How to assess commoditization risk in BaaS considering infra layer, given FinTechs own the customer relationship?

It's fairly high, but then at the same time, there's fairly high switching costs. So you really, really have to want to change because every time you change, your customers will get a new account number and routing number, because it'll change to a different bank, which is a pain.

Imagine having to change all your own sort code and account number with whoever you bank in the UK, then you have to change all your cards because every time you go to a new bank, you have to then get a new pin number because every bank will sponsor a unique pin for each FinTech developer.

So there are very high switching costs to move from one to the other.

It's not unheard of. We know that Galileo uses Synapse as their path for customer acquisition, because they tried to cherry pick our biggest and high profile customers. But then Galileo has got its own problems with stability and servicing. So there is a continual tension between all the players e.g. Galileo, Synapse, Unit, Treasury Prime.

But ultimately at the end of the day, one could say a bank account is a bank, wherever you get it from. It's always going to have the same features, deposit, insurance, while interest rates are so low right now, arguably close to zero, if not zero, there's no real differentiation there. 

And so many of the things that we look at and specifically as we were looking to avoid becoming commoditized, is that product mix to keep ahead of what our competitors are doing. So it's more than just an account and trying to get better stability, better pricing, better customer service, or platform support, better platform stability, just uniqueness when it comes to, like I mentioned, the Unit Go service, where developers can launch on the same day a financial product, as an app.

That's why they're doing that to get developers to use their services and therefore they can have that stickiness for wanting to keep them for a long time.

Certainly, there is a very quick commoditization happening. And so it's differentiation on the more value added services you can offer. Can you help them fight fraud? Can you make sure that they've got better education to launch their services faster? Can you give them a more stable platform to offer those services? Can you differentiate to learn that product mix? It's probably the biggest pains that you'll have, but ultimately, in three years time, do I think there's room for 4 or 5? Sure. But certainly, I don't see there being 10 or 11 or 12 Banking-as-a-service providers in the States.