Imagine a world where the backbone of finance isn’t built by legacy institutions but by agile startups with code-driven ambitions. That’s not science fiction—it’s the reality we’re hurtling toward, and Increase’s recent pivot to becoming a bank is a masterclass in how the financial landscape is being rewritten. This isn’t just another tech company getting a banking license; it’s a seismic shift in who controls the levers of money movement. Personally, I think this move signals a deeper cultural reckoning: the old guard’s grip on financial infrastructure is slipping, and the new era is being forged by engineers, not economists.
Let’s unpack what this means. Increase, once a facilitator for FinTechs like Stripe and Gusto, has now built its own bank. But here’s the kicker: this isn’t just about convenience. It’s about power. By creating a bank that’s ‘engineered for FinTech needs,’ Increase is essentially saying, ‘We understand your pain points better than the banks you’ve been relying on.’ What makes this fascinating is the irony—it’s a FinTech building a bank to serve other FinTechs, which feels like a recursive loop of disruption. In my opinion, this is the ultimate expression of the ‘banking as a service’ model, where infrastructure is no longer a bottleneck but a launchpad.
Consider the implications. Traditional banks have spent decades perfecting the art of slow, risk-averse innovation. They’re built on layers of compliance, bureaucracy, and a mindset that prioritizes stability over speed. But FinTechs? They’re digital natives. They thrive on agility, APIs, and real-time data. When Increase integrates its banking core with the Federal Reserve and Visa, it’s not just ticking boxes—it’s creating a bridge between the analog and digital worlds. A detail I find especially interesting is how this move allows FinTechs to bypass the ‘middlemen’ of traditional banking, giving them direct access to payment rails. This raises a deeper question: If the infrastructure is now customizable, what happens to the banks that once controlled it?
And let’s talk about the numbers. The FinTech sector is growing at a blistering 21% year over year, generating over $650 billion in revenue. That’s not just growth—it’s a revolution. What many people don’t realize is that this growth isn’t happening in a vacuum. It’s a direct response to the failures of traditional banks to keep up with consumer demand. If you take a step back and think about it, the rise of FinTechs is less about technology and more about trust. People are starting to believe that their financial needs can be met by companies that understand their digital lives, not just their checkbooks.
But here’s where it gets really intriguing: the cross-border payment data. While traditional banks still dominate among SMBs, 36% of internationally active businesses are now eyeing FinTechs for cross-border transactions. That’s a 6% jump in just a year. What this really suggests is that SMBs are tired of the friction, fees, and opaque processes that come with traditional banking. They want speed, transparency, and simplicity—and FinTechs are delivering. From my perspective, this is the canary in the coal mine. If even the most risk-averse SMBs are shifting, the writing is on the wall for legacy institutions.
So what’s next? I suspect we’ll see more of these hybrid models—companies that straddle the line between FinTech and traditional banking. But there’s a catch: regulation is still a wild card. Increase’s FDIC membership is a big win, but the regulatory landscape is a minefield for innovators. The question isn’t just whether these new players can scale—it’s whether the system will allow them to. One thing that immediately stands out to me is how this shift is forcing regulators to rethink their approach. If the future of finance is being built by code, then the rules of the game need to evolve too.
In the end, this isn’t just about banking—it’s about power. The control of financial infrastructure has always been a zero-sum game, and Increase’s move is a bold declaration that the rules are changing. Whether this leads to a utopia of democratized finance or a new oligarchy of tech giants remains to be seen. But one thing is certain: the future of money is being written by those who dare to reimagine it.
