Chris Dean

@brandon Let's go! What's happening with Synapse and Evolve? (nothing good) Is having the ex-FDIC Chair involved a signal of something greater? (not really) What can we expect for fintechs in general? (come and see!)

I'm speaking with @ctdean on the impact of the Synapse & Evolve Bank Fallout on Monday. We're two founders with an aerial view of the landscape. Topics include: — The nature of their fallout. — Why you should treat your bank like a critical vendor. — How this affects fintech. The stream is at 11a EST on Monday. Register below:

@brandon That’s great! I wrote a similar but shorter thing linkedin.com/posts/ctdean_i…

How to pick a bank partner in 2024 Founders in 2024 must carefully consider who they pick as their bank partners. You need to be more thoughtful than “Well, that’s who everyone chooses! And it’s quick!” Here’s how you must think about picking a bank partner in 2024: 1. Compliance first Business banking is no joke. The costs are enormous for BSA-AML compliance, onboardings, transaction monitoring, and more. By far, the most important question you must ask: “Does this bank do things the right way?” There are two categories of banks: ones that take compliance seriously, and ones that move fast and loose. As a fintech founder, it’s your job to figure out which is which. You can’t outsource this decision to some middleware. A compliance first partnership is the only winning partnership in the long-run. 2. What’s their history? Bank’s have a public record. If they have received consent orders in the past, you can find them. If they have a history of being customer-centric, you’ll find that too. Banking is about relationships and their reputations always precede them. 3. Are they a veteran, or are they new? If you pick a “veteran” sponsor bank, onboarding with them may be smoother. They may know the ropes on how to partner with a fintech. They may have more features. But this can come with baggage. Dozens of partners means more surface area for risk and potential scrutiny. If your bank is new to fintech, you may get to work more closely with the bank, and even develop go-to-market strategies together. But, this may come at the cost of moving slower and having fewer features upfront. There’s no hard and fast rule here, but the sweet spot, in my opinion, is to find a bank that has a few, quality programs. They don’t partner with just anyone, they work closely with their partners, and they know the ropes. 4. Are they committed to fintech? Some banks flirt with the idea of fintech, then find out it’s not for them. Your bank partner must be committed to fintech at the executive level. Not just approved as an experiment. Launching a fintech program has enormous costs for a bank. To justify the investment, they must be willing to deal with those costs over several years before seeing a return. Every bank that enters fintech thinks they are up for the challenge. In practice, few are. 5. Are you culturally aligned? It’s insane to me that historically, fintechs and banks could indirectly “partner” without ever meeting one-another. Those days, in my opinion, are over. And rightfully so. You must fly out to meet the executives of your bank partners. Ideally, more than once. You need to understand each other. Make sure you’re ethically aligned. Understand the bank’s goals, and have them understand yours. When done correctly, a bank-fintech partnership should last decades. If you are on different pages, the partnership won't last. 6. Redundancy For a critical function of your business, why would you only have one partner? Like with any critical vendor, you need redundancy. Once you find your ideal bank partner, find a second or a third as well. The breadth of services you can offer may increase. The kinds of customers you can serve may increase. Expertise in underwriting may increase. It’s more costly, but you need a large balance sheet to even flirt with partnering with a bank in the first place. Redundancy is non-negotiable. 7. Do they partner with a sweep network? In our experience, larger balance customers prefer having their funds in a sweep network. This took us quite a long time to bring to market with our partner banks. We made it a point of emphasis with all of them. But, it has been key to our growth. Not every bank will have this functionality, or be willing to expose it, so keep that in mind if you plan to serve large balance customers. For different customer segments, this may not be as important. 8. Who can they onboard? Different banks can onboard different kinds of customers. This is often because they either have, or lack, the in-house expertise to do so. Examples include businesses with foreign beneficial owners, businesses with headquarters in different countries, or businesses in different industries. Make sure the bank you’re considering can serve your ICP, subject to BSA-AML review and approval. Then, make sure you have a second or third banking partner that can do the same. 9. Capacity constraints Some banks can only handle a certain amount of deposits from your fintech program, or across all programs. If you plan to attract billions in deposits, you need to understand those limitations up front. Ask the bank how they think about concentration, and what, if any, are the parameters for your program. 10. Economics Does the bank care more about fee revenue or deposit growth? Does your revenue as a fintech depend on getting a high rate from your banking partners? Do you rely on the bank partner to make loans to your customers? Evaluate whether the deal you negotiated with your bank partner *today* will align with the bank’s goals in *5 years* as well. If you’re relying on them to lend to a vertical today, will they continue to do so down the road? If their short-term needs are different from their long-term needs, your business can’t rely on its current revenue model. But if you’re confident that you have long-term alignment on economics, then you can compound on the relationship forever. And that’s the point of fintech: compounding! — Introducing a banking partner to your fintech is not an afterthought. You don’t just flip a switch on and then get back to the “cool” parts of your business. It is slow, painful, and requires serious and careful deliberation. You as the CEO should be talking to your bank partners daily. This is a marriage akin to your co-founder. When done right, financial services is a ~$16 trillion dollar industry that you can compound on forever. You will see the upside from your efforts in decades, not in months. There are no shortcuts, so make sure you love what you do, and know you're in it for 100 years! For more insights on building a fintech in 2024, follow @brandon as we share more!

