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Hi, fintech fam! 💜

Who’s ready for the long weekend? I know I’m ready to slam my laptop shut until Tuesday.

Finishing my book manuscript this week took a lot out of me, and I look forward to resetting my nervous system. (Pre-order Fintech Feminists here, and make all those long hours of work worth it, bestie).

Before we get into the news, be sure to join us for the Fintech Is Femme Founders Summit on June 3, the perfect start to NY Tech Week!

My goal for this event is to attract more female founders in fintech by teaching them everything they need to know about the journey—from fundraising to going to market to corporate collaborations. Grab your ticket here. (And spread the word!)

Also, on May 29, I’ll be at the A.Team clubhouse for a panel discussion about the future of AI and finance. Join a cool group of fintech founders, VCs, researchers, and decision-makers! Sign up here with VIP code NICOLE.

Now, let's dive into the latest news!

WHY UPGRADE?

There’s a big difference in how the mainstream media covers fintech and how I do. Every week, I will provide you with the latest fintech news (minus the BS), profiles of inspiring women in fintech, and insightful analysis to help you stay ahead of the competition.

For our premium members, I send out updates 3x a week through our new column, "On Performance.” These columns will provide tactical advice to improve your entrepreneur and business leader performance.

Plus, premium members support female-led journalism and keep this work going. Because of your support, Fintech Is Femme is more than just a newsletter; it's a media empire and community for women to connect, learn, and support one another.

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#TRENDING

What’s Up In Fintech

Every Thursday, I share news stories and trending pieces I follow. Think of it as a way to quickly find the most important news in the fintech world.

#1 Synapse Bankruptcy Spirals

Synapse's chaotic bankruptcy has left a trail of financial turmoil, locking out tens of thousands of U.S. businesses and consumers from their bank accounts, reported the Associated Press.

Synapse filed for Chapter 11 bankruptcy on April 22, planning to sell their assets to TabaPay for $9.7 million. But when that deal fell through, a United States Trustee pushed to convert the bankruptcy to Chapter 7 liquidation.

That’s when the chaos really began.

On May 11, 2024, Evolve Bank & Trust, which relied on Synapse’s services, lost access to a Synapse “dashboard” like the control center for managing all their accounts.

Without it, Evolve couldn’t process transactions or verify account balances, freezing accounts for fintech companies like Yotta, Juno, and Copper. For almost two weeks, hundreds of thousands of users were locked out of their accounts, unable to access their money.

Even though Evolve had enough money to cover deposits, they had to account for every penny to comply with banking laws painstakingly. The situation left many users panicked and frustrated, flooding online forums with complaints and worries.

Synapse’s collapse affected more than just its direct partners. Court documents showed that Synapse had around 100 customer relationships, potentially impacting up to 10 million Americans. While regulators think this number might be inflated, the scale of disruption is still huge.

Back in 2014, Synapse emerged as one of the first "banking-as-a-service" (BaaS) providers.

Their idea was simple yet groundbreaking: act as a middleman to help fintech startups connect with traditional banks.

These startups often found it too expensive and complicated to get the necessary licenses and build systems to handle deposits, loans, and debit cards. Meanwhile, banks were struggling with the tech side of things. Synapse made it all work by bridging the gap, enabling startups to offer banking services without becoming banks themselves.

Thanks to Synapse, many fintech companies could offer cool financial products without hassle. It was a win-win, and Synapse quickly became a big deal in the fintech world.

Fast forward to 2023, and things started to go south for Synapse. It’s not the first time this company has faced controversy. Let’s not forget in December 2019, when Bloomberg reported that three women sued Synapse and its chief executive officer, Sankaet Pathak, for what they allege was a pattern of harassment and discrimination by Pathak at the company.

Traditional banks and consumer advocates have long been skeptical of the fintech model, in which companies look like banks but lack the same regulatory protections.

The chaos following Synapse’s bankruptcy highlights these concerns, showing how vulnerable fintech users are when they depend on middlemen for their financial transactions.

Why It Matters

A few key reasons:

1. Regulatory Gaps: Synapse’s failure highlights how non-bank entities that handle many financial transactions can slip through the regulatory cracks. Unlike banks, these entities don’t have the same oversight, which can be risky for everyone involved.

