’s announcement earlier this week of its expanded partnership with Stripe to support agentic commerce. Pravesh and I had the chance to talk about:

• Cross River’s announcement this Wednesday of its expanded partnership with Stripe to support card issuing for agentic commerce

• What agentic commerce actually looks like for the different stakeholders in a transaction

• How Cross River and Stripe’s new capabilities address some of the risks of delegating transactions to agents

• How frontier developments like the ones Cross River is working on impact everyday consumers and businesses

• And more!

A reminder, if you’re enjoying this show, please follow, rate & review on your preferred podcast platform, as it really helps others to find the show.

And if you want to help support Fintech Business Weekly and independent journalism, upgrade to a paid subscription or reach more than 92,000+ listeners by sponsoring an episode.

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In this episode, Alex and I had the chance to discuss:

• What industry stakeholders — fintechs, banks, and debt capital providers — can learn from the abrupt collapse of SMB credit card startup Parker card

• Prediction market grab bag: Polymarket allegedly ran fake ads, Meta plans to launch “Arena,” the CFTC proposes a rule

• The debanking debate just won’t go away

• And, as always, what Alex and I just can’t let go of

And a reminder, if you’re enjoying this show, please follow, rate & review on your preferred podcast platform, as it really helps others to find the show.

And if you want to help support Fintech Business Weekly and independent journalism, upgrade to a paid subscription or reach more than 92,000+ listeners by sponsoring an episode.

Get full access to Fintech Business Weekly at fintechbusinessweekly.substack.com/subscribe

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In this episode, I had the exclusive chance to chat with Current’s CEO Stuart Sopp and CTO Trevor Marshall on the company’s $80 million Series E, led by Springcoast Partners, announced earlier today. We also discussed:

• Current’s expanded product suite and impressive 70% growth for the third year in a row

• The role AI has played across the company’s business and how Stu and Trevor think about cost discipline and “return on tokens”

• Current’s expanded financing facility with bank partner Cross River and General Catalyst

• How Stu and Trevor think about the latest wave of foreign fintechs entering the U.S.

• How the “K-shaped” economy and renewed inflation are impacting everyday American consumers

• And on building a sustainable business that’s ready for the public markets

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In this episode, Alex and I had the chance to discuss:

• Why seemingly every bank, crypto, and stablecoin company wants to become a bank (and what it could mean for their valuations)

• A return to BaaS Island: CFSB’s consent order, and how it compares to those of other fintech partner banks

• President Trump’s fintech- and banking-related executive orders

• And, as always, what Alex and I just can’t let go of

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In this episode, I had the chance to chat with Edward Woodford, the founder and CEO of crypto, stablecoin, and tokenization infrastructure platform zerohash. Edward and I had the chance to talk about:

• Why zerohash is applying for a national trust bank charter

• How the CLARITY Act (crypto market structure legislation) may impact the U.S. crypto industry

• What Edward is hearing from non-financial industry execs about crypto, stablecoins, tokenization, and blockchain

• Thinking about crypto as an “asset class” vs. crypto as “software”

• The potential synergies between crypto/stablecoins and AI agents

• What keeps Edward up at night and what he’s most excited about

• And much more!

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In this episode, I had the chance to chat with merchant connectivity platform Knot’s cofounder and CEO Rory O’Reilly. Rory and I had the chance to discuss:

• Rory dropping out of Harvard to start his first company

• How Knot became the industry’s go-to solution for card switching

• Expanding from its initial card switching product to building the merchant connnectivity layer, and how Knot complements other core fintech infrastructure

• Hitting a 100 million API call per month milestone

• Knot’s international expansion to Canada and Latin America

• And much more!

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In this episode, Alex and I had the chance to discuss:

• If there’s one idea fintech founders can’t quit, it’s solving personal financial management. There’s a new wave of AI-powered tools. But can they solve some of the fundamental challenges that have prevented a breakout company from emerging in the category?

• Bolt, the one-click checkout turned financial “super app,” is in headlines, again, with further layoffs and as it struggles to pay its vendors. Why Americans don’t really want a “super app.”

• Congress actually tries to legislate: the bipartisan PACE Act could offer a pathway for non-banks to have direct access to payment rails. But, even if it were to become law (a big if), as a layer on top of existing requirements and at a time when getting a bank charter seems easier than ever, is the PACE Act fit for purpose?

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In this episode, Alex and I had the chance to discuss:

• Rent rewards and neighborhood loyalty startup Bilt’s rocky transition from Wells Fargo to Column and Cardless

• The “graduation problem” in banking-as-a-service

• The New York legislature’s decision to

• And, as always, what Alex and I just can’t let go of

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In this episode, I had the chance to chat with Tyler Allen, the chief operating offier at Unit21. We had the chance to discuss:

• How fintech, financial crimes compliance, and software engineering have evolved since Tyler joined Unit21 back in 2019

• The limitations of addressing compliance challenges by throwing bodies at them

• How regulators are thinking about agentic AI

• What an AI-first approach to compliance looks like

• And much more!

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In this episode, I had the chance to chat with S.P. “Wije” Wijegoonaratna, the cofounder and CEO of Aliya Financial Technologies. We had the chance to discuss:

• The challenges different segments of consumer lenders are facing today

• How AI-powered infrastructure is fundamentally reshaping how financial institutions think about making decisions

• How Aliya is thinking about its go-to-market approach

• How Aliya can help banks improve their returns

• What folks who have never worked in lending through a true credit cycle/recession should know

• And much more!

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In this episode, Alex and I had the chance to discuss:

• Block’s plan to sell access to its proprietary Cash App credit score

• So-called “no KYC” crypto cards

• Stablecoin infrastructure firm Bridge’s apparent derisking

• The brewing internecine fights over regulating prediction markets

• And, as always, what Alex and I just can’t let go of

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In this episode, I had the chance to chat with Modern Treasury cofounder and CEO Matt Marcus, as well as the company’s recently joined lead counsel, Matt Janiga. We had the chance to discuss:

• Modern Treasury’s newly launched payment service provider offering

• What kinds of companies can benefit from payment orchestration

• Use cases driving the explosive growth of stablecoins

• How Modern Treasury thinks about building in the rapidly evolving stablecoin space

• And much more!

Those wanting to learn more about the payments orchestration space, including stablecoins, can find the Modern Treasury Journal, which Matt Janiga mentions in the episode, here.

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Hey all, Jason here.

Alex Johnson, creator of the Fintech Takes newsletter, and I are happy to bring you the latest episode of our monthly podcast, Fintech Recap, where we unpack some of the biggest stories in fintech, banking, and crypto.

In this episode, Alex and I had the chance to discuss:

• The HBO drama “Industry” tackles banking and fintech and it gets dark (SPOILER WARNING)

• Coinbase CEO Brian Armstrong rug pulls crypto market structure legislation

• Are proposals for a 10% credit card cap and the re-emergence of the Credit Card Competition Act mere bargaining chips?

• Affirm applies for an ILC charter

• Capital One to acquire expense management and corp card startup Brex

• And, as always, what Alex and I just can’t let go of

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In this episode, I had the chance to chat with Castellum.AI’s cofounder and CEO, Peter Piatetsky about what has undeniably been one of the hottest topics in fintech, banking and compliance: agentic AI. Peter and I had the chance to discuss:

• How compliance leaders should approach evaluating agent-based solutions.

• What regulators are signaling when it comes to adoption of AI agents and how to turn those signals into governance, documentation, and examiner-ready controls.

• How firms should think about model governance as it relates to agents.

• How Castellum.AI’s agents are powering AML/KYC workflows.

• How agents will reshape compliance programs over the coming years.

• And more!

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Alex Johnson of Fintech Takes and I had the chance to discuss the WILD story of Y Combinator- and Coinbase-backed Kontigo:

• Some context setting and clarifications on the difference between AML vs. sanctions and the impact of sanctions on the everyday people of the countries they’re enforced against

• Explaining Kontigo’s retail user service and its value proposition

• Talking through what also was happening behind the scenes to make Kontigo’s service possible

• The responsibility of “infrastructure” providers, like Rain, Checkbook, Bridge, and Stripe, as well as underlying bank partners, which include JPMorgan Chase and Lead Bank

• The parallels between “stablecoin infrastructure” and banking-as-a-service, including third-party risk management (TPRM)

• What lessons industry should learn from the Kontigo situation

• And, as always, what Alex and I just can’t let go of (about this story)

This episode is brought to you by Spade. Leading banks and fintechs use Spade’s transaction enrichment API to improve authorization, personalize rewards, and build smarter AI models on clean transaction data. Learn more at spade.com.

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In this year-end episode, Alex and I took a look back at major themes and stories from 2025 and look ahead to 2026. We had the chance to discuss:

• The major shifts in the US banking regulatory landscape

• The explosive growth of interest in stablecoins

• Open banking’s setbacks

• Why everything seems to be gambling now

• Fintech IPOs

• Our predictions for 2026, such as they are

• And, as always, what we just can’t let go of

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In this episode, Alex and I had the chance to discuss:

• The latest developments in the “do over” of the CFPB’s open banking rule

• Apple’s fledgling Digital ID

• Green Dot going private

• And, as always, what Alex and I just can’t let go of

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Alex Johnson, creator of the Fintech Takes newsletter, and I are happy to bring you the latest episode of our monthly podcast, Fintech Recap, where we unpack some of the biggest stories in fintech, banking, and crypto.

