From Connectors to Decisioning Layers
Charles Birnbaum, partner at Bessemer Venture Partners, on the five waves of fintech
The key test is whether a startup is removing expensive judgment work, not just wiring systems together. In fintech infrastructure, the richest companies turn messy, fast changing workflows into a product a bank can trust for revenue and risk decisions. Alloy fits that pattern because it helps banks set onboarding rules, call many identity and fraud vendors, and raise approval rates without taking more fraud losses.
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Middleware mostly passes data from point A to point B. A rich layer makes decisions or saves a team from building and maintaining that logic themselves. In Alloy's case, the customer is buying identity decisioning, fraud controls, and workflow tuning, not just an API connection.
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The pricing signal is concrete. Charles Birnbaum frames universal API businesses as often broad but lower contract value, while richer orchestration products earn larger contracts because they tie to clear business outcomes. That is why Alloy sells into both fintechs and large banks, including Ally Bank, with an enterprise motion.
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This pattern shows up across infrastructure. Pinwheel and Finch both start with aggregation and standardization, then move up into higher value actions like direct deposit switching, underwriting inputs, and payroll deductions. The connective tissue becomes durable only when it unlocks a workflow the customer cannot easily recreate in house.
The next phase in fintech infrastructure is more value moving from connectors into decisioning, workflow software, and proprietary data products. As fraud patterns shift and more providers enter the stack, the winners will be the teams that sit in the middle of customer workflows and measurably improve approval rates, conversion, and loss outcomes over time.