2. Consumer Protection: This incident shows how unprotected consumers can be in fintech. Traditional banks have FDIC insurance to protect deposits, but fintech users are left high and dry when platforms like Synapse go under.

3. Systemic Risks: Relying heavily on third-party providers for critical financial services can be a big gamble. When something goes wrong with one provider, it can cause widespread problems, as we’ve seen with Synapse.

4. Industry Scrutiny: The fallout from Synapse’s bankruptcy might lead to more scrutiny and regulatory action from bodies like the Consumer Financial Protection Bureau (CFPB). They could investigate how Synapse operated and the impact on consumers, potentially leading to new regulations.

The Synapse debacle is a wake-up call about the complexities and vulnerabilities in today’s financial world.

As fintech continues to grow and evolve, strong regulatory frameworks and consumer protections are crucial to prevent similar crises.

#2 Paying With Your Face Is On The Rise

Imagine walking into a store, picking up your items, and walking out without ever reaching for your wallet or phone.

Thanks to the advancements in biometric payment technology, this could soon be our everyday reality soon. We already open our phones with our faces and may payments with our thumbs, why not our faces?

Big names like JPMorgan and Mastercard are diving into this tech, making paying with your face more than just a sci-fi fantasy.

In Pasadena, California, a fast food joint called CaliExpress by Flippy has been making waves with its automated robot chefs. But there's another high-tech twist: customers can pay for their meals with just a glance.

Using PopID’s facial recognition system, customers register with a selfie, and from then on, their face becomes their payment method. JPMorgan is trialing biometric payments with PopID’s technology, incorporating palm, fingerprint, and facial recognition for a faster, more secure checkout experience.

CaliExpress isn't alone. In January, Steak' n Shake, a Midwestern chain, started rolling out facial recognition kiosks across its 300 locations.

Mastercard has teamed up with NEC to roll out its Biometric Checkout Program across the Asia-Pacific region, signaling a strong push towards mainstream adoption of this technology.

Visa also showcases its pay-by-palm technology at its Singapore Innovation Center, anticipating that biometric payments will become widespread in the coming decade.

With heavyweights like these investing in and promoting biometric solutions, it's clear that this technology is set to shakeup the payment landscape.

Juniper Research forecasts growth in biometric payments, predicting over 100% market growth globally between 2024 and 2028.

By 2025, they estimate that $3 trillion will be secured through mobile, biometric-secured payments.

Why It Matters

Here are a few reasons:

1. Convenience: Biometric payments offer a faster, more seamless checkout experience. No more fumbling with cards, cash, or even phones – a quick face scan is all it takes.

2. Security: Biometric data is unique to each individual, making it harder for fraudsters to replicate. This could significantly reduce the risk of identity theft and fraud.

3. Efficiency: For businesses, biometric payments can streamline operations and reduce wait times, enhancing the overall customer experience.

4. Market Growth: The projected market growth and the involvement of major financial players indicate a strong trend toward widespread adoption, which could transform how we handle transactions.

However, this technology isn't without its challenges.

Growing consumer concerns about privacy and data security are leading to a backlash against biometric systems. Addressing these concerns will be crucial to its success as this technology becomes more integrated into our daily lives.

#3 Fintech Meets The Creator Economy

The creator economy has seen explosive growth over the past few years.

In 2022, Goldman Sachs estimated its value at $250 billion, and projections suggest it could soar to $480 billion by 2027. This rapid expansion places the creator economy among the fastest-growing segments of the global economy.

Creators, ranging from YouTubers to Instagram influencers and podcasters to bloggers, are driving this growth by producing engaging and diverse content that resonates with millions worldwide.

However, managing their financial needs remains a significant challenge (I know from experience).

To address these challenges, fintech companies are developing financial solutions tailored specifically for creators.

One such platform is Wave, designed to help small businesses manage their finances.

Recognizing the unique needs of creators, Wave has partnered with the Shorty Awards to launch the second round of the Elevate Creatives Fund.

This initiative provides much-needed financial support to creators, enabling them to pursue and expand their creative projects without financial constraints.

Last year, the fund awarded $120,000 to various projects, including those focused on disability pride, financial literacy, and climate action.