This episode is brought to you by Cross River Bank, the bank behind the bold.

In this abbreviated episode, Alex and I had the chance to discuss:

• The 14,000 or so comments on the CFPB’s open banking do over

• Erebor’s conditional charter approval

• And, as always, what we just can’t let go of

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Hey all, Jason here.

In this episode recorded live in Las Vegas this Tuesday during Money20/20, I had the chance to talk with Oscilar cofounder and CEO Neha Narkhede. We had the chance to discuss:

• Neha’s background as co-creator of Apache Kafka and cofounder of Confluent, which eventually scaled to a $10 billion IPO

• How Oscilar is helping both fintechs and banks — including household names like Sofi — to power real-time risk stacks

• Thinking about risk as a data and AI problem

• Why organizations need to move beyond point solutions and data silos to manage risk effectively

• The importance of real-time decisioning across the customer lifecycle, from onboarding/KYC to fraud, credit risk, and transaction monitoring

• And more!

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Hey all, Jason here.

In this episode, I had the chance to talk with Brian Reshefsky, founder and CEO of cashflow analytics platform EDGE, Timothy Li, cofounder and CEO of orchestration platform LendAPI, and Vincent Zhang, chief growth and strategy officer at Braviant Holdings. We had the chance to discuss:

• How different stakeholders across the lending value chain are driving change

• What goes into transforming raw transaction data into something that is usable in the underwriting process

• How cashflow data can be used to help underwrite borrowers across the credit spectrum

• How leveraging cashflow data can improve lenders’ bottom line

• And more!

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In this episode, I had the chance to talk with Unit21’s head of product Kunal Datta. Kunal and I had the chance to discuss:

-The recent guest post Kunal published in Fintech Business Weekly

-The new fintech playbook: eliminating work instead of just streamlining it.

-How fintechs use AI to differentiate by solving for frequency instead of friction.

-How fintechs, banks, and credit unions are using AI to automate financial crime operations.

-How to think about AI automating manual work in financial services.

-And more!

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In this episode, I was joined by Charles Calomiris, Henry Kaufman Professor Emeritus of Financial Institutions in the Faculty of Business and Professor Emeritus of International and Public Affairs at Columbia Business School, Stephen Haber, A.A. and Jeanne Welch Milligan Professor, Senior Fellow at the Hoover Institution and at the Stanford Institute for Economic Policy Research, Professor of History and, by courtesy, of Economics at Stanford University, and Kiah Haslett, bank reporting veteran and creator of the Fintech Takes Banking newsletter.

Charles and Stephen are the authors of 2014’s excellent comparative analysis of banking and political systems, Fragile by Design, which informed our discussion and I highly recommend anyone involved in financial services read if they haven’t already.

Charles, Stephen, Kiah, and I had the chance to discuss:

• The nature of the “Game of Bank Bargains”

• Why Canadians love their banks

• Some of the underlying reasons behind the growth of the shadow banking system in the US

• Charles’ argument that Biden-era regulators were staunchly opposed to innovation in the banking system and why he thinks that former acting Comptroller Michael Hsu was “a complete hack”

• Why young people should pay more attention to the fiscal decisions coming out of Washington

• The risks of “progressive ideology” and why more government may not be the answer

• And much, much more

You can find more of Charles’ work here and and Stephens’ here. More information on the Hoover Institution, including the ability to sign up for its newsletter, here.

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This episode was recorded live during last week’s MX Money Experience Summit in Park City, Utah. During the event, I had the chance to sit down with Brian Reshefsky, founder and CEO of cashflow analytics platform EDGE, and Matt West, chief revenue officer of open banking infrastructure company MX. We had the chance to discuss:

• What makes EDGE unique among cashflow analytics platforms, including its ability to help lenders make better use of their first-party data

• How EDGE works with open banking data companies like MX to power a variety of use cases across the borrower lifecycle, from customer marketing to underwriting and servicing

• How cashflow data helps lenders better understand risk across the credit spectrum

• Why EDGE decided to structure itself as a credit reporting agency and what that means for lenders using its data

• and more!

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Hey all, Jason here.

Alex Johnson, creator of the Fintech Takes newsletter, and I are happy to bring you the latest episode of our monthly podcast, Fintech Recap, where we unpack some of the biggest stories in fintech, banking, and crypto.

This episode is brought to you by Fintech NerdCon, the fintech event by operators, for operators. Use promo code FBW20 to save 20% on your ticket!

In this episode, Alex and I discussed:

• If open banking is prisoners’ dilemma, Plaid defected to JPMorgan Chase. What it means and what comes next.

• The FBI is continuing to investigate embattled Evolve Bank & Trust and its bankrupt middleware partner Synapse over as much as $95 million in missing depositor funds.

• FICO is an AI company now, I guess.

• And, as always, what Alex and I just can’t let go of.

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In this episode, I had the chance to talk with Hummingbird cofounder and CEO Joe Robinson about the AI-powered compliance platform’s latest product news. Joe and I had the chance to discuss:

• The launch of Hummingbird’s new customer screening and transaction monitoring capabilities

• How financial institutions can move beyond disparate platforms and siloed data to more effectively mitigate financial crime risk

• The explosion of “AI” everything, how Hummingbird actually uses artificial intelligence, and what Hummingbird’s AI-powered capabilities empower its customers to do

• The importance of being able to adapt quickly in today’s ever-changing regulatory and threat environment

• And more!

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In this episode, Alex and I discussed:

• Open banking’s do over: parsing the advanced notice of proposed rulemaking

• Rescue ships head for BaaS Island, but what precedent does the first-ever fintech bail out set?

• The GENIUS Act, legislation to regulate and license permitted payment stablecoin issuers, is already the law of the land. Why are bank trade groups pushing back now?

• And, as always, what Alex and I just can’t let go of.

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In this episode, Alex Johnson and I discussed:

• The revelation that JPMorgan Chase intends to begin charging third-parties, including aggregators like Plaid and MX, to access consumers’ data rocked the U.S. fintech landscape last week. Alex and I unpacked what it could mean.

• Since we recorded this last week, a group trade associations, including the Financial Technology Association and the American Fintech Council, sent a letter to President Trump, essentially asking him to reconsider the CFPB’s position to abandon defense of the rule (I covered this on Sunday here.)

• In a surprising turn of events, the CFPB filed a motion in the challenge brought against the rule by a small Kentucky bank, the Kentucky Bankers Association, and the Bank Policy Institute, asking the court to pause the proceedings.

• The CFPB said it will undertake a new open banking rulemaking and expects to release an advanced notice of proposed rulemaking within the next three weeks, kicking off an “accelerated” rulemaking process. Stay tuned for Sunday, where I’ll unpack the latest developments and what they mean for open banking.

• GENIUS is law: what’s next for stablecoin issuers, banks, custodians, and consumers?

• And, as always, what Alex and I just can’t let go of.

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In this episode, Alex Johnson of Fintech Takes and I discuss:

• FICO launches new scores that incorporate pay-in-four buy now, pay later data. But will it make a difference?

• The CFPB files a statement of interest in the Synapse bankruptcy, potentially setting up a backdoor bailout to make out-of-pocket depositors whole. Does it set a bad precedent?

• A brief word on crypto mortgages.

• And, as always, what Alex and I just can’t let go of.

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Hey all, Jason here.

In this episode, I had the chance to talk with Executive Vice President and General Manager of Payments and Financial Services at BILL’s Mary Kay Bowman. Mary Kay’s career has spanned roles at Amazon, Square, Visa, and now financial operations platform BILL. We had a chance to discuss:

• BILL’s evolution from accounts payable and receivable tools, to cashflow insights and forecasting, to the wide breadth of capabilities it offers today

• Why so many businesses still use checks (really)

• Balancing the needs and preferences of payor and payee

• The persist challenges of fraud in the payments space

• The opportunities presented by AI and “agentic” payments

• And more!

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💰 Help Keep Fintech Business Weekly accessible to all: in an era where it feels more difficult than ever to parse hype from reality, I've made a conscious decision not to paywall Fintech Business Weekly.But doing the research and analysis to bring you well-informed, deeply-reported stories takes time -- and money (really, you don't want to see my PACER bill, let alone my lawyer's.)Looking to get in front of Fintech Business Weekly's 85,000+ readers and listeners? Get in touch about sponsorship options: jason@fintechbusinessweekly.comTo help keep Fintech Business weekly accessible to all, please consider upgrading to a paid subscription if you haven't already!

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In this episode, I had the chance to talk with Luke Voiles, CEO of embedded financing platform Pipe. Luke and I had the chance to discuss:

• How Pipe has evolved over time

• The kinds of platforms Pipe partners with

• Pipe’s embedded card capabilities

• Pipe’s relationship with its bank partner

• And more!

