Synapse Financial Technologies offers a banking platform that helps businesses create and launch financial products without needing to build their own infrastructure. The company provides APIs that allow clients to integrate various financial services, such as issuing loans, processing wire transfers, and managing payment systems like ACH and debit cards. These APIs are designed to be easy for developers to use, enabling quick implementation of financial services. Synapse's business model is based on charging fees for API access, which can include transaction fees and subscription fees. This approach allows businesses to focus on their core operations while utilizing Synapse's technology for financial services. The goal of Synapse is to empower a wide range of clients, from startups to established financial institutions, to offer banking services efficiently.

Trinity Ventures

Andreessen Horowitz

Core Innovation Capital

Fintech

Financial Services

Synapse

Warren Buffett once remarked that it’s when the tide goes out that you find out who’s been swimming naked. The continuing regulatory examinations of various parts of the Synapse Financial Technologies web of operations gives some stark illumination between the differences — and perhaps some may say widening gulf — between traditional banks and FinTechs. And to take a cue from that Buffett comment, the reality is that the tide is going out on Synapse, revealing the extent to which a seeming lack of internal controls or processes have been generating negative ripple effects across the financial services landscape

Synapse Credit Loses Lending License, Highlighting Stark Differences Between Fintechs And Banks

Banks connected to the collapse of Synapse are reportedly close to recovering customers’ frozen funds. These banks have made progress in putting together account information for those customers, which could mean their funds being released within weeks, CNBC reported Thursday (July 11), citing a source briefed on the matter. Staff from Evolve Bank  Trust and Lineage Bank have in particular had success after recently hiring a former Synapse engineer to unlock data from the bankrupt FinTech middleman, said the source

Synapse-Connected Banks Reportedly Closer To Releasing Customer Funds

They say there are no guarantees in life. That sentiment applies to financial services — at least, depending on where you look, or what promises are made by nonbanks. With traditional financial institutions (FIs), such as the banks that have been around for decades, even centuries, there are some guarantees. Up to $250,000

Fdic Warnings On Nonbanks Point To Gaps In Deposit Insurance

Four Democratic U.S. Senators have a message for bankrupt FinTech Synapse:. Let your customers get access to their deposits. The four senators — Senate Banking Committee chair Sherrod Brown of Ohio, Ron Wyden of Oregon, Tammy Baldwin of Wisconsin and Pennsylvania’s John Fetterman — wrote to the company’s owners and FinTech partners Monday (July 1), calling on them to restore customers’ access to their funds

Dem Senators To Synapse: Let Customers Access Deposits

2024 is fast becoming the summer of consent orders for smaller banks. That’s because, with the news Friday (June 28) that Tennessee-based Thread Bancorp is now the latest financial institution (FI) to come under the Federal Deposit Insurance Corporation’s (FDIC) scrutiny, managing for the operational, compliance and strategic risks that come with third-party tie-ups is top of mind for both banks and their FinTech partners. FDIC enforcement actions are typically made public on the last Friday of the month, and the order issued to Thread, a popular partner bank for dozens of FinTechs, is unique in that it explicitly calls out the bank’s Banking-as-a-Service (BaaS) and Loan-as-a-Service (LaaS) programs

Thread Bank, Unit’S Baas Partner, Receives Latest Fdic Enforcement Action

It is almost July Fourth, and summer holiday travel is about to enter its peak season. But despite the sunshine and blue skies, Americans planning to buy a new car for summer excursions may be looking at decidedly cloudier weather. That’s because, a full week after the initial cyberattack that took down dealership software-as-a-service platform CDK Global’s operations, the software provider told its car dealership customers Tuesday (June 25) that its systems will continue be down for at least the rest of the month

Will Us Dealerships Shake Off Cdk Attack By Independence Day?

One of the themes in PYMNTS’ monthly “What’s Next in Payments” series is that the Banking-as-a-Service (BaaS) model is under pressure right now. Synapse declared bankruptcy, while Evolve Bank and Trust was issued a cease-and-desist order, which in part requires the company to get approval from the Federal Reserve to set up any new FinTech partnerships. Ingo Payments Chief Revenue Officer Lydia Inboden told PYMNTS in an interview that the BaaS industry might be going through a period of upheaval — but there’s long-lived staying power. Inboden’s take is that while Synapse doesn’t represent a systemic shutdown of BaaS, it also doesn’t represent a one-off event, but rather a confluence of different scenarios that shed light onto an overall picture

