Banking used to be a scary world full of regulations that few wanted to enter.

Banking used to be a scary world full of regulations that few wanted to enter.

Now fintechs are buying chartered banks to cut costs….

What happened?

When a fintech builds their app, the only thing they need to be focused on is building an incredible app and growing their customer base.

Everything else is a distraction.

Operating a chartered bank would be a HUGE distraction.

Enter the “RENT A CHARTER” industry.

Some call it Banking as a Service (BaaS).

I call it Rent a Charter (kinda like a rent-a-cop at a mall but a bit more expensive).

But once the app is built, the company is thriving, and scale has been achieved, it’s time to look for more ways to make money or cut costs.

One of the biggest costs these fintechs have is that every time there is an API call to a bank from their app or other transactions with the bank, they have to pay for it.

And when you’ve reached scale, that’s a lot of API calls.
And a lot of money.

At that point, buying a chartered bank makes a lot of sense.

Incorporate your product directly into your new bank and stop paying for every single API call or transaction.

Yes, you’ll have to deal with more compliance and regulations now, but you probably saved enough money to pay for it.

AND You now have more leverage when other banks want to use your service.

You no longer need to sell to them.
You’re in control.

Fintechs are growing really big, really fast with modern tech developments.

Will we reach a ceiling at some point?

Or will we just keep innovating?

Digging deep on banks is what I do.

🔔 Follow Brian on Linkedin: Brian Pillmore




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