The Ledger
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Pathak: Synapse will not seek to acquire its own banking charter
“We're most likely not going to go and get a charter.”
Pathak: Empower will surpass neobanks like Chime and Varo within months
“So pretty much, at this point, in a couple of months, they've been able to get at par With any other new banking customer you can think of. Maybe Chime, maybe Varo, all of these people. They started after them, and now are at the point where we are, and next c…”
Pathak: Early neobank Simple was essentially a reseller for Bancorp Bank
“Simple has a bunch of obligations that they've had to kind of outsource in a way to Bancorp Bank, which was their partner bank and based on whatever their KYC standards were and KYC policies were, that's all Simple could So in a way, Simple was just a reseller…”
Pathak: Legacy banks lack software skills to acquire digital customers efficiently
“Banks, in most cases, are not good at, like, building out new software interfaces and tools and for that reason, even if they blew up their marketing, it would be highly unlikely that they'd be able to get in a lot of these customers.”
Pathak: Up to 90% of banking back-office functions can be automated
“A lot of the back office functions that banks are hiring people for you can by and large automate depending on what type of operation it is from like 80 to high nineties percent”
Pathak: Simple founder Shamir Karkal couldn't open his own bank account
“Later I talked to Shamir, who was the founder of Simple, and he said even he didn't have a Simple bank account.”
Pathak: Modular banking infrastructure enables financial services for underserved populations
“Let's not try to make a new Simple. Let's just try to make a new Bancorp, with the idea being, if we can make the underlying infrastructure extremely more modular than it is today, it can accommodate for immigrants, it can accommodate for people who don't have…”
Pathak: Only two or three new US banks chartered since 2008
“No, because after, after the last financial recession, there has been I think about only two or three new banks that have actually been de novoed.”
Pathak: Newly chartered US banks face two years of regulatory restrictions
“And based on the current regulations if they stay the way they are it puts, even if someone were to become a new bank today, for next two years, they would be pretty much kind of in a restricted category with the Fed and also with the FDIC.”
Pathak: Regulators hold sponsor banks liable for fintech partner compliance failures
“The bank bears the risk for the primary regulators. Now we've seen precedent being set where CFPB goes directly to fintech companies and also finds them, but mostly what happens is your primary regulator is going to knock on your door, you're being the bank's …”
Pathak: Launching a neobank traditionally requires eight to ten vendor partnerships
“Well, eight to 10, because the pieces we haven't talked about is other use cases we can talk about how this applies for lending, but in case of neobanks, your customer wanting to pay a bill, and the way they pay a bill is with the check. Do you send them a che…”
Pathak: Synapse avoids tri-party agreements to simplify customer onboarding
“So we've kind of like always only partnered with people where no tri-party agreements are needed. So they just come and sign an agreement with us, and then we kind of manage everything else behind the scenes.”
Pathak: Synapse CEO uses only customer fintech cards, no legacy banks
“At this point, I don't have an account with Bank of America, Chase, Wells Fargo, anyone. I literally only have my customers' cards in my pocket.”
Pathak: Airbnb and non-internet companies will soon launch embedded financial products
“Lyft, Uber, they're doing it. Airbnb probably is going to do it. They're also going to have companies that have not even been internet companies starting to offer this.”
Pathak: Founder role transitions in fast-growing startups are sudden step functions
“When your company is growing very quickly, that switch is a step function. It's not a gradual switch. It doesn't give you a lot of time to be like, okay, I have about six months before I can improve on this. You have to quickly be able to change.”
Pathak: Unified high-net-worth banking and wealth platforms will emerge within a year
“All the way to high net worth individuals and how can you build out better portfolio management for them that doesn't just only account for public stocks that they have to buy, but goes across board from checking all the way to portfolio management. That last …”