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In this episode, I had the chance to talk with Trent Sorbe, Chief Payments Officer at First International Bank & Trust. Trent and I had the chance to discuss:

• The different waves of bank-fintech partnerships and the popping of the BaaS bubble

• What some investors and bankers got wrong about the first wave of BaaS

• What’s different about First International Bank & Trust’s payments platform, Kotapay, and banking-as-a-service platform, Kavinu

• Kavinu’s first customer: online savings marketplace Raisin

• And more!

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In this episode, Alex and I discussed:

• Unpacking Chime’s IPO plans

• What the hell is going with 1033?

• The GENIUS bill advances in the Senate

• And, as always, what Alex and I just can’t let go of

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In this episode, I had the chance to talk with Arad Levertov, cofounder and CEO of buy now, pay later lender Sunbit. Arad started Sunbit 10 years ago — long before BNPL as we know it today exploded in popularity during the early days of the COVID pandemic. Arad and I had a chance to discuss:

• What differentiates Sunbit from other BNPL providers in a crowded market

• Why distribution is key in lending, particularly in BNPL

• Sunbit’s unique approach to underwriting borrowers that allows it to approve 9 out of 10 applicants

• How Sunbit stays ahead of emerging macroeconomic shifts

• And more!

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In this episode Alex Johnson, of Fintech Takes, and Jesse Silverman, of Troutman Pepper, joined me to talk about:

• Recent developments in the bankruptcy case (spoiler: Jesse isn’t a bankruptcy lawyer!)

• Who’s to blame for the Synapse disaster

• Reflections on some of the regulatory response, including former FDIC Chair Gruenberg’s effort to roll back the 2020 brokered deposit rule and the “Synapse” ledgering and reconciliation rule

• What lessons stakeholders — banks, fintechs, regulators, VCs — can and should take from this situation

• And more!

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In this episode, Alex and I discussed:

• Alex’s trip to BaaS Island: the founder/CEO of Increase seeking approval to acquire a controlling stake in a bank & the Hatch Bank’s consent order with the California DFPI

• Ryan Breslow’s return to one-click checkout / “super app” Bolt

• Crypto firms seeking bank charters

• And, as always, what Alex and Jason just can’t let go of

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In this episode, I had the chance to talk with Michele Alt, cofounder and managing director of Klaros Group and a 22-year veteran of the Office of the Comptroller of the Currency. Michele and I had the chance to discuss:

• What the opening of the “charter window” means and how fintechs should think about the opportunity

• The de novo process vs. acquiring an existing bank

• Michele and Klaro’s recent work on SmartBiz’s acquisition of United Community Bancshares and its subsidiary, Centrust Bank

• Thinking through when becoming or buying a bank makes sense vs. when it might not

• The open letter Michele coauthored alongside many other industry experts advocating for changes the federal bank regulators can make to streamline de novo bank formation

• What Michele is keeping her eye on in DC at the moment

• And much more!

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In this episode, we discussed:

• Alex and I recorded this before “Liberation Day” and thus before Klarna chose to delay its IPO; that said, our analysis of Klarna’s F-1 registration statement stands!

• A return to BaaS Island: a first-hand account of Mercury and Evolve’s abrupt public parting of ways; what other banks, fintechs, and regulators can learn from the chaotic split.

• It’s charter time: a brief discussion of SmartBiz, OakNorth, and OneMain’s progress on charters; prescient, given the news this week that Stripe has applied for Georgia’s merchant acquirer limit purpose bank (MALPB) charter (more on Stripe’s news from me here, including a copy of the public portion of its application.)

• And, as always, what Alex and I just can’t let go of.

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In this episode, I had the chance to talk with Matthew Goldman, a true expert in the card space. Matthew has done stints at Green Dot, AT&T, Bankrate, and Apto Payments, as well as starting multiple of his own ventures. Matthew currently published the CardsFTW newsletter and is the founder and managing member of boutique fintech consultancy Totavi.

We had a chance to discuss:

• Matthew’s thoughts on where fintech debit & credit card businesses stand in 2025, including if interchange alone is a sustainability business model (hint: it’s not)

• Whether or not there’s room for another big consumer fintech out there

• The changing infrastructure space, including the difference between issuer processors and program managers

• Crypto & stablecoins

• and more!

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In this episode, I had the chance to speak with ledgering, reconciliation, and compliance startup NAYA’s CEO Sherif Kozman. We had a chance to discuss:

• Why ledgering and reconciliation, especially in fintech-bank partnerships, is so dang difficult (hint: legacy cores, batch payment files & more)

• The consequences of poor ledgering and reconciliation

• Advice for banks and fintechs struggling to manage manual processes

• And more

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In this episode, I had the chance to speak Current’s cofounder and CTO, Trevor Marshall, and Cross River Bank’s Head of Strategy and Development, Hillel Olivestone. We had the chance to talk about:

• Why Current decided to build its own tech stack & what it’s enabled the company to do

• How Current and Cross River think about the “buy vs. build” debate

• The “jobs to be done” addressed by Current’s Build Card

• Current’s latest Datos Insight case study

• The beauty and resiliency of ACH flat files (yes, really)

• And more!

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In this episode, Alex Johnson and I discuss:

• The chaos in DC. What might in mean for banking, fintech & consumers? Varo Bank struggles on, with a new CEO and some additional capital. A grab bag of BNPL topics.* And, as always, what Alex and Jason just can’t let go of.

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In this episode, I had the chance to speak to Rafa Plantier, Head of Go-to-Market at Gigs, the world’s first operating system for mobile services, enabling companies, including neobanks, HR and travel platforms, and device manufacturers, to seamlessly embed phone and data plans into their products within weeks. Gigs provides an end-to-end connectivity platform with everything brands need to launch and operate their own multi-market mobile service.

We had the chance to discuss:

• The opportunity banks and fintechs see in the mobile connectivity space

• What geographies and customer segments may be more open to bundling mobile service with their financial provider

• How Rafa’s experience in banking and fintech has informed how he thinks about mobile phone service (and vice-versa)

• And much more!

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Hey all, Jason here.

Alex Johnson, creator of the Fintech Takes newsletter, and I are happy to bring you the latest episode of our monthly podcast, Fintech Recap, where we unpack some of the biggest stories in fintech, banking, and crypto.

We recorded this ~very special episode~ live during the Fintech XChange event in Salt Lake City, Utah, late last month — and were joined by Alloy Labs Alliance CEO Jason Henrichs (the more Jasons the merrier!). We had the chance to talk about:

• Revelations that the Department of Justice is investigating the Synapse catastrophe

• Patriot Bank’s BaaS-related enforcement action

• Ramp’s launch of Ramp Treasury

• Rohit Chopra’s land stand at the CFPB

• And, as always, what Alex and Jason just can’t let go of…

If you enjoy listening to this podcast and find value in it, please consider supporting me (and finhealth non-profits!) by signing up for a paid subscription. It wouldn’t be possible to do what I do without the support of listeners like you!

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This month, Alex and I had the chance to talk about:

• CBW Bank’s fights a $20.5 million civil money penalty that could “imperil” the bank’s existence

• Will the IPO window open in 2025? Chime confidentially files to go public.

• The CPFB’s parting shots: the bureau files suit against Walmart & Branch (but not partner Evolve Bank & Trust)

• And, as always, what Alex & Jason just can’t let go of

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Alex Johnson, creator of the Fintech Takes newsletter, and I are happy to bring you the latest episode of our monthly podcast, Fintech Recap. This month we had the chance to talk about:

• Our time in Washington, DC, to attend the American Fintech Council Policy Summit, FinRegLab’s AI Symposium, and a variety of other meetings

• What’s been happening on “BaaS Island,” with the Synapse bankruptcy moving into its next phase as depositors are left wondering when — or if — they’ll ever be made whole

• The CFPB’s rule defining larger participant in the digital wallet space

• …and, as always, what Alex and Jason just can’t let go of

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In this episode, I had the chance to sit down with an OG of fintech who really needs no introduction, cofounder and CEO of Affirm and PayPal Mafia member Max Levchin. Max and I had the chance to discuss:

• How Affirm designs its systems and processes to mitigate third-party risks, including service interruptions and, yes, data breaches

• How Affirm thinks about selecting its bank partners and how it works with them to meet regulatory and compliance expectations

• To what extent political and regulatory uncertainty impacts how Affirm approaches running its business

• The CFPB’s interpretive rule that treats pay-in-four buy now pay later as a “credit card” for certain purposes under TILA Reg Z

• Affirm’s recent earnings announcement

• And Affirm’s recent launch in the United Kingdom

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With the Synapse bankruptcy case seemingly nearing some kind of conclusion, impacted end users are left wondering, will they ever get their money back?

While, at this point, Synapse cofounder and former CEO Sankaet Pathak can’t really answer that question, he is able to provide greater context on what happened and why.

In this podcast, recorded as a X (formerly Twitter) livestream yesterday, November 11th, I had the chance to interview Pathak and impacted depositors had an opportunity to ask him questions directly.

