Welcome to Breaking Banks, the number one global fintech radio show and podcast. I’m Brett King. And I’m Jason Henricks.

Every week since 2013, we explore the personalities, startups, innovators, and industry players driving disruption in financial services. From incumbents to unicorns, and from cutting-edge technology to the people using it to help create a more innovative, inclusive, and healthy financial future. I’m J.P. Nichols, and this is Breaking Banks.

Welcome back to Breaking Banks. I am your host, Brett King. And this week, we are being supported by our good friends at MasterCard.

Once again, we’re going to get into some of their amazing fintech partnership programs, and we’re going to deep dive into some of the tactical elements around embedded finance and open banking, and how that’s sort of affecting some of the bigger banks and bigger fintechs, too, in the market. Radical personalization, no doubt we’ll be talking about a bit of AI in the mix of that, too. So at this point, let me introduce Sabrina Tarani.

Sabrina, welcome to Breaking Banks. Thank you so much for having us. It’s an absolute pleasure to be here with you and alongside Jordan to discuss the topic that I think we all equally obsess about.

Absolutely. We’re going to introduce Jordan in a second. So you are the SVP of global fintech programs at MasterCard.

Here’s a sort of a question to get us kicked off. Where do you think the real action in fintech is happening globally right now, if you were to say that? You know, MasterCard perspective or just a global perspective? What’s the hottest market in fintech? Yeah, no, it’s a great question. You know, over the last decade, we’ve really seen and witnessed an unprecedented acceleration in technology adoption, particularly in commerce.

And I think over the last, you know, 18, 24 months, advances in three areas in particular have really fundamentally changed the way that we think about bringing solutions to market. And these are probably unsurprisingly to everybody, artificial intelligence, computational power, and data technology, you know, a big part of the topic that we’ll address today. And the way that these trends are converging is really propelling this acceleration of adoption forward.

And so we think that technology will become much more intuitive, much more interactive and immersive in consumers and merchants and in our customers’ daily lives. And that does have significant impacts for everything that we think about across finance, across retail, across healthcare, across insurance, across all the sectors that we jointly touch. And kind of alongside that, you know, technology surge, we’re also seeing that, you know, consumer expectations are changing very rapidly, and they expect personalization in ways they maybe didn’t before.

They’re engaging in retail experiences that have evolved dramatically, which have caused those expectations to change. And so this kind of retail and banking renaissance that we’re in is a great way for us to leverage some of these new technologies to create these more inclusive, but also better user experiences for the broader fintech ecosystem. Okay.

Well, that’s, you know, I think, you know, that’s a fair assessment of where fintech sits in sort of the landscape right now. Obviously, some of, if not, most of the fastest growing financial institutions in the world would be classified as fintech today. So it is reshaping industries.

We hear about these record profits for many players that, of course, MasterCard partners with. But today, we are going to take a bit of a deep dive into Atomic Financial. To join us on the show is the co-founder and CEO of Atomic, and that is Jordan Wright.

Jordan, welcome to Breaking Banks. Thanks for having me, Brett. Excited to be here.

So for those that aren’t familiar with Atomic, give us a little bit of information about Atomic Financial. Sure. So I would say Atomic Financial is focused on three key areas.

The first is helping our customers lead on primacy. So we work with six of the largest banks in the United States. We also work with many of the largest fintechs in the United States, including Chime, PayPal, Robinhood, Coinbase, SoFi.

We help them focus on primacy as well as these large banks and a variety of others. We have 200 financial institutions we work with. By first helping them, their customers move over direct deposit when they sign up for a new checking account.

Secondarily, we make it easy for them to move over their payments once they’ve signed up for that new checking account or new credit card. We can help move over all the payment activity, ACH and credit and debit. And then the second area that we focus on is we call it powering initiative.

So if you think about powering initiative, the promise of personal financial management tools for the last decade was this Google Maps of finance experience. And that really hasn’t come to fruition. It gives a lot of guidance, but they’ll basically just say, wow, looks like your finances are poor right now.

Sucks to be you sort of thing. And so we want to be able to provide actionable insights to them that we can then action for them that just requires their approval. So the idea of an AI agent has really taken off in the last little while.

