Hosts: Brett King, Jason Henrichs, and JP Nicols

How Strategic Partnerships Are Rewriting the Rules of Banking

HOST (Brett King):
The financial services industry is undergoing one of its most rapid transformations, and it is increasingly powered by collaboration. Traditional institutions are recognizing that the future of banking lies not in isolation, but in the synergy between fintech innovation and legacy expertise. Partnerships are no longer optional, they are strategic imperatives for survival.

HOST (Jason Henrichs):
Partnerships today reflect a shift from transactional collaboration to deep ecosystem alignment. Banks are no longer simply integrating fintech tools; they are co-creating new value propositions that align with customer expectations for seamless, intelligent, and inclusive experiences.

Key Context:

• The rise of embedded finance and Banking-as-a-Service (BaaS) is pushing institutions toward modular, interoperable ecosystems.
  
• Customer trust remains a central pillar, but innovation speed and transparency now drive loyalty more than branch presence.
  
• Regulatory frameworks are evolving to support secure data exchange, open APIs, and cross-industry interoperability.
  

QUOTE:

“The best partnerships are those where banks and fintechs stop competing for the customer and start competing for relevance.” — Brett King

What Defines Successful Fintech Collaboration?

HOST (JP Nicols):
True partnership requires a cultural shift within institutions. The banks that succeed are those that view collaboration not as outsourcing but as shared innovation.

HOST (Jason Henrichs):
A recurring challenge lies in aligning risk appetite, compliance expectations, and product development timelines. Traditional banks are conditioned to minimize risk, while fintechs thrive on iteration and speed.

Core Dimensions of Successful Collaboration:

• Shared Vision: Both parties must define a unified customer outcome.
  
• Agile Governance: Decision-making must move beyond committee-based stagnation toward fast, empowered experimentation.
  
• Transparent Data Exchange: Real-time analytics, shared dashboards, and responsible AI enhance joint performance visibility.
  

QUOTE:

“You can’t partner successfully with someone if you’re still trying to prove you don’t need them.” — Jason Henrichs

Why Partnerships Are Now a Competitive Advantage

HOST (Brett King):
The competitive edge no longer comes from proprietary infrastructure. Instead, it’s built on access, access to data, innovation, and diverse customer bases.

Fintechs offer agility and customer-centric design, while traditional banks contribute regulatory resilience, trust capital, and balance sheet strength. The fusion of these elements allows institutions to address unmet needs across lending, digital identity, payments, and financial wellness.

HOST (JP Nicols):
We are entering an era where the best banking experiences will emerge from multi-party ecosystems, not single providers. This collaborative model drives scale, lowers costs, and creates more adaptive financial systems.

QUOTE:

“In the next decade, the institutions that thrive will be those that partner well, not those that build everything themselves.” — JP Nicols

The Risks and Realities of Open Collaboration

While partnerships promise innovation, they also introduce complexity.

• Data security and compliance overlap remain ongoing concerns, particularly as real-time payments and open banking expand globally.
  
• Cultural misalignment can undermine even the most promising integrations if leadership fails to invest in mutual understanding.
  
• Sustainability of partnerships depends on a clear path to value creation for both parties, beyond early-stage enthusiasm.
  

Regulators, too, play a defining role. By fostering standards that balance innovation and consumer protection, they set the stage for scalable collaboration.

The Future of Fintech and Banking: Building Trust Through Transparency

HOST (Brett King):
The future of financial services will be defined by how effectively organizations can build and sustain trust in an increasingly digital environment.

Trust will be earned not only through compliance but through consistent, data-driven transparency. As AI and machine learning redefine risk assessment and customer engagement, fintech partnerships will become the backbone of this transformation, accelerating inclusion, expanding access, and democratizing wealth creation.

QUOTE:

“We’re not just building better technology; we’re redefining what trust looks like in a digital-first economy.” — Brett King

Raw Transcript:

We are such a developed nation that we have a lot of habits around things that work well enough. At what point does it mean that the U.S. has just missed the boat and is so far behind in this story? The U.S. could no longer claim to be the most advanced banking system in the world. Welcome to the first Breaking Banks of 2026.

