Former Uber Money head launches Synctera
The former head of Uber Money and Google Wallet has launched a new enterprise bridging the gap between community banks and fintechs.
The brainchild of Peter Hazlehurst, Synctera’s premise is simple: it connects small, community banks and pioneering fintechs, alleviating much of the regulatory and resource-intensive heavy lifting that in the past made such matches unfeasible.
Synctera launched this week out of stealth with $12.4m in seed funding from a consortium led by Lightspeed, alongside Diagram Ventures and high profile angel investors including Zachary Perret, Max Levchin, and Alexa Von Tobel.
Hazlehurst says the ‘matchmaking’ marketplace opens new doors for both sides of the coin and meets “immense demand”. It will remove much of the regulatory concerns of small banks, as well as the operational overheads associated with managing the partnership. Fintechs, on the other hand, will gain access to a new seam of banking partners to tap into in order to offer FDIC-insured accounts and cards.
The first partnership to come to fruition through Synctera’s model is between between One, a new digital banking platform, and Coastal Community Bank, whose President/CEO, Eric Spring says was simply “not set up to handle the amount of backend work needed to manage our relationships.”
Sprink expects the number of fintech partners it can now work with will double thanks to Synctera’s new model, adding: “Synctera has allowed us to focus our energy on serving our core market by helping us with partner management.”
Battling back against COVID-19
As well as meeting existing demand in the market, Synctera aims to create new revenue streams and partnerships to reinforce the small banks and fintechs that have taken much of the strain of the COVID-19 pandemic.
“Like most small businesses, community banks have been hit hard by COVID-19,” Hazlehurst says. “At Synctera, we hope to further diversify community banks’ revenue streams, enabling them to do what they do best—support their local towns and cities, while allowing them to grow at scale.”
Collaboration is key
In a recent feature for FinTech Magazine, Georgy Sokolov, co-founder of crypto digital payments platform Wirex, told us that “creating a bridge between the traditional financial infrastructure and the new digital one” would be key to the future growth of financial organisations of all sizes.
Aleksander Leicht, Head of Banking Alliances, Elavon Merchant Services, Europe, spoke of a "delicate balance" of such partnerships that nevertheless yield immediate advantages to both sides: banks gain the agility and innovation of fintechs, while offering decades of customer loyalty, scale and established networks in return.
Read our full feature: Fintech and banks: competing through collaboration