And that’s something that we’re extremely focused on, whether it’s canceling subscriptions. The example that I’ve used a few times with people is there is a big NFL game that Peacock bought the rights to in spring of this year. And when they bought the rights to that, a bunch of people signed up for Peacock that weekend.

If my financial institution were to come to me on Monday and say, we noticed you signed up for Peacock this weekend. Would you like us to pause that subscription until the next major Peacock sporting event? And all they have to say is yes. And then we will say, okay, we’re going to need some information from you to cancel that for you.

It could be to have them log into their Peacock account. It could be some basic PII. If they want to exchange that with us, then we’ll go do that, actually take care of that action on their behalf.

And then third area is expanding access. And so we did a bunch of really neat tax stuff this year with H&R Block. So their customers were able to pre-populate a bunch of their tax information by connecting into the last company they did taxes with.

That was really exciting. We also do a lot of verification of income and employment. So we’re always looking at opportunities to expand access for consumers so they can access more things.

And to Sabrina’s point, I look at some of the work that MasterCard has done on the open banking front. And I think that’s where the magic of this partnership really comes together. The open banking stuff that they’re doing right now is really exciting for us because when you bring those two things together, you get greater personalization for the consumer.

If when I sign up for a checking account, and I connect my other bank account, and now you know who pays me and who I pay via that other checking account, now you can personalize that experience for me and provide a much better onboarding experience. So that’s a quick overview of Atomic, but also maybe a couple of interesting things we see about this partnership with MasterCard. Yeah.

Look, I think if you’re going to talk about AI agency, you’re going to have to talk about wallet-based approaches. So you’re going to have to use some sort of wallet aggregation, platforms like MasterCard are going to be essential to that. Because if I’m going to give you any advice that sort of encompasses your spending behavior and so forth, I need to know more than just what’s on a single debit card.

That’s pretty clear from an AI perspective. Just answering the simple question, hey, whatever you call your personalized AI, I think I’m going to call mine Alfred like Batman, right? So, hey, Alfred, can I afford to go out with my friends on the weekend, or do I have to stay home and watch Peacock again? It’s like, that’s the sort of granularity we’ll expect from an AI agent, I think, when it comes to our money, and not just routing our payments in the most effective way and so forth. But I want to come back to that in a minute.

Sabrina, in terms of the fintech focus, MasterCard runs a ton of fintech programs, obviously. This series has been focused really on helping fintechs build, launch, and grow businesses, and we’ve had some great examples of that. But for this particular partnership with Atomic, this came through the StartPath program.

So could you just briefly introduce that program to us? And then let’s talk about how this relationship started. Absolutely. And here I was thinking, my next question was going to be, what am I naming my AI agent? But next time for that one.

But certainly, partnerships has always been in MasterCard’s DNA. And in my own career, I have spent the last decade plus helping MasterCard build, commercialize, and scale these new payment technologies that have fundamentally changed the way that consumers and businesses think about and engage with payments. One of the first things that we did in a large, very well-known collaboration was with Apple back in 2012-2013, when we launched Apple Pay in the US.

And I spent a lot of time helping our banks ready for day one there, but also helping the broader ecosystem educate themselves about what this meant for their day-to-day lives. Really the non-believers telling them that yes, device-based payments actually were a thing. And fast forward to today, I’m pretty sure all three of us use a number of these digitized services daily.

Right. But 10 years ago, you would have thought I was crazy. But… Well, I wouldn’t have, but others would have.

You were a day one user too. I love that. But all of that to say, even as recent as 10 years ago, the idea of working with non-traditional customers of MasterCard really was still pretty foreign, not just to the networks, but to the financial institutions, larger merchants, PSPs, acquirers, and the existing ecosystem.

But what became really clear to me at that moment, as we saw this acceleration of technology, as I mentioned earlier, happening was that there were startups and fintechs inventing new ways to pay, building efficient technologies for our customers and our merchant partners, and really inventing entirely new subsets of what we had previously defined as fintech or might not even be fintech. They were fintech adjacent. And so it was the culmination of my product experience.