Trending: Banking-As-A-Service Upheaval Will Stabilize

When it comes to compliance, businesses need to grow up — quickly — to compete.From Apple’s ongoing troubles in the European Union to former FinTech-darling Synapse’s bankruptcy in the United States, the contemporary to-the-letter regulatory and compliance landscape is driving corporate costs up for businesses both large and small. It’s a situation that frequently results in a downstream impact on their own partners and customers.In today’s volatile business environment, insights from PYMNTS’ A Day in the Life of a CFO series show that risk management is becoming a critical aspect of the chief financial officer’s role.Historically regarded as the custodians of financial stewardship, finance leaders are now seeing their function evolve into one that is pivotal in navigating the complexities of compliance and risk management.From monitoring macroeconomic trends and surging geopolitical risk to the imperative to safeguard organizational integrity and adhere to corporate governance and regulatory standards, the expectation for modern CFOs to act as strategic partners to the CEO and the board, providing insights that guide corporate strategy, has never been higher.This transformation is partly fueled by the growing recognition that financial performance is inextricably linked to risk management and compliance, and it has been given a shot in the arm by the ongoing globalization of the connected business landscape, where companies must balance a host of different global regulations that have fundamentally altered the governance landscape.Read also: Will Regulators’ Public Shaming Blunt Innovation?The Interplay Between Compliance and Risk ManagementCompliance and risk management are intertwined disciplines that collectively contribute to an organization’s stability and success. Compliance involves adhering to laws, regulations and internal policies, while risk management focuses on identifying, assessing and mitigating risks that could impede organizational objectives.“[Y]ou have to think about managing the risk of the organization,” CSI CFO Ken Gayron told PYMNTS this month.“The CFO and the CEO are really the two positions that see the entire business,” he added.CFOs play a role in integrating these functions into the overall governance strategy. They are responsible for establishing and maintaining an effective internal control environment that promotes compliance and mitigates risks. This involves designing policies and procedures, conducting risk assessments, and ensuring that the organization has the necessary resources to address compliance and risk-related challenges.“We need to make sure we are balancing innovation with structure and reliability,” Pushpay CFO Burt Chao told PYMNTS this month, adding that while “old school CFOs were the ‘no police’ … flexibility in today’s environment requires not only proactively generating opportunity but also managing risk.”See also: Thredd CEO Counts on Regulators to Address Vulnerabilities of Banking as a ServiceCompliance Can Be Both Growth Driver and Corporate StrategyWhile the prevailing wisdom across the payments and financial services marketplace, particularly for startups and younger firms, used to be that growth was the single most important criterion, now, companies need to scale smartly rather than rapidly.“It’s time to make compliance a force for growth,” Sovos CEO Kevin Akeroyd told PYMNTS in April, noting that among businesses there’s both a palpable shift toward conservatism and risk mitigation.Effective compliance and risk management extend beyond policies and procedures; they require a culture of compliance embedded within the organization. CFOs, as leaders, must champion this culture, promoting ethical behavior and accountability at all levels.“CFOs are always playing offense, but you’re also playing defense,” DailyPay CFO Ken Brause told PYMNTS in May

How Cfos Are Managing The Year Of Regulatory Anxiety

For the banking as a service (BaaS) firms, the Synapse bankruptcy, the cease-and-desist order against Evolve, and the wait for regulatory clarity are all proving to be headwinds for the burgeoning business model. This week, BaaS embedded finance company Unit, which serves tech companies, banks and brands, said it was laying off 15% of its staff. That move comes amid “slower than expected revenue growth.”. In a Monday (June 17) blog post detailing the layoffs, company co-founders Itai Damti and Doron Somech said that “banks in the fintech ecosystem have slowed down in the last year due to increased regulatory scrutiny.”

Banking As A Service Faces ‘Slowdown’ As Fis Wait For Regulatory Clarity

The relationships between FinTechs, banks and neobanks has been placed under a harsh spotlight with the recent revelations around the Synapse bankruptcy. The reaction from the industry so far has focused on the Synapse case as an isolated incident rather than a systemic issue, but it has also been the occasion for a reconsideration of the banking-as-a-service business (BaaS) model. As Jim McCarthy, CEO of Thredd, told PYMNTS’ Karen Webster recently, it’s time to get back to basics. “Too many people are focused on the ‘as a service’ part — but have ‘minored’ in the banking part, if at all … if you’re going to play in that space, I’d argue that if you fail at the banking, the service piece doesn’t matter,” McCarthy said

Synapse

Provides banking platform via APIs

Synapse

Provides banking platform via APIs

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