Key takeaways I had from the conversation include:

• Pathak revealed that Evolve had sent him a cease and desist as a result of him posting what he says is an anonymized version of the trial balance report of the funds Evolve held for end users.

• A description of the process by which Evolve prepared and sent files to Synapse for reconciliation, including a possible reason why balances between Evolve’s systems and Synapse’s appeared to varied substantially day to day, and Evolve’s claim that this wasn’t something to worry about, Pathak said.

• Pathak said that Evolve was aware of and acknowledged that fees owed to Tabapay were improperly debited from customer funds, but that Evolve disputed whether it was the bank’s fault.

• Synapse didn’t want Synapse Brokerage to contract with Evolve or keep the Brokerage’s funds at Evolve due to the known shortfalls, Pathak said.

• The plan with the Brokerage structure, per Pathak, was that incoming funds would land in users’ DDA accounts at Evolve, a portion of those funds that users would transact with would stay at Evolve, and the rest would be swept out to AMG. However, Pathak says, in late September or early October 2023, Evolve, without explanation why, ceased processing sweeps out of Evolve to AMG.

• Pathak described how Evolve’s reversal of position on funding the FBO shortfalls led to the collapse of the deal for Tabapay to acquire Synapse’s assets and, ultimately, the collapse of the company and freeze of end user funds.

• Pathak acknowledged taking two loans from the company, one in late 2023 and one in early 2024, which totaled $320,000. The transactions, Pathak said, were approved by the Synapse board — though, at the time, the board consisted of Pathak himself, a seed round investor that, and a Synapse cofounder. While Pathak didn’t name specific individuals, per filings in the bankruptcy case, the seed investor is Doug Marchant and the Synapse cofounder is Hilary Quirk. Pathak declined to elaborate on the purpose of the loans, besides saying he had “good reasons” to do it, which would “become obvious” relatively soon.

• Full reconciliation should be possible, Pathak said, but it would require the right data, resources, people, and time.

• Pathak acknowledged anonymously leaking a letter that Synapse had sent to Evolve to me (which I suspected at the time but didn’t know until now.)

• According to Pathak, Synapse’s board of directors, which, at points, included Andreessen Horowitz’s Angela Strange, Trinity Venture’s Schwark Satyavolu, and Core Innovation Capital’s Arjan Schütte, was broadly aware of the issues Synapse faced, that they were “trying to do the right thing,” and that the board ask Pathak “not to shut down and escalate.”

• While Chapter 11 trustee McWilliams and Judge Martin Barash have made numerous references to not being able to confirm or deny if they have made any referrals to law enforcement, Pathak said that he is not aware of any criminal investigation and has not been contacted by law enforcement authorities, though he did acknowledge speaking with broker-dealer self-regulator authority Finra.

• When asked if, in the regular course of its business, Synapse had any interaction with Evolve’s regulators, the St. Louis Federal Reserve or the Arkansas Department of Banking, Pathak indicated that it did not.

Additional Context & Fact Checking

• Pathak suggested that Evolve or others not suing him for defamation should be interpreted as a sign that he’s telling the truth. However, Evolve has explicitly stated that it believes Pathak’s claims about a shortfall of end user funds and the causes of it are “based on ledgers that are demonstrably inaccurate and that his company prepared” (see FAQ #17 here.) It’s also worth noting that Evolve may have other reasons to avoid filing such a suit against Pathak — namely, that Evolve would presumably have to turn over relevant documents as part of discovery in any such suit.

• Pathak said that Synapse launched the brokerage sweep program in October 2023, in response to Evolve raising Synapse’s reserve requirement and withholding interest payments owed to end users, fintech programs, and Synapse. However, the Synapse Brokerage entity had been up and running for sometime by this point, and Synapse had been working with many of its programs to migrate them to the new structure since significantly earlier in 2023.

• Asked directly if Pathak or Synapse ever inappropriately used end user funds, including using end user funds to meet bank reserve requirements, Pathak said he was not aware of any instances of customer funds being misappropriated. Pathak described the allegation that Synapse used customer funds to meet reserve requirements at Lineage as “factually false.” However, Pathak’s answer glosses over that it was Synapse that would have instructed from Evolve to Lineage and, per my prior reporting, represented that these were Synapse’s own funds, not end users’.

• Pathak also denied that Synapse knowingly allowed fees Synapse owed to be debited from end user funds, saying that, as soon as such issues came to the company’s attention, it alerted Evolve and worked to fix them. However, Pathak did not specify if when these types of issues occurred, whether or not end user balances were made whole.

• Asked about his robotics startup’s attempt to raise funds and purported relationship with GM, first reported by me and subsequently confirmed by CNBC, Pathak described the CNBC reporter as “a piece of st” and “highly unethical,” alleging that the reporter contacted an auto industry union leader, not GM**, leading the union leader to threaten a strike if GM didn’t pull out of the deal. However, the CNBC piece quoted a GM spokesperson as saying, “GM has never invested in Foundation Robotics and has no plans to do so. In fact, GM has never had an agreement of any kind with the company. Any claims to the contrary are fabricated.” GM sent me a statement to the same effect.

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In this episode, I had the chance to sit down with James Doherty, the Head of Business Development for Financial Services at Sinch, the customer communication cloud platform that includes mobile messaging, voice, email and other emerging channel capabilities. We had the chance to discuss:

• Financial services’ key “jobs to be done” via communications channels, including acquisition, engagement, retention, and fraud prevention

• The importance of flexibility in communications strategy, including being able to meet customers where they are, whether that’s SMS, email, or emerging communications channels

• Challenges in managing communications strategy, including privacy regulation

• The role of conversational AI in customer communications strategy

• And more!

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In this episode, I had the chance to sit down with Michael Nicklas, Managing Partner at Valor Capital Group, a Brazil-based cross-border venture fund. Valor’s fintech and crypto portfolio companies include cross-border payment and trade finance network Hamsa, crypto exchanges Bitso and Coinbase, and stablecoin infrastructure company Circle, among many others. Michael and I had the chance to talk about:

• Unique aspects of Latin American that shape the market for financial services

• The role the Brazilian central bank plays in fostering progress and innovation in financial services in the country (yes, that includes Pix)

• What Valor means when it describes its investing strategy as being “cross border”

• How Valor takes into account evolving geopolitical risks as it considers its investing approach

• And more!

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In this episode, I had the chance to sit down with Kelly A. Brown, Chairman and CEO at deposit management startup Ampersand. Previously, she spent 13 years at the American Deposit Management Company. Kelly and I had a chance to talk about:

• What inspired Kelly to get into banking

• The sudden attention paid to deposit insurance in the wake of SVB’s collapse

• How FBO and deposit insurance pass through models should be structured

• Consumers’ misapprehensions about what deposit insurance does and doesn’t cover

• And more!

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Frank Rotman of QED, Jason Henrichs of Alloy Labs, and I discussed “Balancing Growth With Risk In The Post-ZIRP Era,” including touching on:

• How the extended low-interest rate environment impacted venture capital and fintech

• How the evolving regulatory climate is shaping fintechs’ and banks’ risk appetite and strategies

• What the next 12 months will look like

• And more!

Regular programming will resume next Sunday, August 4th.

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In this episode, I had the chance to sit down with Wade Arnold, cofounder and CEO of Moov, a fintech infrastructure company that enables and simplifies push and pull card payments. Moov also puts on the Fintech Devcon conference, which is August 7th-9th in Austin — more info and tickets here. We had a chance to talk about:

• What to expect at (and what I should wear to) Fintech Devcon

• Payment and core banking infrastructure in the US

• Implications of and lessons from the Synapse bankruptcy

• Reasons to be optimistic about the future of fintech

• and more!

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In this episode, I had the chance to sit down with Rhett Roberts, cofounder and CEO of API-first lending and credit platform LoanPro. Rhett and I had the chance to talk about:

• LoanPro’s recent announcement of integrating with Visa DPS (and some background for folks who might not know why that’s important!)

• LoanPro’s journey from homegrown software to powering some of the biggest lenders in fintech

• How LoanPro helps its customers stay ahead of evolving legal and regulatory issues

• How LoanPro structures its organization to ship code quickly

• and more!

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In this episode, I had the chance to sit down with Stuart Sopp, CEO and cofounder of Current. Stuart and I had the chance to talk about:

• What’s change in fintech and banking since the last time we talked in 2023 (hint: a lot)

• Current’s new products and features, including its credit builder card and an EWA-style offering

• The challenges of state-by-state licensing and importance of compliance

• Balancing the need for growth with profitable unit economics

• What’s on the road map for Current

• and more!

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In this episode, I had the chance to sit down with Nicolas Benady, the CEO of French embedded finance platform Swan, live at Money2020 Europe earlier this month. Nicolas and I had the chance to talk about:

• embedded finance and banking-as-a-service in Europe vs. the US

• what being licensed as an emoney institution enables Swan to do and how it’s different than being or partnering with a bank

• why Swan is confident in its ability to effectively oversee its third-party partners

• how Swan’s clients leverage its capabilities

• and more!