But in that moment, realizing that MasterCard really needs to pay attention not just to the big behemoth digitally native players, but to some of those smaller companies that were getting tremendous investments from smart venture capital firms, smart private equity firms, to see how we could also partner with those types of organizations as well. And that’s exactly what StartPath has been focusing on for the last 10 years. We’ve now become an award-winning fintech engagement program that helps who we believe to be best-in-class, high-potential fintech companies scale by providing them really bespoke and curated access to the network.

And curated in the sense that we’re bringing them in because we have a fundamental belief that they can help us solve a pain point or a challenge that we perhaps might not be able to quickly or easily address ourselves. And this is all in our shared mission, then, to connect, empower an inclusive digital economy that benefits everyone everywhere by making transactions safer, simpler, smarter, and more accessible. And so companies that join this program that we’ve built really do get not just exposure to MasterCard and some of the product collaboration that we intend to foster, but really access to our ecosystem of banks, merchants, our partners, and other digital players across the globe.

We give them a sponsor internally on my team who really is an extension of their business, really helps provide them guidance, expertise, and helps them navigate a large organization like MasterCard to make sure that they’re getting the most relevant introductions to the right decision makers internally so that we can accelerate the way that we sign these types of commercial deals. And in turn, and why we do this is because not only are these startups really helping us drive and build net new commercially viable payment products, but really helping us also look around corners, stay on the edge of emerging technologies, and giving us insights to unlock future fintech innovation. So all that to say, the genesis of our partnership with Atomic, for us, it really started with deep listening to our customers’ needs.

Many of our financial institutions and existing users of Finicity, which was the big acquisition we made in the open banking space several years ago, were asking us for deposit switching capabilities. And I know Jordan had mentioned this previously, but really just at a highest level, enabling a consumer or a merchant to move their direct deposit to a new financial institution much more seamlessly. And this, at the moment, wasn’t a feature set that Finicity believed we could build quick enough to keep up with the market demand, at least not at that time.

And so we sought to partner instead, because that’s very much, like I said, in our DNA. So we did a worldwide scan of fintechs that were operating in this space and might help close this gap for us. And we found Atomic, who actually did have a phenomenal pre-existing relationship with our leadership.

And together with Atomic, we were able to address this very important market need, but did so quickly and efficiently through our collaboration. So Jordan, I guess I’ll let you talk more about the specifics of what that collaboration actually has become, which is, in my opinion, really a case study for companies of all sizes working together to drive immense impact, mutually beneficial value and revenue for both of us, but really day one scale. You know, alone, we both might have been successful in going at this problem.

But together, the power of our partnership has become so much more pervasive and extensive. I like this. You know, this is one thing that often comes up when you talk to aggregators or platforms and they talk about why banks should be partnering with fintechs.

This is, again, something you identified in your answer just then, which is that fintechs bend space and time. They can do this faster and cheaper than you’ll be able to do it yourself. Right.

So if you want to absorb these capabilities into your stack faster, you know, into your feature set faster, then fintechs are a great place to look for this. This show is brought to you by Alloy Labs. As much as we love talking on the show, we believe that action is more valuable than talk.

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Jordan, tell us about, before we get on to the sort of origin story of how you got in this program, tell us about some of the banks you’re working with at Atomic that have been looking for this capability, the deposit switching capability, the integration into the payroll stack and things like that. Sure. I think U.S. Bank is one of the neat ones.

We just spoke at a conference with them at American Banker. You were working with Dominic over there? What was that? Dominic Ventura over there? Yeah. Yeah.

We know Dominic. Chance Lepore and I are the ones that ended up speaking together at that conference. But really, you know, the way they describe it is it starts from, if you start with the customer need and work your way backwards from there, I think that’s always the right place to start.

And so we’re a B2B2C company. And the opportunity we saw was that it’s a very poor experience switching banks. And so especially Sabrina highlighted the increased or the improvements in consumer banking in the United States in the last decade.

I think that that is the result of increased competition. 1033 is definitely something here that we pay close attention to. I know the open banking team at MasterCard does as well.

