"The companies that spent the last decade promising to disrupt banks are now building their foundational systems. Coinbase, once the crypto outsider pitching digital assets as banking's alternative, is powering J.P. Morgan's deposit token experiments. SoFi is routing remittances through Bitcoin's Lightning Network while acting as a regulated bank holding company. Even pure-play digital banks like Chime have shifted focus from pure customer acquisition to deepening existing relationships through credit products and early-pay services."
"The shift represents a fundamental recalibration of where value gets created in financial services. The loudest disruption stories of the 2010s have given way to quieter infrastructure plays. Fintechs discovered that being the pipes can be more profitable than owning the customer relationship. The economics tell the story. Customer acquisition costs for consumer fintechs can range from hundreds to thousands of dollars per user, with lengthy payback periods and a constant risk of churn."
Fintech companies that previously aimed to disrupt banks are increasingly building foundational infrastructure for established financial institutions. Examples include Coinbase providing blockchain capabilities for J.P. Morgan, SoFi routing remittances over Bitcoin's Lightning Network while operating as a regulated bank holding company, and digital banks like Chime focusing on credit and early-pay services. Infrastructure models produce transaction-volume revenue with scalable enterprise integrations and avoid high customer acquisition costs and churn. Partnering with regulated institutions offers regulatory credibility and compliance advantages. Competitive advantage accrues to firms that control transaction pipelines and integrations, remaining invisible to consumers but essential to institutions.
Read at Tearsheet
Unable to calculate read time
Collection
[
|
...
]