March 2020 - Vertical Neobanks

If you’re issuing cards or building a neobank, a subtle but important choice to make is who you partner with as an issuing bank.[1] The bank is a critical part of the banking as a service ecosystem. Roughly speaking, you as the neobank play the marketing and customer facing role, the banking-as-a-service partner you work with plays the technical in... See more

Brief: Banks are increasingly replaceable. "Embedded finance" makes it easy to deliver financial services in context. Over time, that may result in money gravitating towards influencer-run financial institutions. This could have significant ramifications for how society manages its surplus.

Vertical markets are particularly good candidates for a SaaS+fintech business model. While customers in horizontal markets often try different software vendors, resulting in multiple winners in a market segment, customers in vertical markets prefer purpose-built software for their specific industry and use cases.

Financial institutions were built to on-board people as customers (retail) or business owners as customers (SMB); however, today there is a new class of users needing access to the underlying financial infrastructure these banks use - developers.