Check out my latest article: 5 Embedded Finance Predictions for 2024 linkedin.com/pulse/5-embedd… via @LinkedIn

Last night, the Prime Time happy hour was an incredible reunion! 🥂 Great to see everyone in person! Our VIP room is all set for 1-1 meetings, and the entire Treasury Prime team looks forward to more discussions with you about how to tap into the future of finance! 💵 💫 #money2020usa #fintech #banking treasuryprime.com/events/book-a-…

Check out my latest article: Banking as a Service (BaaS) Unpacked linkedin.com/pulse/banking-… via @LinkedIn

Let's talk about how AI will change banking. 🗓 Tomorrow! 11 a.m. PST, 2 p.m. EST. See you on Linkedin. #ai #Banking linkedin.com/posts/treasury…

See you in about an hour at my Braindate at SaaStr where I'll be talking with fintechs about how to navigate the regulatory maze like a pro. It's completely doable if you just keep some key strategies in mind. See you soon. #saastr2023 #saastrannual saastrannual2023.com/agenda-and-spe…

I'm excited to be part of the @EmpireStartups Contributor Cohort, a chance for executives and experts to bring perspective and unique insights on FinTech's latest topics. Check out my first piece, a topic that's always top of mind: How FinTech Startups Can Grow Quickly and Safely

Today is all about Prime. Not Amazon Prime. Treasury Prime! Listen to my fascinating conversation with @treasuryprime's founder and CEO, @ctdean podpage.com/product-market…

Meet our Speakers ! FiNext Awards & Conference Las Vegas, U.S. 2023 Chris Dean Co-Founder , @treasuryprime Save the dates: November 02nd - 03rd, 2023 Register now! On finextcon.com Presented By @internetshine #finextcon #finextcon2023 #fintech #fintechevent

📢 Join us tomorrow at noon PDT for a webinar on our newly launched Partner Marketplace. The platform brings together #fintechs, #banks, and partners, facilitating seamless collaboration and accelerating growth. #embeddedfinance

The ⚔️Fraud Fighters Manual⚔️is finally here! Industry leaders share their expertise on common schemes like 1st/3rd party fraud, stolen/synthetic identities, money mules, NFT fraud, + more. Download your copy now to stay a step ahead of fraudsters. hubs.li/Q01QrqnV0

I wrote another article about how to think about bank compliance linkedin.com/posts/ctdean_f…

The Fed is preparing to launch its much-awaited ⚡ instant #payments system, FedNow. The industry is about to witness a major transformation when it launches in July. Join our LinkedIn Live next Thursday, 6/22 at 11 a.m. PT to learn more about the impact.

Check out my latest article: Yes, You Can Launch Embedded Banking Products Safely. Here’s how. linkedin.com/pulse/yes-you-… via @LinkedIn #fintech #banks #embeddefinance

🔊Funding News 🔊 We’re delighted to announce that we’ve raised $13.5million in a #SeriesA funding round led by @MMVglobal, with participation from our existing investors, @seedcamp, @NotionCapital & @eqtventures. Read all about it here: blog.griffin.com/2023/06/07/gri… #Griffin #MMV

Let me join everyone else in saying congratulations to Natasha, Katie, and the entire Cable team! They are a great partner with a a great partner and this is a well deserved success.

@regulatorynerd I don't think we're a BaaS company either, but all of my users think we are one, so I roll with it. FWIW, I don't think a BaaS company works in the US. Have pick a lane: Be a bank (CRB, ..) or be a software company (that's us). If you don't pick a lane, you'll just get hit.

@ctdean Yes! And I think you guys have an elegant solution to the graduation issue. (Also don’t really consider your company to be BaaS, but realize it solves many of the same needs.)

1/ Cross River is making time to chat with clients on the consent order. I joined one such call and my tl;dr is they're doing a good job managing the normal give-and-take that happens in this space. If I'm a fintech founder, I'd be excited to keep working with them.

@regulatorynerd Great thread! 90% of BaaS compliance issues are solved if you use a platform that doesn't want to be a bank. You can't really be an intermediate program manager for a banking product, so don't do that. and you're fine (Same story for the graduation problem.)

And back to the top! twitter.com/regulatorynerd…

Keep up with the latest products and services offered at Treasury Prime with our April highlight reel. From Enhanced FDIC Insurance to check issuing, there's something of use for every type of #embeddedfinance enterprise.