Banking-as-a-Service in the US | SynapseFi Deep Dive
Banking-as-a-Service (BaaS) is a key piece of the US fintech puzzle due to the lack of a regulatory framework for fintech-specific licenses. It also has the conventional upsides that come with the service offering - doing away with cumbersome licensing requirements, faster time to market & product development, ability to focus on customer servicing, and so on.
Over the years, the most populated fintech ecosystem of the world has seen numerous BaaS providers coming into the picture, and they can be broadly categorized as follows:
Regulated Banks like Cross River, Greendot utilise their licenses as well as modern tech stack to help fintech startups build on top of them.
Middleware providers like Galileo & Treasury Prime facilitate the tech infrastructure that can act as a flexible intermediary to foster collaboration between banks and fintechs.
Platform BaaS providers like Synapse & Unit provide an end-to-end offering that is ready to use for fintech startups.
Primitives, a newly emerging BaaS model, like Moov offer granular control to developers designing financial products from the ground up.
Each of these categories of BaaS players has a unique proposition towards a target market segment, which makes for plenty of room for them to coexist with some healthy competition.
SynapseFi - All About That BaaS
SynapseFi has been a key player in the US BaaS segment, enabling early-stage fintech startups to build and ship financial products in short timeframes. Founded in April 2014 by Sankaet Pathak and Bryan Keltner, the company positions itself as "the launchpad for financial innovation".
By offering wrap-around banking-as-a-service, Synapse has helped fintech startups from multiple segments like neobanks, wealthtech, payroll, proptech, crypto and more launch their products in weeks or months rather than years.
While this superpower is invaluable to early-stage startups, things get a bit tricky once the company grows. The impact on unit economics and room to customise and scale are some drawbacks of the platform BaaS offering that emerge. The same can be said for Synapse with the instances of fintech scale-ups like neobanks Dave, Oxygen, Empower, and payroll fintech Clair, moving on to scale-suited service providers or in-sourcing operations to optimise costs.
However, that still leaves a wide pool of opportunity for providers like Synapse, with over 14000 early-stage fintech startups in the United States. As a prominent player in the industry, the company has witnessed several highs and lows in its seven-years stint so far and it makes for a specimen study in the banking-as-a-service category.
Our Business Model Deep Dive on SynapseFi is now free to download here. It covers the following topics:
Market Map of Fintechs building on Synapse
Synapse Client Base Trends
Note: This report has been published independently by WhiteSight, and has not been commissioned by SynapseFi.