Fintech startups tackling every layer of banking stack, from core tech to KYC/AML, enable startups and companies like Apple to start adding financial services
This is an abbreviated version of a presentation I gave live at the a16z Summit in November 2019. You can watch a video version on YouTube.
Andreessen HorowitzAngela Strange
Context & Ripple Effects
The a16z thesis lands mid-arc in a shift the coverage has been tracking for years: US startups that once set out to disrupt big banks have largely pivoted to building on top of bank infrastructure instead. The new move is to go one layer deeper — supplying core tech, payments rails, and KYC/AML compliance as components any company can assemble.
First-order effects
Bank-infrastructure vendors like FintechOS, which just raised a $14M Series A for bank- and insurer-facing automation, gain a larger addressable market as financial services become pluggable rather than proprietary.
Second-order effects
Non-financial brands become direct competitors to banks: Apple's reported plan to add payment processing, lending risk assessment, credit checks, and fraud analysis in-house (per Bloomberg) is exactly what componentized banking stack makes feasible.
Third-order effects
If embedding finance keeps lifting SaaS revenue per customer by the 2-5x range a16z cites (its own analysis), distribution shifts from institutions to software platforms — while Asia's cash-burning fintech challengers (per the Financial Times) show the model only works when the stack layers are rented, not rebuilt.
The trend: Financial services are unbundling into rentable infrastructure layers, letting consumer platforms assemble banking products without becoming banks.
Brilliant take by @astrange of @a16z on the future of fintech and how every company will be a fintech company. It's exactly why @Visa bought @Plaid - to allow for the democratization of financial services and give power and choice back to the consumer. https://a16z.com/... https:…
The “as a service” infrastructure is coming to banking. To understand why this is such a big deal, we need to look at how complex the banking stack is today. Ever wondered what it takes to start a bank? Here's a simplified version: (via @astrange @a16z) https://a16z.com/... https…
1/ Really enjoyed this presentation and post by @astrange on the coming wave of innovation in fintech. If you're interested in this space, this is a good one to spend a Sunday morning watching and reading. https://a16z.com/...
No one loves their bank—it's why nearly 2,000 fintech companies launched last year alone. @astrange explains how these co.'s are shaking up the status quo, and why that means more choices, better products, & lower prices for consumers: https://a16z.com/...
It took me 1.5ish years thinking through what the future of financial services would look like & what role software cos would play in it. I got to similar conclusions as @astrange articulates here : https://twitter.com/... Now I get to execute on it and mix SMBs, 🍕 & 🤑 https://tw…