‘They need to kick the tires’: Karen Petrou on bank-fintech alliances
By Penny Crosman
The bankruptcy of bank-fintech partnership middleware provider Synapse and the many consent orders banks have received from regulators regarding their fintech relationships have formed a dark cloud over banking as a service. The way forward should include much more due diligence on banks’ part, according to Karen Petrou, co-founder and managing partner of Federal Financial Analytics, a Washington, D.C. firm that provides analytical and advisory services on legislative, regulatory and public-policy issues affecting financial services companies. “I think they really need to kick the tires and not just look at the fee revenue, but at the resilience of their counterparty in these deals,” Petrou said. “Clearly one of the issues with Synapse is at least a hundred million dollars of customer money is missing, and while [compared to] the scale of trillion dollar financial crises, that might not seem like a lot, it’s a lot to the individual households,” she said in a recent American Banker podcast….