The Consumer Finance Podcast
The Future of Bank-Fintech Partnerships and Banking as a Service
Jul 25, 2024
Jesse Silverman, a key member of Troutman Pepper's Financial Services team, joins fintech expert Alex Johnson, author of the Fintech Takes newsletter. They dive into the future of bank-fintech partnerships and the critical role of banking as a service. Topics include the regulatory challenges fintechs face and the necessity for improved consumer disclosures. They emphasize the balance between fostering innovation and ensuring compliance while advocating for a collaborative regulatory approach to strengthen the financial ecosystem.
36:00
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Quick takeaways
- FinTech companies are facing existential risks due to regulatory crackdowns, necessitating robust partnerships with banks for survival and stability.
- The landscape of banking as a service is shifting as banks become more cautious in partnerships, raising entry standards due to increased regulatory scrutiny.
Deep dives
Existential Risks in FinTech Banking Partnerships
The discussion highlights the existential risks faced by FinTech companies reliant on bank partnerships, particularly in light of recent regulatory crackdowns. Many FinTech founders are expressing concern over the difficulties of securing reliable banking partners, as the failure to do so can threaten their very existence. The pressure to maintain a banking relationship has increased, with companies needing to pivot rapidly in response to changes in their banking partnerships or regulations that affect access to financial services. This situation serves as a wake-up call for many in the industry, emphasizing that without a robust banking partner, their business models are in jeopardy.
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