And, you know, as we enter, you know, an interesting era, a lot is changing and yet everything is the same. When I first met Brett, and I still remember ordering my copy of Banking 2.0, I was co-founding Perk Street. We were an online-only institution at a time where that was exceedingly novel.

Forget about a mobile first, like what Brett was building with MoveIn, but at the time, it was almost sacrilege to be talking about this idea of digital only. And you entered an era, and I think, Brett, you know, Breaking Banks was an era of digitization was almost heretical in discussion as you were really pioneering a big piece of this in Asia. And I’d love to, like, kick off, if you go in your Wayback Machine, you know, to the beginning of this and when we’re kicking off the digital transformation, you know, first the slog and then the glory days to set us up to where we think we are now at JPA.

I’d love to hear your opinion on, but Brett, take us in the Wayback Machine of the digital transformation revolution. Well, I mean, you know, I had that epiphany, you know, back during the dot-com days that, you know, because in 2005, I was commissioned by HSBC to do this report on what HSBC would look like in 2020. And that report, which was called HSBC 2.0, became essentially the first piece of, you know, collateral that ended up in the book in Bank 2.0. But that was 2005.

So, you know, way earlier before we met Jason. But, you know, Paul Thurston, who was the head of, the CEO, not CEO, head of retail, rather, for HSBC out in Asia at the time, he commissioned me to do this thing, got right behind the report. And he, Peter Brooks, and I ended up going to Canary Wharf and presenting to the board.

And they just didn’t get it. And for me, that was the epiphany, right? Because, you know, we had in that, and that was my first sort of super forecasting professional piece of work, but it was still pretty accurate. 2008, we forecasted that, where, you know, internet-based banking would overtake, transactionally at least, overtake the branch.

And then by 2015, mobile would overtake both the branch and the internet. And the board of HSBC thought that was a ridiculous concept, you know, when we presented that in 2005 and early 2006. So, for me, that was the epiphany.

That was the epiphany that banks were not ready. Even some of the best banks in the world, they had a blind spot when it came to digital, because they thought their traditional model could just overcome. And their argument for that was, everyone told us branches were going to disappear when the internet banking came along, like egg and so forth.

And so, therefore, it hasn’t. So, therefore, it never will. But today, when we, you know, look at those numbers, you know, the 4 billion customers of the top 20 retail fintechs versus 2.7 billion customers for top 20 retail banks, you know, we can see the effect that digital has had.

But then, after I wrote the book, taking the lessons from that, and the reason I did that, Jason, was I realized that, you know, for the three of us, of course, we’ve always been on this digital transformation journey. But I realized that people like us didn’t have a voice. They didn’t have someone that they could stand by and say, well, don’t believe what I’m saying about this to the CEO.

You know, read what this guy says. He’s the expert on this. And that’s the positioning that I took.

And then when I launched the book, which was April 2010, I ended up launching at the Asian Banker Summit in Singapore, first of all. We had a staggered then we launched in London and New York. And in New York, I visited with our good friends, Josh and Shamir at Simple.

And it wasn’t long after that, that you and I met, Jason. But I visited with Josh and Shamir, and they told me about what was happening at Simple. They really loved Bank 2. That’s why they wanted to meet.

In fact, they came to my New York book launch. And they asked me whether I wanted to be involved in that. But I’d already had this idea to do a mobile-only approach to that.

So that’s… And it was actually after I met them in New York, I sort of really was, okay, this is the direction I have to go. These guys are onto something, but I think the mobile direction is going to be differentiated. So August the 8th of 2010, when I was in Los Angeles doing a book launch for Bank 2.0, that was when I ended up after the book launch registering the domain Move & Bank.

So that became part of history. And then we met sometime after that, right, Jason? About 2009, now 2010. Oh, 2009 then.

It was 2010. It was about the same time. Yeah, it’s about the same time.

I think we predated Simple and Bank Simple, as it was noted in those days. Absolutely did, right. And I’m curious.

So if we play this out, I would say the majority of institutions across the globe no longer will argue digital is not important, right? It is no longer heresy to say that. But JP, I’m curious from your perspective and the amount of work we do at Alloy Labs with primarily community banks in the U.S., but banks of all sizes, and we still do some international have we actually gotten that figured out? Like, are we done with digital? I think that’s the key question I hear. It was like, are we done with digital? Like, is that done? No, no.