Special thanks to the entire Money2020 crew for hosting us in the MoneyPot podcast booth and putting on another great event!

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In this episode, I had the chance to sit down with John Stuart, the general manager of fintech and international at Apex Fintech Solutions, an investing and wealth management infrastructure platform. John and I had the chance to talk about:

• What the capabilities Apex provides, including custody, clearing, and execution, enable its customers to build

• How Apex scaled its platform across 150 countries

• What Apex has learned and how its refined its offering over 10+ years in market

• Some novel use cases for the infrastructure Apex has built

• And more

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Alex Johnson, creator of the Fintech Takes newsletter, and I are happy to bring you the latest episode of our monthly podcast, Fintech Recap, where we unpack some of the biggest stories in fintech, banking, and crypto.

This month we had the chance to talk about:

• Latest on Synapse bankruptcy and what it may mean for banking-as-a-service & fintech (this episode was recorded May 29th)

• Visa’s new “crebit” credential

• The CFPB’s interpretative guidance on buy now, pay later

• And, as always, what Alex and I just can’t let go of

If you enjoy listening to this podcast and find value in it, please consider supporting me (and finhealth non-profits!) by signing up for a paid subscription. It wouldn’t be possible to do what I do without the support of listeners like you!

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In this episode, I had the chance to sit down with Neepa Patel, cofounder and CEO of Themis, a compliance collaboration tool for banks and fintechs, on stage at last month’s Empire Fintech Conference in New York. Neepa and I had the chance to talk about:

• What “fintech people” misunderstand about regulators

• What fintechs should think about when selecting a bank partner

• Whether or not tech is (and should be) a competitive differentiator in banking-as-a-service platforms

“Many banks are still utilizing manual controls, processes and even spreadsheets to manage compliance and governance. We've been impressed with Themis’ collaborative and centralized modules to increase efficiency, and reduce complexities and internal costs while helping to streamline compliance controls.”

— Candice Antinori, VP Compliance Management & CRA Officer at FinWise Bank

Themis is a user friendly, collaborative compliance platform to help financial institutions manage complex relationships across internal control groups and to help fintechs’ level up their own governance, risk, and compliance cultures.

The platform provides a centralized compliance collaboration suite of purpose-built workflows and tools that seamlessly integrate risk, communications, documents and so much for internal teams and external partnerships between banks and fintechs.

With Synapse entering into bankruptcy proceedings in the last few weeks, with knock-on impacts to Evolve Bank and Trust, Lineage, and multiple fintech programs, one could easily be forgiven for thinking fintech categorically is facing a regulatory reckoning. But, current turmoil notwithstanding, the bank-fintech partnership model will endure, with the players that prioritize compliance best suited to navigate the fallout.

Learn more about how Themis banks are Elevating Governance, Risk and Compliance Cultures here.

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This month we had the chance to talk about:

• BaaS drama continues, with Piermont and Sutton receiving consent orders

• Chime has HOW MANY customers?

• Trade groups vs. Colorado on DIDMCA, or, where is an online loan “made”?

• Quick takes on the Visa/Mastercard settlement

• And, as always, what we just can’t let go of

If you enjoy listening to this podcast and find value in it, please consider supporting me (and finhealth non-profits!) by signing up for a paid subscription. It wouldn’t be possible to do what I do without the support of listeners like you!

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In this episode, I had the chance to sit down with Tommy Nicholas, CEO of identity risk solutions platform Alloy, a global, end-to-end identity risk solution for banks and fintechs. Tommy and I had the chance to talk about:

• factors impacting fraud risk today, including the growth of real-time payments and the dawn of the genAI age

• key take aways from Alloy’s 2024 State of Fraud Benchmark Report

• the difference between “frictionless” and “seamless” in financial services UX

• public and private efforts to create digital identity solutions

• what’s on Tommy’s radar in the fraud space in 2024

• and more!

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In this episode, I spoke with Michal Cieplinski, founder and CEO at CapStack.

CapStack is the first integrated operating system for banks enabling cooperation across banks and other financial services institutions in order to drive profitability and asset diversification. Michal and I had a chance to talk about:

• The importance and challenges of asset/liability management for banks

• The risks that come from asset, geographic, and sectoral concentration, especially with current concerns around commercial real estate

• How CapStack can help banks mitigate these risks

• Moving from manual, Excel-and-email-based processes to technology-powered, automated exchanges for buying and selling loan participation stakes

• and more!

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In this episode, I spoke with Jon Lear, President and cofounder of Fintech Meetup, taking place in Las Vegas March 3-6, 2024 (learn more and get your tickets here.) We had the chance to discuss:

• the crazy year in fintech and banking that was 2023

• looking for silver linings in a challenging operating and fundraising environment

• what’s in store for 2024

• key themes and topics for next year’s Fintech Meetup event

• and more!

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In this episode, I spoke with Neal Desai, CEO of lease-to-own startup Kafene. We had the chance to discuss:

• Kafene’s recently announced Series B extension

• The impact of an uncertain economic environment on Kafene’s business

• Regulatory activity in the lease-to-own space

• Where Kafene is heading in 2024

• and much, much more!

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Hey all, Jason here.

In this episode, I spoke with David Brear, CEO of challenger banking and fintech consultancy 11FS. We had the chance to discuss:

• The origin story of 11FS, including its “Pulse” and “Foundry” offerings

• Some of the most interesting client projects David has worked on

• How David and 11FS think about creating stand-out content in an extremely crowded information space

• Where David thinks banking and fintech are headed in 2024

• and much, much more!

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In this episode, I spoke with one-stop money management platform for small businesses Wave’s CEO, Zahir Khoja. We had the chance to discuss:

• Zahir’s fascinating background, including working in Afghanistan and for Grameen Foundation

• Wave’s capabilities and target segments

• How the company thinks about buy vs. build vs. partner & its pricing and cross-sell strategy

• The importance of human advice for important decisions

• and more!

If you’re interested in learning more about or entering the contest that Zahir mentioned in our conversation, you can do so here.

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The last several years have seen quite the rollercoaster of investment-related trends: meme stonks, SPACs, crypto, and now… Treasuries? Another emerging trend: generative AI. In this episode, I had the chance to sit down with investing app Public’s co-CEO Leif Abraham to talk about all of that and more, including:

• How AI for investing is and isn’t different than previous trends like PFMs and roboadvisors

• How Public got comfortable deploying user-facing AI capabilities

• Why Public ended payment for order flow (PFOF) and decided to accept “tips”

• How Public stands out in a crowded investing market

• and more!

Also, a big congrats to the Public team on today’s announcement of their expansion to the UK market!

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Hey all, Jason here.

This Sunday’s note is coming to you from Hilvarenbeek, in the south of the Netherlands, where I’m camping and attending a music festival.

During last week’s Money2020, I had the chance to sit down with compliance tech startup Cable’s cofounder and CEO Natasha Vernier. If the company sounds familiar, that’s probably because her cofounder and I recently gave a “Masterclass” together during New York Fintech Week.

Natasha and I had the chance to chat about:

• Natasha’s journey building and scaling the financial crime function at UK neobank Monzo

• How those experiences and challenges led Natasha to co-founding Cable

• The process of raising Cable’s recently announced $11 million Series A

• What Natsha is keeping an eye on from a regulatory standpoint

• Her biggest surprise about moving from the UK to the United States

• and more!

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I know it’s hard to remember now, but there was a time when BNPL — buy now, pay later — felt like the bleeding edge of consumer fintech (even if point-of-sale financing has been around for literally generations!)

It has been a wild ride for market leader Klarna, which is rather unique in the space: it was founded in 2005, it is a bank in Europe, and it has historically been profitable.

Klarna’s Chief Commercial Officer and former head of the US business David Sykes joined to discuss all that and more, including:

• If Klarna thinks of itself as a “BNPL company”

• That $46 billion valuation

• How Klarna succeed in the US, when other foreign imports haven’t

• The threat from Apple’s BNPL offering, Apple Pay Later

• and more!

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Hey all, Jason here.

I recently partnered with Cable’s Chief Product Officer Katie Savitz to present a Masterclass at the Empire Fintech Conference during NY Fintech Week. We profiled six recent developments impacting Banking-as-a-Service and how stakeholders can use technology to respond.

If you weren’t able to attend (or just need a refresher!), this podcast/post combo is for you!

(And extra great timing, as Cable today announced it raised an $11M Series A to automate effectiveness testing of financial crime controls!)

Six Key Developments in Banking-as-a-Service

The U.S. banking system is experiencing its greatest stress since the 2008 Great Financial Crisis and regulators are seeking to address risks being revealed. BaaS may make the banking system more resilient, but it also introduces new risks. Six recent developments shed light on how BaaS may evolve going forward.

• OCC Office of Financial Technology. One explicit mandate of the OCC’s Office of Financial Technology – recently formally established and led by Prashant Bhardwaj – is to support “high-quality supervision of bank-fintech partnerships,” which portends continued regulatory scrutiny, but also opportunity for industry engagement with regulators.

