Uncle Sean's Update - 2/9/24

Happy Friday!!!
 
Don’t forget to sign up here for free to get the Uncle Sean Update sent straight to your inbox every week!  Here is the Uncle Sean Update for 2/9/24:
 

• 👀 DCI announced a new partnership with Ponce Bank (FDIC 31189) to provide sidecar core processing for the bank’s digital branches and fintech services.  The PR goes on to state that “Ponce Bank is currently processing its main bank on a different core than DCI…  Using DCI as its sidecar core, Ponce Bank will begin processing a digital offering that will provide immediate volume for the bank. And, by using DCI’s iCore360 and APIs solution, the bank will have no middleware, eliminating excessive contracts, extra points of failure, and higher costs for the bank…” (bold emphasis added by Uncle Sean).
  • A true core-agnostic solution with no middleware?!?!?!  Yep – here comes an Uncle Sean Nerd Alert warning as I go “off the rails” with some unsolicited commentary! 🤓
    • FYI - I did confirm that Ponce’s legacy core processing vendor is not DCI, but one of the big three cores (source: FedFis FinTegration Ecosystem©).  To complicate this even further, Ponce is “core strategic” (meaning the core vendor is also the online and mobile vendor) which can sometimes make third-party vendor integrations difficult to say the least.  So yes – this is a true core-agnostic solution for fintech processing as well as a direct digital bank (DCI refers to this as a “digital branch”) from a company that has 60 years of experience in regulatory scrutiny and compliance as a critical vendor and bank core processor. NICE!!! 🚀
      • Full disclosure – Uncle Sean is a big fan of the direct digital bank model (a division of the chartered institution – such as Bankers Lender, a division of Texas National Bank in Sweetwater, TX) as it allows the bank to focus on a target market / niche solutions while owning the tech stack and compliance.  Kind of like a bank launching their own fintech brand in house.
      • And for BaaS Sponsor banks – it’s time to ditch the FBO model when the subledger is via third-party middleware or at the fintech brand level…  One doesn’t have to look very hard to see a correlation (even if it is just perceived) between recent enforcement actions and newer third-party BaaS middleware / connector platforms.  I think we can all agree that we have pushed FBO functionality WAY past its original design. 
        • So, say it with me out loud (in protest style chant), “Just say no to F-B-O!  Just say no to F-B-O!  Just say no to F-B-O!” 🤠
        • All kidding aside - great work to the entire DCI Team!!!! 😊

 

• Hey – check out H&R Block as their banking app (Spruce) sees deposits nearly quadruple YoY to $456M.  Almost as impressive is the fact that more than 30% of customers that signed up for the app were not H&R Block tax clients – presenting a compelling cross-sell/upsell opportunity.  Wowza!!!!

 

• JPMorgan Chase announced plans to open more than 500 branches over the next three years.
  • Ah yes – enter “Ye Ole Branch Debate” - LOL…  Is it personalization via human interaction that we seek at the branch; or do we simply enter the branch because of online or mobile technology limitations???  Personally (not that anyone cares about my opinion anyway 😊), I think it’s a combination of both with many variable demographic differences (i.e. age, cultural perceptions, education, location, income, etc.) sprinkled in for good measure.  Effective target marketing still matters across all channels; and true digital transformation of an entire society takes a really, really long time – I still have cash in my physical wallet (admittedly not very much, but it is there).

 

• Carter Bank & Trust (NASDAQ:CARE, FDIC 58596) announced the launch of Carter ZEscrow.  “Developed by ZSuite Tech, Carter ZEscrow is a digital platform that streamlines the escrow process. It provides customers with a secure and reliable way to handle their transactions, including account management, reporting, tax forms, and more.”

 

• AtoB (payments platform for the trucking industry) announced a new global fuel card partnership with Mastercard making them the exclusive payments network for AtoB’s commercial card program powered by Highnote. 
  • Previously Visa specific, the press release goes on to state “the rollout of the new card system will begin in the first half of 2024. Existing customers will receive their new Mastercard cards by mail. Existing cards will continue to work until new cards are activated.”

 

• Trustly (pay-by-bank open banking platform that has been consistently expanding in the US) has partnered with MX via their MX Data Enhancement to provide clear and actionable information for Trustly’s merchants (think rewards, promo’s, etc.).

 

• PSCU/Co-op Solutions announced a new BNPL solution across legacy Co-cop payments ecosystem and allowing cardholders to choose qualifying transactions to pay back in installments without having to complete a loan application.

 

• More BNPL…  Citi has selected ChargeAfter as a technology provider for its Citi Pay® BNPL products including Citi Pay® Credit (digital cc embedded at POS) and Citi Pay® Installment Loan.  Check out (pardon the intentional pun 😊 LOL) ChargeAfter’s embedded lending platform for POS financing at chargeafter.com.

 

• And it seems lately like the week is not complete until we have another CU buying a bank…  This week it is Empeople Credit Union (charter 68598; $2B Total Assets) to acquire TSB Bank (FDIC 17208; $182M Total Assets).
  • Now we are up to 5 CU acquisitions of a bank thus far in 2024 compared to 11 in 2023, 16 in 2022, 13 in 2021, 7 in 2020, and 16 in 2019 (source: FedFis M&A database).

 

• Interesting personnel moves this week:
  • Stash announced executive appointments of Steven Hodgeman as Chief Financial Officer and Jackie Stern as Chief Marketing Officer.
  • Plaid welcomes Jennifer Taylor as their first President.

 

• Notable FinTech funding for the week:
  • Rain (EWA + financial wellness platform) raised $300M in Capital from a new credit facility.
  • Overflow (infrastructure platform for cash and non-cash charitable giving) raised  $20M in Series B funding round.
  • Closinglock (fraud prevention platform for real estate earnest money and closing transactions) raised $12M in Series A funding round.

 
 
Random Uncle Sean stuff:

• We lost the legendary musician Toby Keith this week at the age of 62 after a battle with stomach cancer.  The New York Times has a good article covering his career including a run of shows in Las Vegas as recent as this past December.  Rest in peace, cowboy (me raising my red solo cup in salute).
• Have fun watching the Super Bowl (and the commercials) this weekend – but DON’ T FORGET that Valentine’s Day is next week!!!!!! 💝

• Speaking of….  Here are a few Valentine themed Bad / Dad Jokes:
  • This Valentine’s Day, don’t forget to wish all of your single friends a Happy Independence Day!!!
  • The only difference between a $20 steak and a $50 steak is Feb. 14th… 😲
  • If you were a triangle, you’d be acute one… 🤓💘
  • Cupid’s favorite band is….  Kiss!  🤘🎸
  • And lastly, Aunt Patty said my smile can light up the whole psych ward… Awwww…😆🙃🤪

 
 
Have a GREAT weekend and please stay safe!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at [email protected] | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | [email protected] #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.