I think that will only accelerate things in the next five to seven years, especially. And so those are exciting trends that we track. And our financial institutions like U.S. Bank were looking and saying, there is an opportunity here to provide a vastly superior experience to what consumers are getting today.

And so identified opportunity in the market came to us, came to other players in the market. We ended up winning that deal. It’s interesting.

So in 2022, there was one RFP from top 25 banks in our space. In 2023, there were six of them. A lot of that due to SVB and some of the fallout from SVB because of increased liquidity requirements and a desire for more deposits.

But we’ve also already seen four or five RFPs this year so far from top 25 banks. This is a pretty interesting point. If you look at, we often talk about asset size as a metric for banks.

But we’ve seen some pretty big banks be significantly challenged, big asset size banks with deposit capture. A really interesting study came out of the Reserve Bank of India that spending a million dollars on digital deposit capture gleaned, and this was a study done from a number of the top banks in India, 300 times the deposit activity that they did, they would get through spending a million dollars on a new branch. So digital deposit acquisition would seem to be really critical, particularly if we learn anything from the SVP lesson, is that deposits can move at the speed of the internet.

So your ability to backfill that or just engage customers for deposit type taking activity is now really critical in this space. Sabrina mentioned Apple earlier, with Apple savings, what did they raise in four days? It was billions of dollars of deposits in the first few days. So there is a technical element to that.

But looking forward, this would seem to be like the need of a core competency of banks, just to be able to really do digital deposit taking really well and get the friction of that lower. Especially if you’re expecting AI to do this, and you’re going to ask your AI, just sort this out for me, then how many banks would be able to handle that capability? It sounds like pretty interesting tech that you’re working on. Hey Brett, can I make one more comment here? Sure.

Sabrina had made mention of the speed, and I think you mentioned it as well. So I just want to pay Mastercard a huge compliment here, that they’re doing something right with this program, because we had engaged with multiple of the top aggregators around the exact same time. I think our conversations with them were last summer, really with Mastercard.

We commercialized by January, I think. And we still haven’t commercialized with some of those other opportunities, private companies, that still can’t quite get to where we needed to be. And so I think that the model that they’ve built, certainly other large groups should take a look at the model built through StartPath, because it did allow for a much faster go to market.

Sabrina, technical agility would seem to be sort of at the core, not only of what Mastercard is trying to do here by sort of bridging the gap, but if you want to survive these types of transitions that are going on in the banking space now, whether it’s embedded finance or whether it’s integrating elements of AI into it, or just something simple like deposit switching, your technical agility is going to be really key to this. And this is one area with fintechs, obviously, they have brand new tech stacks. So they’ve got all of that agility.

How are the better banks that are responding to these demands? How are they thinking about their tech stack these days, would you say? Yeah, it’s a great question, Brett. And thank you, Jordan, for mentioning that Mastercard’s gotten something right here. We really love hearing that.

But you know, Brett, I think part of your question actually goes back to something you had asked a few minutes ago, which is why banks should partner at all, right? And it’s not just about the fact that these emerging technologies are creating more inclusive, better user experiences. But I think there’s also been a pretty significant narrative change, at least that I’ve witnessed in the last five years alone, which was, you know, when we used to think about fintechs and startups, it was all about radical disruption, right? Let’s break everything, let’s put banks out of business, let’s steal their customers. And, you know, there were circumstances where that was true, and there were some inherent risks in working with fintechs.

But today, what I’ve really seen and what StartPath has witnessed over and over again, I mean, now north of 450 times with the amount of portfolio companies we have in 57 countries is it’s all about radical collaboration, right? If you find the right partner, if you go into the partnership with joined and aligned incentives for why you want to work together, you can actually achieve much more jointly. I like the fact that you mentioned, and you know, Jordan mentioned this as well in the StartPath program, that you have, you know, you have someone that you tag them with, and that’s going to guide them through that process of partnership. So are you seeing banks start to get that, that they need to have a sort of a partnership function on the org chart to really focus on these types of opportunities? I mean, I know JPMorgan Chase, you know, since the pandemic, they’ve acquired alone 40 fintechs, right? So they must be doing something like this.

