Consumers probably won’t be made whole, and banks have many lessons to learn.

Mercury has filed with the Office of the Comptroller of Currency (OCC) for a national bank charter and applied to the Federal Deposit Insurance Corporation (FDIC) for deposit insurance. By obtaining a bank charter, Mercury will de-risk by eliminating the need for partner banks and putting banking services entirely under its control. Partnerships between fintechs that are bank lookalikes and sponsor banks are giving way to the next wave of licensed financial institutions (FIs) and a new definition of “traditional banking.”

Green Dot’s fintech business and licensed bank are being separated and acquired—the former by a private equity firm and the latter by an $839 million commercial bank. The total value of the deal is estimated to be between $825 million and $1.1 billion. B2B services, including banking as a service, has been Green Dot’s growth engine. Carving off the noncore, lower-margin, declining part of the business will allow the company to focus on where it has the greatest growth opportunities. A bank can best leverage its expertise and infrastructure to operate the businesses that Green Dot has struggled with.

The news: Virtually all community bank leaders (99%) see embedded finance as important for their institutions' long-term survival, with 60% considering it extremely important, per a recent study by Treasury Prime. Our take: Embedded finance is a popular and effective avenue for community banking growth—if pursued with careful consideration and a priority on compliance. And there's an opportunity to maximize marketing opportunities when entering such partnerships.

After its banking partner’s regulatory issues, fintech Dave aligned with Coastal Financial.

In today’s episode of The Banking & Payments Show podcast, we talk about who the BaaS compliance crackdown will hit the most, why Walmart and Amazon will pilot pay-by-bank at checkout in 2025, and how consumer privacy will change under a second Trump administration. Join the discussion with host and Head of Business Development, Rob Rubin, and Principal Analysts Tiffani Montez and David Morris.

Reeling from 2024’s challenges, financial institutions must embrace bold strategies in 2025 to future-proof their businesses in a landscape plagued by economic, competitive, and regulatory pressures.

The need for more detailed record-keeping will increase compliance costs.

Banks are experimenting with emerging technologies and business models to find new revenue streams. But stepping outside traditional banking molds introduces more business, reputational, and regulatory risk.

Community banks and credit unions were marked safe from the recent US regional bank collapses. But they’re still contending with unprecedented interest rates, an aging customer base, and disappointing core banking technology.

In a by-now familiar story, these banks must promptly address deficiencies identified in their BaaS partnerships.

Precipitously decreased funding is creating headwinds for fintech, but emerging environmental and regulatory crises will present innovative startups and vendors with lucrative opportunities in 2024.

Dramatic shifts are in the works for 2024, as BaaS, social media players, genAI, and new digital wallets reshape the banking landscape. Our top trends explore what’s in store.

Small banks and credit unions should focus on digital interactions, ease of use, and consumer safety to boost deposits in H2 2023.

Banks are focused on B2B opportunities and generative AI to drive revenue as they usher crypto out the door.

Today’s episode is all about the future of banking as a service (BAAS). In our "Headlines" segment, we use Railsr’s fall from grace to discuss how today’s economic uncertainty has slowed down the progress of embedded finance and BaaS. In "Story by Numbers," we examine a cornerstone advisor’s forecast of BaaS revenues in 2026 and how a 2022 study from Endava found that about half of fintechs are having scaling and platform issues with their BaaS providers. And in "Pretend CEO," we ask guest Leda Glyptis to pretend that she’s teamed up with a giant private equity firm with unlimited capital resources and a vision of building or buying her way to win a material share of the $25 billion of BaaS revenues in 2026. Join the fun with host Rob Rubin, our analyst Eleni Digalaki, and special guest Leda Glyptis, chief client officer at 10x Banking and author of the recently released book "Bankers Like Us."

Consumer demands are evolving faster than banks’ tech, so they’re turning to fintechs to keep up. Slowly, banks and fintechs are learning to work together.

On today’s episode, we turn our attention to fintech regulation. Jason Mikula, publisher of Fintech Business Weekly and managing director at 312 Global Strategies BV, a consulting firm focused on financial services product strategy, talks about the challenges banking as a service (BaaS) providers and their partners face as regulators pay more attention to banks’ relationships with third parties. We also ask Mikula to take the role of "Pretend CCO" at a fintech company as he lays out his top priorities for 2023 given potentially new regulatory scrutiny. Listen to the discussion with our host Rob Rubin.