The challenge is they are so tied up with their legacy and their history. There’s a bank that you know, that we worked with recently, talked to one of their leaders on the lending side about some different technologies that might help them provide more value to their customers. And the response was, well, we have a really high bar for that.

We’re going to need to see a six-figure return. I’d rather spend six figures on hiring another relationship manager, another human. And so what still happens is that anything new has to clear a much higher bar than anything that we used to do.

In fact, anything that we used to do doesn’t really have to clear a bar at all. It’s just baked in. So we start with a budget that’s here’s all the things that we’ve done for 150 years.

Do we have room to do anything else? And that’s really the limiting factor. I think that’s one of the reasons you see these digital players, you know, separating so much in terms of performance now from traditionals, like say NewBank and WeBank and even Chime in the US, you know, Chime has more customers than US Bank now, you know. So why is that? Is that they don’t have to make sacrifices on the legacy side.

They don’t have that internal debate going on about which should go to legacy channels versus which should go into digital. It all goes in digital. And in terms of, you know, like we look at NewBank as an example, NewBank has the lowest, you know, operational cost rating of any bank in the world, WeBank similar, you know, and that’s cost to income ratio.

And so that is indicative of the fact that a digital pure play now is much more operationally efficient and their low cost of acquisition is a part of the scaling laws we talk about. So that’s why they’re taking market share, right? Well, let’s talk about that for a second. Let’s do a pivot for a second.

Let’s talk about NewBank and Bonk and others. Why do, you know, neobanks that have done exceedingly well outside of the US feel compelled to come here? Well, it’s a huge market. And right now we do have Chime, but because of the lack of fintech charter infrastructure, because, you know, the US is only the only G20 nation that doesn’t have a fintech charter.

And so because of that, there’s still, I think, a perception that the market is wide open for a fintech to come in and take that sort of neobanking moniker despite the success so far in, you know, Chime and others have had. There’s still, you know, there’s still many, many customers that eventually will go to digital once that proposition comes. I think that’s the logic, right? I think it’s the logic, but I’ll be honest, I don’t buy it.

Maybe I’m biased by, you know, if you go back in our own way back machine, the episode with the president of America’s for N26 is like digital is no longer a problem in the US, not just because we have Chime and Mercury and BlueVine and, you know, Current and these others, but even our biggest banks have figured out digital pretty well. And a number of community banks have done it well. JP, do you see an unmet need here that we need another challenger bank here? No, and we are such a developed nation that we have a lot of habits around things that work well enough, right? We still have not very many, but still a significant number of people that write checks, write paper checks for things.

That plastic artifact that you’ve been claiming the death of for the longest time, Brett, the credit card, right? It still works. I mean, are you proud of the fact that 80 percent of checks are written in the United States? I didn’t get that. It’s something of pride, but it is awfully difficult to displace.

Right. Yeah, it’s not about pride. It’s about the reality that for many people it doesn’t feel broken.

And so certainly as the older generations die off and the younger generations get more active in the financial life, that trend will continue to accelerate. But these are for many people in the U.S., these are marginal gains. And in fact, for a good chunk of people, we’re not even sure we see the gain, right? Like, I don’t understand what I do right now works just fine.

But I mean, this is probably a very important question, and we have been skirting around this for many years, is at what point does the U.S. banking market become an anachronism? Because it’s so far behind the rest of the world because of these entrenched legacy things. I mean, part of the reason China has been so successful with mobile payments, part of the reason that UPI in India and PIX in Brazil have had such an incredible take-up is because they didn’t have that legacy infrastructure that they had to displace. It was just cash, right? And so, you know, we can understand why that happens.

But now you have Brazil and China, which up until very recently the U.S. would have considered developing nations, have far more advanced peer-to-peer capabilities than the United States. Brazil and China are 10 years ahead of the U.S. on real-time payments. They have 100% adoption across the board.

We’re talking trillions of transactions annually. And, you know, compared with what we have in the U.S. on FedNow, it’s fractional. So, you know, and then the plastic thing, J.P., you know, all of the fastest-growing activity on payments is moving to mobile.

