Stripe: What We Can Learn from Big Fintech

Hey, GonzoBankers. Tony DeSanctis with another hot take.

Wanted to talk a little bit about one of the big fintechs in the space, Stripe.

For those of you who don’t know Stripe, Stripe is the second-largest fintech essentially in the world, at a recent valuation of about $91 billion.

Stripe has done a couple of things that I think are interesting, not only strategically for them, but also that are key takeaways that our community banks and credit unions could be thinking about as well.

The first thing is they applied for a special-purpose bank charter in the state of Georgia so that they can leverage that bank charter to begin offering their merchant services without the need for a sponsor bank.

So instead of relying on Wells Fargo or others who dictate terms, pricing and controls, Stripe is now owning that relationship directly and doesn’t need a third party involved in that.

So when we think about ourselves as banks and credit unions, how do we own more of our process and have more control over how we run our business from a customer experience perspective? I think that’s a good takeaway.

Stripe is going to be able to use that new banking relationship to potentially not only improve their margins, but also as an opportunity to potentially do business with folks that maybe their sponsor banks weren’t comfortable with.

So some of the more challenging merchants, if you will, the cryptos, the gambling and some of those other solutions that maybe their sponsor banks weren’t comfortable with, now they can do business with them because they’ve expanded their scope by owning that relationship and having a more end-to-end solution.

The second thing they’ve done, which I think is a really important takeaway for our clients, is they have been pretty public about inviting customers to their executive meetings.

And I think this is a really important takeaway. We’ve done this at Cornerstone with a number of our clients as well, to bring them into some of our leadership meetings to discuss the challenges and difficulties that our customers are facing, how we can help them be successful, and also give us candid feedback about our delivery and our products.

And I think our bank and credit union clients can do the same thing by inviting their customers and letting the senior leadership hear about the headwinds and the challenges that our customers are experiencing with us as an institution to help us try to solve those problems.

It really resonates, and it really creates a collaborative environment to create those solutions.

So while I don’t expect any of us to be at $91 billion valuations anytime soon, I do think Stripe has some really good examples of ways that we can be more successful as financial institutions in the market.

So let me know in the comments what you think, and we’ll talk to you soon.