Fintech Takes

S8 E10: Bank Nerd Corner: Why "FBO" is Out & Fintech Custody Accounts Are In, Rate Cut Buzz, and the FDIC’s New Rule

Sep 11, 2024

Kiah Haslett, Banking and Fintech Editor at Bank Director, joins to discuss pivotal changes in the financial landscape. She highlights the shift from 'FBO' accounts to the more transparent 'Fintech Custody Accounts.' The conversation delves into the excitement surrounding potential rate cuts and their implications for mortgage rates and commercial real estate. Additionally, Kiah examines the FDIC's new rule on fintech ledger controls, bringing transparency into focus, while discussing the OCC's shift towards prioritizing financial health in banks.

01:28:20

Episode guests

Kiah Haslett

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Quick takeaways

The rebranding of 'FBO' accounts to 'Fintech Custody Accounts' aims to enhance transparency and reflect modern banking practices.

Anticipated interest rate cuts could drive refinancing activity in the mortgage sector, despite ongoing structural challenges in commercial real estate.

The FDIC's new rule could improve accountability in fintech partnerships by requiring banks to maintain comprehensive ledgers for client accounts.

Deep dives

Importance of Bank Partnerships

Bank partnerships are essential for the success of embedded finance and fintech initiatives. Collaborations between banks and fintech companies can foster innovation and enhance service delivery. These synergies often lead to the creation of API-first platforms, which provide enterprises with the capability to scale their payment products rapidly. A notable example is Newline, developed by Fifth Third Bank, which empowers businesses to launch integrated financial solutions efficiently.

Transparency in FinTech Banking Is Essential

02:05

Words Shape Mindsets

01:16

NIM Trends: Understand the Cycles

01:45

Trust the Platform, Not the Bank

00:30

Intro

6min

Rethinking Financial Terminology

5min

Interest Rates and Banking Dynamics

17min

The Evolution of Customer Behavior in FinTech

2min

FDIC's New Rule on Fintech Accounts

6min

Challenges of Daily Reconciliation in Banking Partnerships

2min

Navigating Modern Banking and Fintech Complexity

22min

Navigating Banking Performance and Consumer Needs

27min

Welcome back to Bank Nerd Corner, featuring yours truly and the brilliant Kiah Haslett, Banking and Fintech Editor at Bank Director.

First up: Kiah breaks down why "FBO" accounts need a rebrand as "Fintech Custody Accounts" (FCA) to better reflect today’s BaaS landscape. Could this shift in lingo actually improve transparency in managing fintech partnerships?

Next, they dive into the Federal Open Market Committee's looming rate cut decision, the first since 2020. With excitement brewing over potential mortgage rate dips, what will the impact be on commercial real estate and shrinking bank margins? How will the rate cut reshape the lending landscape?

Finally, courtesy of the Synapse-Evolve Case,they dive into the FDIC's new rule on tighter fintech ledger controls—arguably the most exciting regulatory shakeup you didn’t know you cared about.

Plus, how the OCC’s shift toward prioritizing financial health over traditional safety metrics could reshape banking. Are banks ready to monitor financial well-being like doctors track vital signs?

Tune in to find out!

Raising the standard of quality for embedded finance infrastructure, Newline™ by Fifth Third is an API platform that enables enterprises to launch and scale payment, card and deposit products directly with Fifth Third Bank.

Learn more at newline53.com

00:01:03: Call FBOs By Their Name: FCAs

00:07:49: Fed Rate Cuts: Central Bank Showdown

00:28:06 The FDIC’s New Rule

00:49:04 Why Is The OCC So Focused On Financial Health?

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