Rex Salisbury, partner on the Fintech team at VC firm Andreessen Horowitz (A16Z) and founder of Cambrian, a community at the “white-hot center” of Fintech, reveals that partner banks have “exploded” in recent years.
Salisbury confirmed that today, there are over 30 partner banks, which represent “hundreds” of Fintech relationships and financial services.
He clarified that partner banks refers to chartered institutions that offer Fintech firms access to banking products.
Salisbury noted that partnerships come in “all shapes in sizes,” from giant Wall Street investment banks such as Goldman Sachs (NYSE:GS) and Marcus, which powers the Apple credit card, to Hatch Bank, which currently has around $68 million in assets and began operations with a single Fintech partner.
He adds:
“Why the sudden increase? It’s a win win. Fintechs can offer banking products without being a bank. [Meanwhile,] banks can improve returns with low-cost deposits and/or asset-light fee streams.”
According to data and research, many partner banks have “above average returns,” Salisbury claims.
He argues:
“As the partner bank network has grown and fintech time-to-market has decreased, entrepreneurs are better equipped than ever to continue innovating in financial services.”
He acknowledges that it’s a “complicated many-layered space.” His firm’s goal has been to offer “greater visibility.”
Salisbury currently runs Cambrian, a 3,000+ member community for founders and product leaders focused on developing Fintech products with chapters in San Francisco and New York City.
Salisbury has experience working with product and engineering teams at Checkr and Sindeo, automating background checks and mortgages, respectively.
He has also previously worked as an investment banker at Merrill Lynch, where he focused on the real estate sector.
In addition to general Fintech, Andreessen Horowitz is heavily invested in the crypto and blockchain space. The VC firm had established a $300 million hedge fund for digital assets back in 2018, and recently launched a $500+ million fund focused on crypto-assets.