But what about, you know, some of the other banks you’re working with, you know, in those 57 countries you mentioned, you know, you’re starting to see that trend of a better approach to engaging fintechs as well? Yeah, absolutely. So it’s not just about, you know, technology readiness. I mean, that’s obviously very important.

And banks need to upgrade their platforms. And there’s a number of services and enablers that can help them with that. That MasterCard also engages with and provides services on their behalf.

But it’s to your point all about the rest of the organization readying itself to work with smaller companies. So you need to make sure that franchise is on board. You need to understand that startups don’t have massive legal teams.

And so every contract you go through or provide them with or even NDA, something as simple as that needs to be founder and fintech friendly if you want the relationship to work. You need to make sure that your vendor onboarding process doesn’t take, you know, seven to 10 months, but instead takes a couple of weeks and has shorter form versions of technical due diligence. So really adapting the mentality of how you think about working with partners of all sizes is equally as important as the behind the technical readiness.

And I think this is something that MasterCard has indeed invested a lot of time and effort in doing through our digital partnerships teams, through our engaged platform, which I mentioned is a suite of enablers that we work with that can help banks with some of these specific challenges. But the more successful banks in collaborating like a J.P. Morgan, like a Citi are larger organizations who have figured out how to make the entire end-to-end experience of partnership more feasible for smaller organizations with less resourcing than they do. Have there been any challenges along the way? Jordan, maybe you want to talk about that.

Not, you know, it doesn’t have to specifically be on the StartPath program, but, you know, in terms of the banks that you’re working with and so forth, what are some of those challenges that you guys have had to smooth over in that process? Certainly there have been challenges that you’re just like you’re alluding to just now, you know, some of them have robust FinTech programs and some of them do not. And so, you know, we saw two top 25 banks sign in April and go live in October last year. That was very impressive to me.

Yeah, that’s good. I also find that, you know, nothing unites a group like a common foe or a big problem, right? And when capital was a problem in 2023, you saw people unite and they just got stuff done to be able to make investments there. So, yeah, I’ve been very impressed with a handful of banks.

You know, Fifth Third has been another one that’s been very impressive to me in terms of their ability to move quickly. I think they were one of those that went from April to October live and then have already been working on next products to go live with and very good iteration testing, all that sort of stuff. Anyway, there are several that I’ve been very impressed with.

I’m pleased to hear that. I’m pleased to hear that. Sabrina, you know, when you look at the start path, you know, you talked about 430 FinTechs that you’ve engaged in 57 countries.

You know, if you were talking to a FinTech now looking at why they should come into this program, you know, what is some of the outcomes that have been generated for organizations like Atomic and others coming through the program? Yeah, so I’d say that this primarily falls into four major categories for us. First and most importantly is, you know, we’re a product team by nature, right? So we actually sit at a really interesting intersection of kind of product, account and corporate development, if you will, within MasterCard, which is not just unique to MasterCard, but really to like the broader corporate innovation space. And our primary KPI is not just finding and bringing into the program what we believe to be best in class companies, but really signing tangible commercial deals with the startups that we elect to work with.

This isn’t meant to be innovation theater. This isn’t meant to be an accelerator program where we’re just giving them mentorship. This isn’t meant to just be a series of demo days and trying to get the company’s exposure.

It’s much more significant than that. And we’re judged on how many deals we’re able to sign with these companies and what the revenue we’re able to generate jointly off of these partnerships is. And so for the startup, for MasterCard, that’s obviously fantastic, right? Because we’re either building new things and bringing them to market or opening new markets through these partnerships.

We’re opening new ecosystems or customer sets through these partnerships. But then for the startups, there’s nothing at MasterCard that we do that’s not at scale. And so for a company like Atomic and many of Jordan’s peers that have come through the open banking track or one of our other seven programs is access to day one scale with any initiative that you’re able to sign and collaborate with us on.

So I think that’s bucket number one. Bucket number two is really then just access to our ecosystem, right? I think at the onset I had mentioned, we certainly expose all of our fintechs to these MasterCard preordained opportunities. But we are also very much open to and actively introducing them to our customers, which are largely retail banks, to merchants, to governments, to other potential stakeholders across the world.