Kerry Reynolds, VP of Marketing at Wave, emphasized the importance of managing business finances and access to funding, noting that these are top sources of stress for creators.

Creators face several financial hurdles, from payments and banking to financing. Traditional financial institutions often fall short in addressing these needs, prompting fintech companies to step in with solutions.

1. Payments: Sending invoices and collecting payments can be a major pain point for creators. Traditional processes are slow and cumbersome, with payments taking up to 90 days to process.

2. Banking: Setting up business accounts and obtaining credit cards is another challenge. Traditional banks' strict requirements often exclude creators, forcing them to use personal accounts for business expenses. Neobanks like Karat are leveraging digital technology to offer FDIC-insured business accounts and tailored financial products. Karat, for example, uses non-traditional metrics like social media engagement to underwrite business credit cards.

3. Financing: Access to capital is crucial for creators looking to grow their businesses. Traditional financial institutions struggle to understand creators' unique revenue streams, making it difficult to provide adequate financing.

Why It Matters

The rapid growth of the creator economy and the rise of fintech solutions are reshaping the financial landscape in several important ways:

1. Fostering Innovation: By addressing the unique needs of creators, fintech companies are driving innovation in the financial sector, leading to new products and services that benefit a broader range of users.

2. Boosting the Economy: The creator economy is a significant driver of economic growth. By supporting creators with tailored financial solutions, fintech companies contribute to this growth and help to sustain a vibrant and dynamic economic segment.

3. Redefining Financial Services: The collaboration between fintech and the creator economy challenges traditional financial institutions to adapt and innovate, leading to a more inclusive and responsive financial ecosystem.

As the creator economy continues to expand, fintech's role in supporting this growth will become increasingly important.

By providing creators with the financial tools they need, fintech companies empower individual creators and contribute to the global economy's overall health and dynamism.

_{MARK YOUR CALENDARS}

Join us every Thursday to stay updated on the top fintech events each week! These events are a great way to network, learn, and connect with our fintech community. Let's fill our calendars with these awesome events - I would love to see you there! If you have an event to share, please inform me!

_{WEDNESDAY 5/29}

[NEW YORK]: The Future of Finance Salon 

On May 29th, join me and an invite-only group of fintech founders, VCs, researchers, and decision-makers for a Generative AI Salon dedicated to the future of finance in NYC.

‍The evening will kick off at 5:00 PM at the A.Team clubhouse with cocktails and networking, followed by a series of lightning talks, and a panel discussion to explore real-world use-cases where AI is already transforming the fintech landscape.

Sign up here with VIP code NICOLE – and please feel free to extend this invitation to any team members passionate about leveraging new technology for financial innovation.

PS: If you can't attend in person, you're welcome to join virtually from 6-7 PM.

_{MONDAY 6/3}

[NEW YORK]: Fintech Is Femme Founders Summit

I am thrilled to announce two of our KEYNOTE fireside chat speakers at the upcoming Fintech Is Femme Founders Summit on June 3 as part of NY Tech Week.

Lisa Carmen Wang stands out as an unapologetic force.

From her impressive athletic career as a four-time USA National Champion and Hall of Fame Gymnast to her current ventures as a Serial Entrepreneur, Investor, Keynote Speaker, Executive Coach, and Author - Lisa is a true powerhouse.

Through her company, BAD B*TCH EMPIRE, Lisa is not only building unapologetic worth and wealth for women but also investing in female-led businesses that are making an exponential impact.

In this talk, she’ll teach you how to strategize your fundraising process and secure the bag.

Stephany Kirkpatrick is a digital leader with over 15 years of work in different types of companies, from new startups to big corporations.

She started her fintech company, Orum, in 2019 because she believes in fintech’s ability to build a better financial system. She has spent the last decade building technology to optimize financial outcomes for Americans — first at LearnVest where she helped design its financial planning software and now at Orum. In 2022, she secured $22 million in Series B funding to keep building on Orum’s mission to improve finance for everyone.

Join us on June 3 to hear Stephany share her insights on building, raising, and growing a startup.

_FINTUNES

🎵 NIKI - Too Much Of A Good Thing

Another fabulous AAPI artist to add to your playlists.

That’s all for now! Stay safe, everyone. Hug your loved ones. See you Tuesday!

Love,

Nicole

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