Banking Layer Model
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A model where fintech companies build consumer-facing services on top of existing banking infrastructure, allowing them to offer banking services without becoming a full bank.
Core Structure
- Fintech companies act as the front-end layer
- Traditional banks handle the actual banking operations underneath
- Companies like BBVA serve as the underlying banking partner
- Neobanks aren't actual banks - they're consumer-facing applications
Key Benefits
- Faster to market - don't need full banking license
- Lower regulatory burden
- Focus on customer experience and interface
- Can start operations with less capital
- Easier to scale than traditional banks
Example: Simple Bank
- Built on top of BBVA Compass
- Focused on superior customer service
- Features included:
- 24/7 text support
- Modern interface
- Young, responsive support team in Portland
- Acquired for $100 million
Challenges for Getting Banking License
- Government hesitant to give licenses to tech startups
- High reserve requirements (10% mentioned)
- Lengthy approval process
- Limited incentive for government to approve new banks
- Companies like Robinhood and Brex still seeking licenses
Current Trend
- First challenger bank recently received banking charter
- May open doors for others
- Many fintech companies still prefer partnership model
- Focus on specific services rather than full banking operations
Business Model
- Revenue through transaction fees
- Partnership with established banks
- Focus on specific customer segments or services
- Build brand and customer relationships while bank handles backend
Sam Parr
Host of MFM and fitness influencer
Sam Parr is a serial entrepreneur and business media pioneer.
In 2016, he founded The Hustle, a business news media company that started in his kitchen with just $12 and grew to eight figures in revenue.
Sam led the charge in making newsletters popular when few believed in their potential.
After four successful years, he sold The Hustle to HubSpot, a publicly traded company. Now operating as HubSpot Media, The Hustle reaches 3 million readers daily, employs a team of nearly 100, and has been the launchpad for dozens of its staff to found their own media companies and newsletters.
Sam remains the host of the popular business podcast, My First Million, and continues to start and sell companies. He also co-founded Hampton, a highly vetted community for entrepreneurs, founders, and CEOs, and teaches people to write better through his platform, Copy That.