What's Sila's perspective on BaaS approaches: suite of products vs individual solutions, and which has more potential for demand consolidation?

If I'm being honest, I expect to see another ten consolidated platforms, at least, launch in the next 18 plus months. And I expect to see not quite as many point solutions, but more of those as well. Then I expect all of them to grow rapidly for the next decade.

The best example to look at is -- I don't know what to call it, fintech 1.0? Look at Fiserv, TSYS, Jack Henry, FIS, Visa DPS, and the whole wave of financial technology that got started way back, as early as in the late 1960s. You look at the volumes of those guys: any one of those guys does way more volume than the entire fintech industry combined. Those guys are massive. They're just built on mainframe technology that's 40 years old. You'll find that I just named a few large companies, but there's another 50. And you see the same things across all of them.

What you end up seeing is that a lot of the smaller credit unions and community banks end up being a Fiserv shop or an FIS shop or a Jack Henry shop. They have a Fiserv core, and they just use everything that Fiserv sells them. You look at the larger banks, and they tend to be much more bespoke, because they have massive scale. It's not just about six branches and 200,000 users; it is about 2,000 branches and 10 million users and transacting multiple billions a day. At that point, they're like, "No, an ACH system that is good enough is just not good enough. It has to be the best in class. If I get a better ACH system, I can have 200 less people who are doing ACH jobs, and I will pay for that and source it and install it." That's how they end up doing it. The problem for them is just that their entire tech stack is three generations behind.

I expect that fintech 2.0 will not end up looking exactly the same, but will follow some of the same lines. I don't think consolidated platforms will eclipse everybody, and I don't think point solutions will eclipse everybody either. There are folks who will gravitate towards point solutions, and those who will gravitate towards consolidated. Then there are folks who'll migrate from one to the other.

I do think that for the largest companies and the scale players, they need best of breed. It's hard because you get to this point where return processing, chargeback processing, or these tiny things that you don't think about on day one, become massive. Suddenly, you have 50 people in a room somewhere just solving that problem at scale.

I broadly prefer Bo's approach and align with Bo. Of course, they're partners of ours, so there's no surprise there, right?