• OCC 2023 Bank Supervision Operating Plan. Further signaling the OCC’s increased focus on BaaS, the agency’s 2023 supervision operating plan calls for specific focus on third-party risk management and highlights BSA/AML risk.

• Acting Comptroller Hsu 2022 TCH+BPI Conference Remarks.Acting Comptroller Hsu’s speech specifically addressed the growth of BaaS operating models. Hsu expressed concern about the growing complexity associated with BaaS and reiterated the primacy of “safety and soundness” concerns, while acknowledging opportunities from technological innovation.

• November 2022 U.S. Treasury Department Report on Non-Bank Firms in Consumer Finance Markets. The Treasury Department report specifically flagged “new risks to consumer protection and marketing integrity” from fintechs and called for enhanced supervision of bank-fintech partnerships.

• CFPB Invokes Dormant Authority to Examine Non-Bank Companies. While the CFPB is focused first and foremost on consumer protection, it has shown a willingness to use its authority to supervise non-bank entities that may pose a risk to consumers, potentially including non-bank fintechs and platforms.

• OCC-Blue Ridge Bank Agreement. The OCC’s formal agreement with Blue Ridge – arguably the first major BaaS enforcement action – provided a wealth of detail about regulatory scrutiny of risks in bank-fintech partnerships, and areas of financial crime compliance tech stacks that may need uplifting.

Increasingly, growth and innovation in the banking industry is happening outside the banking regulatory perimeter and, for BaaS-focused banks, asset size is no longer a good reflection of risk.

With the sector’s growth now attracting more regulatory attention, to survive, all stakeholders need to adapt.

The era of banks onboarding fintechs with little to no insights is finished.

For bank-fintech partnerships to be sustainable, they must be done in compliance with regulatory requirements. While the knee-jerk response is to throw bodies at the problem, this not only is an expense, but also has scalability limitations. Instead, a new approach enabled by new technology is needed to make these partnerships not only possible, but profitable.

The Compliance Problem for BaaS

Rapid customer growth and disaggregated responsibilities are primary drivers of compliance breakdowns. Both factors are especially prevalent in BaaS.

In BaaS, compliance teams used to managing one institution and their own direct customer pool now have to deal with multiple fintechs, each with their own controls and indirect customer pools.

This demands a whole new level of compliance capabilities. Many banking providers still rely on legacy systems and manual processes, but those are no longer fit for purpose.

As a result, regulators are already focused on this question for bank-fintech relationships: Who is responsible for what when things break?

The Fincrime Tech Stack & Why Effectiveness Matters

Over the last decade in BSA/AML compliance, banks and fintechs have added more controls, with little idea about how effective they are. Over $270 billion is spent worldwide each year on financial crime compliance, with the majority of that spent on people.

Despite this spending, less than 5% of accounts are tested to understand effectiveness. If banks can't even be sure how effective their own controls are, how can they do that for their fintechs?

But this same exact approach is being used in BaaS – partner banks are adding more fintechs with little idea how effective their controls are, even as the compliance challenges multiply.

Increasingly, regulatory pressure is demanding that you be able to “show, not tell” that your program is effective. Compliance teams need to ask: What part of your tech stack helps you answer questions about effectiveness?

In BaaS, technology solutions for oversight, monitoring, and assurance are essential. For banks, how do you know everything is working at all levels across their fintechs? And for fintechs, how do you reassure bank partners everything is fine?

How can you understand risk better?

The first key compliance task in BaaS is understanding risk better: banks’ own risk, fintechs’ risk, and how fintech risk impacts banks’ risk. Below are practical tips and steps to achieve this:

Bank risk

• Review your own risk assessment more than annually, as circumstances can change quickly in BaaS.

• Update your risk assessment when control failures are discovered, so that you can discuss priorities with senior management.

• Leverage available risk assessment technology solutions to get out of spreadsheets and onto a smarter platform with better workflows.

Fintech risk

• Banks should require fintechs to perform a risk assessment using the same methodology and should collect standard information and documents from each fintech, in order to compare and understand risk across the bank’s fintech portfolio.

• Fintech risk assessments should also be easily updated for changes in circumstances at the fintech level.

• Consultants can provide templates and methodologies, and technology platforms can help with document collaboration. Cable also offers the ability to collect company information and documents, and conduct the same risk assessment for each fintech.

Bank and fintech risk

• Banks should incorporate their fintechs’ risk into the bank’s own risk.

• Banks also need to understand how each new fintech affects their current risk profile and any impacts to their risk appetite.

• Some compliance teams have built out complicated spreadsheets with the help of consultants to do this. Cable also offers the ability to roll up fintechs’ risk assessments into a bank’s risk assessment.

How can you improve oversight and monitoring?

The second main compliance task in BaaS is oversight and monitoring of controls. Below are practical tips and steps to improve these processes:

Identify controls

• Banks and fintechs should have a shared understanding of the controls in place at each fintech.

• Banks should request a controls register as part of standard onboarding documentation collection from fintechs.

Assess control effectiveness

• To the effectiveness point, partner banks must sufficiently monitor and test accounts to understand how all the controls are working at the fintech level.

• Key questions to address include: What data is needed by the bank to conduct oversight? How will data be sent or received timely, and in what format? If supplemental data or information is needed, how will the bank get that promptly? What do each of the bank and fintech need to do to facilitate data sharing?

• Both banks and fintechs need to have a team and technology to handle this monitoring, especially as the bank's fintech program scales.

• Technology like Cable offers automated oversight and assurance processes to identify regulatory breaches and control failures in real-time across each fintech.

Fix and report issues

• Banks and fintechs need to quickly remediate and report any issues, promptly after they happen instead of finding issues months later in periodic audits.

• Banks and fintechs should ensure they have shared issue management tools that give visibility to both sides, as fintechs will most often remediate issues.

• Banks and fintechs should define roles and responsibilities, and have shared understandings of issue prioritization, so the right issues receive proper attention.

BaaS is here to stay, but operational work will overwhelm banks and fintechs unless automated effectiveness testing becomes commonplace. Partner banks need to deeply understand their requirements and deploy technology solutions to enjoy the trifecta of full compliance, resource efficiency, and fast onboarding to grow their fintech programs.

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Hey all, Jason here.

Weren’t in New York or couldn’t make it to this event at Barclays Rise during New York Fintech Week? You’re in luck!

For this panel discussion tackling the question, What Next for BaaS?, I was joined by:

• Amanda Swoverland, Chief Compliance Officer at Unit

• Walt Cox, Head of Partner Banking at Valley Bank

• Neepa Patel, founder/CEO at Themis

• and Nick Farrow, Head of Bank Partnerships at Modern Treasury

We discussed:

• how to define “banking-as-a-service”

• how banks/platforms think about selecting what partners to work with

• how stakeholders work together to manage risks and ensure compliance

• whether and how regulation of BaaS could be improved

• and much more!

Many thanks to Valley Bank and Unit for sponsoring the event and to Barclays Rise for hosting us!

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Hey all, Jason here.

Well, there was no shortage of late-breaking news on Friday — like the Fed’s report on SVB’s failure, the FDIC’s report on its supervision of Signature, and what appears to be the collapse of troubled First Republic Bank.

Given you’ll have no shortage of content covering those developments (and to give me time to read all of them and develop an informed opinion), I’m bringing you something else entirely this Sunday morning.

While in New York for NY Fintech Week, I had the chance to sit down with Current’s cofounder and CEO Stuart Sopp. We discussed:

• How Current is differentiating itself in a crowded market

• Current’s unique marketing activations, including partnership with YouTuber MrBeast

• Whether or not an interchange-dependent business model is sustainable

• Why Current built its own tech stack and the benefits of doing so

• Current’s plans to launch credit products, beginning with a secured card

• and much more!

Speaking of NY Fintech Week, I had an amazing and productive time in the city. Many thanks to everyone who worked hard to organize events during the week, including Empire Fintech and especially Jon Zanoff.

I had the chance to participate and speak at a number of events, including at Barclays Rise, alongside Walt Cox (Valley Bank), Amanda Swoverland (Unit), Nick Farrow (Modern Treasury), and Neepa Patel (Themis); at Empire Fintech Conference alongside Cable’s Chief Product Officer Katie Savitz; and with Unit21’s Aditya Vempaty and Alex Faivusovich, Bangor Savings Bank’s Diane Porter, and Modern Treasury’s Jeff Nowicki.

Keep an eye out for some additional podcasts from the events in the coming weeks. Until then, here’s a couple quick shots wrapping up a great week:

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Welcome back to Fintech Business Podcast. In this episode, I talk to Jesse Silverman, formerly an attorney at the Connecticut Department of Banking and the Consumer Financial Protection Bureau, before working in legal roles at fintechs like LendUp, Steady, Nuula, and his present role at payments platform Highline.

We had a chance to talk about:

• Our time working together at failed startup LendUp, what we learned, and lessons other companies should take away from it

• Why regulators always seem to be trailing behind innovation in financial services

• Whether or not fintech is actually “expanding access and inclusion” or “democratizing” anything

• The CFPB under Director Chopra

• and more!

