Sankaet Pathak, our co-founder and CEO, was interviewed recently by Jess Larsen on his podcast “Innovation and Leadership”. Here are some excerpts from that interview.
Jess: Tell us what it means to build fintech infrastructure, and exactly what you guys do, then I would love to cover some of the stats you guys have hit.
Sankaet: High-level we are a banking-as-a-service (BaaS) provider based in the U.S. We started this business before the segment name even existed, so we weren’t called a “BaaS provider” we were just called this company that has APIs for banking. If you’re a (fintech) developer … and you want to build U.S. financial services products for U.S.-based individuals, or people who don’t even live in the U.S., we enable you to open up deposit accounts, credit accounts, crypto accounts, issue cards, do automated savings, all of these different things. We, based on all public numbers we can scavenge, are the largest BaaS player based in the U.S.
Jess: Being in the top 100 fastest-growing financial services companies in the country, can you tell us how many users, how many companies, some of these kinds of numbers that are public?
Sankaet: Yeah, 200+ fintech companies built on top of Synapse. We’ve crossed over 10 million end users that we serve on the platform. Processing significant volume through our entire infrastructure. I believe the last numbers were over $70 billion in annualized processing run rate on transactions and over $10 billion in deposits. We’re growing quite quickly. Super excited about all of the customers that build on top of us.
Jess: I love the way you’ve described it in the past, “We want to make it so you don’t have to know everything about business and fintech to provide a better financial experience to your customers.” Can you talk about that concept?
Sankaet: Yeah, for sure. This is the power of platforms generally, right? The more complexity you reduce, the more people you will impact. In our case, the domain we focus on is fintech. From the very beginning … the vision of Synapse has been – how can you provide deposit, credit and investment products as an infrastructure solution and make it so easy that you’d have to know nothing of financial services to be able to embed it. Because behind that there's a belief which is – the easier we make embedding and scaling financial services, the more defacto it’s going to become. Even Elon (Musk) was talking about issuing money market funds and debit cards for Twitter. We think that is the future. We think, over time, financial services will get embedded in all the (social media) platforms, but that won’t happen unless you make it very easy to embed.
Jess: I remember somebody was interviewing you once and said something like “So you’re telling me I could make my own version of Chase Bank?” (That) with a little bit of knowledge, you can make something better than Chase within like a month. Can you talk about why that’s possible?
Sankaet: So if you take the components of what a Chase checking account is: a bucket where you put money, various payment protocols to pull money in and out, a card you can use for convenience, and you can connect your payroll and other things. Over the course of 8 years, what we (Synapse) have done is made that really easy. You have APIs available just like if you wanted to build two-factor authentication with Twilio or embed some Facebook SDK into your application. So it’s super easy. You pick up those APIs, and you put them together. Our customers still have to build the interface and address financial fraud. We’re not at a point where we help with those two things just yet. That’s where I want to get to.
Before Synapse existed, you had to be very sophisticated in financial services to be able to build these services, and it would take you years to do so. Now you (only) have to be low-to-moderately sophisticated in financial services, have some appreciation for compliance, know that you’re going to have to deal with financial fraud, and build out an interface and a customer support channel. (Now) the barrier to entry is very low.
I think (today) people have built products that are far, far better than Chase. I feel like the second inning (future) is how do you now expand the reach of a product like that to people who don’t even live here (in the U.S.), and give everyone the same (financial) comfort and stability that people in America have gotten pretty used to.