So that if there’s another use case or another partnership deal that can be signed for the fintech, we can broker that on their behalf and just support both our customer and the fintech on that journey. So access to this broader ecosystem is something that we also support all these companies with. The third is potential investment.

And so we are an equity-free program by nature. We do not ask or take equity at the relationship. But we do have a fund that we own and operate as a team, which allows us, when it makes sense and is strategic, to not just sign these commercial deals, but also be additive to the relationship in an investment perspective.

And so sometimes we will be able to deploy capital in future raises that these fintechs go through following their first six months with us. And then lastly, we spend a lot of time getting to know these companies as if they were MasterCard properties. We really want to become an extension of their team.

We want to know as many people within the organization as we can and really help them solve what are their day two, day three, day four challenges that they might be facing. And so a lot of our founders, despite the technology that they’re building or the platform that they’re building, come to us with consistent challenges. Things like, I’m live in the United States today, but I really think the UK and Australia are my next two target markets.

I have no idea what the regulatory frameworks look like there for my proposition. Can somebody at MasterCard try to educate me to how to change what I’m doing to be relevant and successful in that market? Or I’m live in Brazil today, but I need to launch in Mexico and Peru. I need an anchor bank to launch with there in order to be successful.

Can MasterCard please introduce me to a bank as my day one customer in this new market and help me open it? So a series of challenges like that, beyond just the first six months to a year types of projects we’ll work on, thinking about the long term vision of the company is something we often meet these founders with. So I would say at the highest level, those four categories are what we do. Okay, great.

Well, if you’re interested in more information, you can head to MasterCard Start Path at startpath.com. And Jordan, where can people find out more about Atomic Financial? Yep, atomic.financial. There you go. That’s really easy. So Sabrina, if I was to ask you in five years time, when you look back on Start Path, what do you hope the outcome has been for MasterCard and for the industry in general? Well, Chloe, my AI assistant will be running the whole program.

But no, I hope we’re working with hundreds more companies. We continue to solve some of the biggest challenges that our industry faces from security to AI to cross border payments and so much more. I hope we see that the founders that we’ve invested, you know, 5, 6, 7 now up to 10 years with have gone on and scaled tremendously as we expected them to go on to raise the capital.

May they all be unicorns, right? May they all be unicorns. That they’ve been successful and MasterCard served as a catalyst and contributed in part to that success. And then, you know, I hope that we continue to see just increased diversity in the space.

So, you know, more underrepresented founders, more female founders, more capital going to diverse sets of companies and founders. So it’s another big thing we didn’t really talk much about today. But I hope leadership teams, I hope investment deployment, and just the general diversification of athletic classes is a little bit more equitable in five years.

Right. And Jordan, tell us, have you got anything big coming up for Atomic that you want people to know about? I think our subscription management technology is going to be first of its kind in a lot of ways. I mean, there’s obviously been the rocket mortgage true bills of the world for a little while, but I’ve not been more excited about anything since starting this company that I’m about.

Some of the subscription management stuff we’re going to roll out. And the main reason is because all of us want this to exist. We want to be able to be in our bank and see something that’s, and we want our bank to pull all of our subscriptions together and say, here are all your subscriptions.

And then you want to be able to, I just want to cancel that. I want to pause that for a little bit. I want to do these sorts of things.

It needs to exist inside your banking app. And the amazing thing about what we’re building right now is everyone in our company wants it to get live because we all want to use it. Yeah.

Yeah. Yeah. That’s I, I, I remember those days and moving too.

So, all right. So check it out. Startpath.com if you want to hear more about, or you want to look at MasterCard’s Startpath program.

It’s celebrating 10 years since its inception. So it’s been a very effective program. We heard the numbers earlier, 430 fintechs in 57 countries that have raised, what is it? 29 billion, I think, after the inception of the program.

So it’s been successful. And if you want to check out the work that Jordan and the team are doing over at Atomic, go to atomic.financial. That’s it for another week of the world’s number one fintech podcast and radio show, Breaking Banks. This episode was produced by our US-based production team, including producer Lisbeth Severance, audio engineer Kevin Hirsham, with social media support from Carlo Navarra and Sylvie Johnson.

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