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In this episode, I talk to Shmulik Fishman, the founder and CEO at Argyle. Argyle provides payroll connectivity infrastructure that powers solutions like income & employment verification, deposit switching, payroll-linked lending and earned wage access.

We had a chance to talk about:

• Top take aways from last week’s Fintech Meetup conference in Las Vegas

• Thinking through the fallout from SVB, Signature, First Republic & more

• How payroll data and connectivity can improve lenders’ ability to underwrite

• The differences (and similarities) between “open banking” and payroll connectivity

• The opportunity from achieving improved regulatory clarity

• and more!

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In this episode, I talk to Alex Baydin, founder and CEO of PerformLine, a platform for regulatory and compliance monitoring for brand marketing.

We had a chance to talk about:

• The complexity of managing marketing compliance in today’s digital advertising ecosystem

• Managing workflows and communication in fintech/Banking-as-a-Service relationships

• Key takeaways from analyzing millions of CFPB complaints

• What Alex is keeping an eye from a regulatory perspective this year

• and more!

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In this episode, I talk to Kurt Lin, cofounder & CEO of Pinwheel, a fintech infrastructure company that enables startups and banks to make sense of real time income and employment data.

We had a chance to talk about:

• Where the “Plaid for payroll data” analogy breaks down

• The greater complexity of the payroll and employment data vs. bank account data

• Opportunities and risks for integrating payroll and employment in underwriting and managing credit

• Evolving macroeconomic risks

• and more!

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In this episode, I talk to Alain Meier, the Head of Identity at Plaid. While I imagine most readers/listeners are pretty familiar with Plaid’s core capabilities, the company moved into the identity verification space through its acquisition of Meier’s startup Cognito about a year ago.

We had a chance to talk about:

• Alain’s experiencing starting and selling Cognito

• Use cases for identity verification outside of financial services

• Emerging identity tech, like mobile driver’s licenses

• The potential and challenge of “self-sovereign” and decentralized identity

• and more!

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In this episode, I talk to Michael Sindisitch, EVP & Head of TripActions Liquid, an end-to-end travel, expense, and corporate card solution.

We had a chance to talk about:

• TripActions recent $300 million equity raise & $400 million credit facility

• TripActions unique capabilities vs. others in the travel or expense management spaces

• How TripActions thinks about the competitive landscape

• TripActions’ experience during COVID and the travel rebound as the pandemic wanes

• and more!

If you’re interested in sponsoring an episode or appearing as a guest, drop us a line.

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In this episode, I talk to Scott Sanborn, CEO of “OG” fintech LendingClub, which made the transition from being a fintech “peer-to-peer” lender to acquiring and becoming a bank.

We had a chance to talk about:

The factors that drove LendingClub to become a bank; what lessons today’s fintech (and crypto) companies can learn from the challenges LendingClub has navigated; how LendingClub is responding to the changing economic climate; the opportunity and impact of “alternative data,” like cashflow-based underwriting, and novel products, like earned wage access; and more!

Special thanks to episode sponsor TripActions, the end-to-end travel, expense management, and corporate card solution.

If you’re interested in sponsoring an episode or appearing as a guest, drop us a line.

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In this episode, I talk to Hristo Borisov, cofounder and CEO at Payhawk, a spend management solution enabling mid-sized businesses to spend and scale globally.

We had a chance to talk about: Payhawk’s strategy to compete in the increasingly crowded expense management space; how Payhawk’s business and revenue models compare to competitors; lessons learned from scaling Payhawk into 32 countries; differences of building for the US market vs. the European market; and more!

If you’re interested in sponsoring an episode or appearing as a guest, drop us a line.

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One last very special podcast from Money20/20. In this live episode, I was joined by David Sinsky, VP of Lending at Unit, Jarad Gilmore, Head of Partnerships at Middesk, Emanuel Pleitez, Head of Business Development at Finix, and Nikhil Sachdev, Managing Director at Insight Partners.

In the spirit of Las Vegas and the game night event this was recorded at, we took a gamble on making our best predictions for 2023 on the following topics:

How the macroeconomic climate will impact banking and fintechWhat fintech fundraising and valuations will look likeHow Big Techs’ efforts in fintech and banking will unfold

I want to extend a huge thank you to the guests, the event hosts Unit, Middesk, Finix, and Insight Partners, and the teams behind the scene that made this possible — thank you!

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In this episode, I talk to Rex Salisbury, Founder and General Partner at Cambrian Ventures.

We had a chance to talk about:-becoming an accidental community builder-the backstory of Cambrian Ventures-Rex’s experience at renowned VC firm Andreessen Horowitz-working with founders at the earliest stages-the rise of emerging managers & the “Solo GP”…and more!

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In this episode, I talk to Trisha Kothari, co-founder and CEO of fraud and AML infrastructure platform Unit21.

We had a chance to talk about:

• Why breaking data out of silos is key to effective fraud risk management

• Unit21’s biggest takeaways from 230+ conversations with fraud and AML professionals

• Why enabling fraud professionals to manage models and rules without requiring engineering support is a game changer

• How the regulatory environment — including around BaaS — is impacting Unit21’s customers

• …and more!

If you’re interested in sponsoring an episode or appearing as a guest, drop us a line.

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Welcome back to Fintech Business Podcast. In this episode, I talk to Neal Desai, co-founder and CEO of lease-to-own startup Kafene — which just announced it has raised an $18 million Series B. Congrats to Neal and the entire Kafene team!

We had a chance to talk about:

How lease-to-own works & how it’s different than BNPL

What’s “fintech” about Kafene vs. legacy players like Aaron’s and Rent-a-Center

How Kafene’s lease-to-own can actually be cheaper than credit cards

How Kafene underwrites risk and handles customers who can’t pay

and more!

If you’re interested in sponsoring an episode or appearing as a guest, drop us a line.

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Hey all, Jason here.

Welcome back to Fintech Business Podcast. In this episode, I talk to Soups Ranjan, co-founder and CEO at Sardine, a fraud prevention and compliance infrastructure startup. We had a chance to talk about:

How technology can enable faster, safer money movement

Sardine’s unique approach of taking on the fraud risk of its customers

The trade-offs in reducing friction in financial apps

and more…

If you’re interested in sponsoring an episode or appearing as a guest, drop us a line.

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Hey all, Jason here.

This Sunday, I have a “hybrid” post for you — both regular newsletter content and a special podcast conversation about banking-as-a-service and regulation, with guests Sankaet Pathak, co-founder and CEO of Synapse, and Shaul David, Head of Banking at Railsr.

We had a wide-ranging conversation about the space, including:

How banking-as-a-service can help bank/fintech partnerships to scale

Why some banking-as-a-service platforms want to be regulated

How to ensure customers funds are protected when a fintech (or bank, or e-money institution) fails

Predictions for the future of banking-as-a-service

and more

Click “Listen Now” above or find the show on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to pods.

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How Do Goldman Sachs’ CFPB Complaints Stack Up?

Last week, we learned that the CFPB is investigating Goldman Sachs, which issues co-branded cards with Apple and General Motors, over its “credit card account management practices, including with respect to the application of refunds, crediting of nonconforming payments, billing error resolution, advertisements, and reporting to credit bureaus.”

Now, CNBC is reporting one possible source of the scrutiny is how Goldman handles chargebacks on its cards. Per CNBC (emphasis added):

“When an Apple Card user disputes a transaction, Goldman has to seek a resolution within regulatory timelines, and it sometimes failed at that, said the people, who requested anonymity to speak candidly about the situation. Customers were sometimes given conflicting information or had long wait times, the people said.

Goldman got more disputes than it counted on, said one source. ‘You have these queues that you need to clear out within a certain amount of time. The business was getting so big, suddenly we had to create more automation to deal with it.’

…Regulators are focused on customer complaints from the past few years, and the biggest source of those came from attempted chargebacks…”

The Fair Credit Billing Act (FCBA) requires card issuers to acknowledge receipt of a dispute within 30 days and to investigate and resolve them within two billing cycles (not to exceed 90 days).

Goldman Sachs’ Most Common Complaints

Since launching its first credit card, the Apple Card, in August 2019, consumers have lodged just over 1,300 complaints related to Goldman’s credit cards with the CFPB.

While it is difficult to compare Goldman to other issuers on the absolute number of complaints, it’s possible to compare the relative frequency of types of complaints.

Since the launch of the Apple Card, the five most common categories of complaint about Goldman to the CFPB were:

Credit card company isn't resolving a dispute about a purchase on your statement

Application denied

Can't use card to make purchases

Problem during payment process

Card was charged for something you did not purchase with the card

So how does Goldman stack up to other major card issuers?

About 27% of all complaints to the CFPB about Goldman’s credit cards were related to transaction disputes. While this may sound high, it’s slightly below major card issuer Citibank, though above American Express, Capital One, and Synchrony.

A typical complaint to Goldman about a dispute sounded something like this one (emphasis added):

“I had made a purchase at a XXXX dealership for a service ( fixing my a/c ). I paid for the service up front, like the dealer requested. I had to leave town for work, when I came back the dealer sent back the parts for my car, so I spoke to the XXXX and he agreed to refund me for the services, given that I never received them. XXXX never refunded me, so I took it with XXXX XXXX Credit Card and dispute it.

They returned saying that the dealership had enough proof that I made the purchase. However they refused to see that through the whole time I talked to them about the dispute, I mentioned several times, I never received the service. I made the purchase and never got the services. When requested proof of the investigation. They had none, only that I made the purchase. No proof of the dealership saying I received the services, the only thing I got was we can do nothing.”

The two categories of complaint where Goldman really stands out from others are “Application denied” and “Can’t use card to make purchases.”

The high share of complaints about denied applications makes enough sense, given the high-profile launch of the Apple Card and unfounded complaints of gender discrimination.

The complaints about not being able to use the card to make purchases — which accounted for just over 9% of all complaints about Goldman-issued credit cards, are a bit more unusual. For other major issuers, these kinds of complaints represented just 2-4% of complaints to the CFPB.

Though the exact complaints vary, a common theme emerges, where a user’s card is restricted for unclear reasons, and, when they contact Goldman, they’re unable to get an answer as to why.

Many complaints also referenced calling repeatedly, long hold times, and unfulfilled promises that consumers would be called back.

For example, one customer wrote to the CFPB (emphasis added):

“For exactly a month now, Apple restricted my Apple credit card and I have not been able to make purchases using this card because they said my account is ‘under review’.

They said that someone would contact me to resolve the situation when the review is done, but they never did. When I tried calling back like every week (latest was on XX/XX/XXXX), Apple still told me the same thing ... to wait for a return call.”

…and another wrote (emphasis added):

“I used my credit card within my limit as I normally would. The account has been restricted and I wasnt told why other than something triggered a response in their department. Ive called numerous times and my account is still restricted over a week later. Im not given a time frame of when I can usee my account. After reading about this companys practices online in similar cases, it looks like many people are restricted from using their cards for over a month.”

CFPB Interpretative Rule Puts Google, Meta on Notice For UDAAP, Consumer Protection Violations Liability

The CFPB has put “Big Tech” on notice that they may be considered service providers to financial services companies that use their advertising platforms and thus “can be held liable by the CFPB or other law enforcers for committing unfair, deceptive, or abusive acts or practices as well as other consumer financial protection violations.”

The CFPB’s statement released in conjunction with the interpretative rule draws a distinction between “traditional advertising,” like a TV commercial or bill board, and “digital marketing.” According to the statement (emphasis added):

“Traditional advertising relies on getting a product or service out to as wide an audience as possible. A traditional marketer, for example, may try to purchase time and space for a TV commercial on the most watched station or show.

Digital marketers, on the other hand, seek to maximize individuals’ interactions with ads. They may harvest personal data to feed their behavioral analytics models that can target individuals or groups that they predict are more likely to interact with an ad or sign up for a product or service.”

Because digital marketing platforms “go beyond” traditional advertising, they do not qualify for the “time and space” exception that a TV station or newspaper would enjoy, the CFPB says.

The agency argues that targeting and optimization algorithms common in digital marketing constitute a material service to financial advertisers (emphasis added):

“Digital marketing providers are typically materially involved in the development of content strategy when they identify or select prospective customers or select or place content in order to encourage consumer engagement with advertising.

Digital marketers engaged in this type of ad targeting and delivery are not merely providing ad space and time, and they do not qualify under the ‘time or space’ exception.”

What does this mean in practice? While the CFPB doesn’t name specific ad platforms in the interpretative rule nor in its statement, it’s pretty clearly targeted at Google and Meta (Facebook).

While the statement about the interpretive rule is broad, referencing potential liability for unfair, deceptive, and abusive practices, the most obvious area that could receive scrutiny is how ad platforms ensure compliance with ECOA or other kinds of unfair discrimination.

The Equal Credit Opportunity Act prohibits discrimination in access to credit on the basis of race, color, religion, national origin, sex, marital status, age, public assistance, or the exercise of any rights under the Consumer Credit Protection Act.

This isn’t purely theoretical — the Department of Justice recently reached a settlement with Meta on similar allegations that when its targeting algorithms were used for housing advertisements, the result was illegal discrimination in violation of the Fair Housing Act.

In fact, CFPB Director Chopra referenced this case in remarks he gave last week coinciding with release of the rule. He closed those remarks by saying (emphasis added):

“Today, relationship banking is under threat. In part, this is because our sensitive data is viewed as more valuable to firms than our actual selves. Advances in technology should help our economy and society advance, rather than incentivizing a rush to seize our sensitive financial data and to allow tech giants to evade existing laws that other firms must comply with. It is critical that we all work together to address this.”

Digit to Pay $2.7 Million Penalty for Deceiving Users on Overdrafts

Savings app Digit, which was recently acquired by small-dollar lender Oportun, has reached a settlement with the CFPB over its marketing and business practices that resulted in consumers overdrafting their accounts.

The language in the press release announcing the order is notable for describing the company as “lying” to consumers:

The Digit app links to a customer’s existing checking account and then automatically determines an amount to transfer to a separate savings account.

Digit promised that such transfers would not cause a user to overdraft their account and that, if they did, Digit would reimburse them.

But, according to the consent order, that was not the case:

“Falsely guaranteed no overdrafts: Hello Digit represented that its tool “never transfers more than you can afford,” and it provided a “no overdraft guarantee.” But instead, Hello Digit routinely caused consumers’ checking accounts to incur overdraft fees charged by their banks. Hello Digit received complaints about overdrafts daily.

Broke promises to make whole on its mistakes: The company also represented that if there was an overdraft, it would reimburse consumers. But the company often denied customers who tried to recoup their money. The company has received nearly 70,000 overdraft-reimbursement requests since 2017.

Pocketed interest that should have gone to consumers: As of mid-2017, Hello Digit deceived consumers when it represented that it would not keep any interest earned on consumer funds that it was holding, when in fact the company kept a significant amount of the interest earned. Had Hello Digit kept its promise to not keep the interest on consumers’ funds, consumers could have pocketed the extra savings.”

For its part, Oportun, which acquired Digit, released the following statement (emphasis added):

“Digit received a CID from the CFPB in June 2020. The CID was discussed with Oportun during the acquisition process. The stated purpose of the CID was to determine whether Digit, in connection with offering its products or services, misrepresented the terms, conditions, or costs of the products or services in a manner that is unfair, deceptive, or abusive.

Through the investigation, it was found that with a success rate of better than 99.99%, Digit isn’t ‘perfect,’ meaning a Digit Save transaction caused an overdraft fee for one of our members less than 0.008% of the time.

As a result, Digit owes 1,947 members approximately $35 each, for a total of $68,145. In addition, Digit will pay a civil money penalty of $2.7 million. While we disagree with the CFPB on this matter, we are happy to have it settled.”

It’s unclear how Digit’s purported 99.99% success rate reconciles with the CFPB’s claim that the company has received nearly 70,000 overdraft-related complaints since 2017.

Other Good Reads

What’s Going Wrong at Goldman Sachs’ Marcus Consumer Bank (Business Insider)

A PFM App By Any Other Name (Fintech Takes)

Family Fortunes: The Origins and Growth of the Family Office (Net Interest)

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Hey all, Jason here.

Welcome back to Fintech Business Podcast.

In this episode, I had the chance to catch up with Joe Robinson, co-founder and CEO of Hummingbird, live at last month’s Money2020.

We had the chance to talk about:

Joe’s background and what led to his role at Hummingbird

The pain of using Google docs & email for case management

The complexity of managing compliance in today’s partnership-driven fintech universe

The intersection of crypto and anti-money laundering

How realistic Ozark is

& more

Programming note: this is the last of the podcasts I recorded live at Money2020 — it has been a crash course on audio production. Hopefully, you can expect better quality audio going forward!

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Hey all, Jason here.

Welcome back to Fintech Business Podcast.

In this episode, I sat down with Iain McDougall, the Chief Commercial Officer of open banking infrastructure provider Yapily. We had a chance to discuss:

Iain’s background, and what led him to fintech

Open banking in Europe vs. the US

PSD2

How open banking can facilitate innovation and competition

Lessons the US can learn from Europe’s open banking experience

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Hey all, it’s Jason.

Welcome to Fintech Business Podcast, a monthly(ish) podcast where I’ll be interviewing leaders in banking, fintech, and crypto. If you’re already subscribed to the main newsletter, you’ll automatically receive each new episode when it’s published. Don’t worry, this will be in addition to the Fintech Recap news show that Alex Johnson and I do each month!

In this first episode, I sat down with Paolo Ardoino, the CTO of Bitfinex, live at Money2020 in Amsterdam. We had a chance to talk about:

Paolo’s personal background, including how he’s been coding since 8 years old

How he scaled Bitfinex’s infrastructure to handle millions of orders per second

Why Bitfinex thinks crypto markets can democratize capital raising & what it’s doing in Kazakhstan

Why Tether doesn’t face the same risks that lead to Terra’s collapse

This episode was recorded live on the floor at Money2020, so please excuse the background noise — I’m an audio engineer in training!

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