And the gen-tech’s only going to accelerate that. So at what point does it mean that the U.S. has just missed the boat and is so far behind in this story? The U.S. could no longer claim to be the most advanced banking system in the world with those legacy constraints. Certainly.

Did we ever claim that? Yeah, I don’t know. Maybe on the back office and a number of things from trading market structure and other, but I think certainly, I think the bigger problem, Brett, is we’ve had a boat. Like, our boat was too sufficient for too long, but we’re still paddling a canoe and everyone else has discovered, like, the speedboat.

And we’re still paddling. Yeah. But we’ll get there eventually.

The paddle works, right? Yeah. Well, you’re the futurist, Brett. So I don’t know, you asked the question when, at what point, I don’t know.

But eventually, I certainly don’t argue with you on the trend line. What I worry about the most is the value of the U.S. dollar and the safety and integrity of the U.S. financial system, not the tools or the mechanisms of moving money. Those are, I think, the biggest risks to the U.S. losing its place.

That’s an economic question rather than a, you know, maybe monetary policy, particularly. I was going to say it’s a policy. What’s happening at the moment? Yeah.

Question. But it is, to some extent, I mean, there must be a point from a technology infrastructure perspective when everyone says, well, hang on, we don’t want to put our dollars in the U.S. because the system is so old and broken, comparative to what’s happening in the rest of the world. That’s a very real risk that the technology, lack of technology infrastructure may be an impediment to the successful operation of the U.S. dollar in the economy.

I don’t know. Yeah, I think first and foremost is, is my money safe and secure? If that question is answered, then the next question is, can I deliver it to counterparties as quickly and cheaply and efficiently as possible? So far, we’re still hanging on on point one and point two is where we’re seeing the erosion. But I mean, is point one a big differentiator? Like, you know, when was, you know, like we do have bank failures, notably SVB, you know, Silicon Valley and so forth.

You know, we’ve had bank failures here. But, you know, I mean, not an extraordinary amount comparative to other markets. But China and, you know, the European markets haven’t had likewise either, you know, big failures.

So the security perspective is not such a big differentiator. Yeah, it’s less differentiator and more just inertia, right? That it’s been the default currency and the default system. So let’s talk about default and what incumbents need to be doing and the new entrants need to be doing.

Right. So if we’re agreeing, the world is in flux. And I think we have some differences of opinion about what happens in the U.S. But I think if we say at a global level, things are changing and relatively rapidly.

And digital transformation is no longer a nice to have or something that is open for debate, where does it fit? And, you know, let’s take different perspectives along that of where does digital fit against the institution and what is the mandate? And I think a big piece of this that we have to put in that are new as it relates to digital is AI and stablecoin. Yeah. Well, you know, let me jump in on that one, because, you know, we saw 43 trillion or 45 trillion dollars of stablecoin activity in 2025.

Now, granted, a lot of that is stablecoins being used to purchase altcoins. So it’s not all just transactional activity. But the growth in use of stablecoins is very clear.

And it’s going to shift to bigger sort of smart contract stuff. And that’s sort of happening quickly. We see JPMC, particularly on deposit tokens.

We see a number of banks getting into that big time. But we are going to obviously see a lot more experimentation on the agentic AI side with smart contracts that are built on top of stablecoins. And that, you know, that will lessen a little bit the U.S. dollar stuff.

If the geopolitical situation continues to provide uncertainty in the way that it is currently, and, you know, that’s a big question, then you will see, you know, BRICS nations and others looking at, you know, a basket of currencies to hedge the risk of, you know, U.S. dollar challenges. And then, you know, of course, you have in, you know, the next decade, real questions about U.S. debt and how that’s going to affect the dollar on a long-term basis. So there are potential issues that could provide stablecoins and, you know, these sort of digital currencies, some mechanisms for really taking a out of, you know, global U.S. dollar trade.

And China would love to see that, I’m sure, for example. So, you know, there are some potential elements there. Oh, for sure.

To me, and I’m not a whole crypto bro, so I’m probably not the right person to think about this, but on the other hand, maybe I am, because what we’re talking about is stable global systems. And to me, the thing most surprising is how long it took us to get to the stablecoins, right? We spent so many years of chasing highly fluctuating cryptocurrency prices, and it was shocking that we didn’t circle to this early. We had to go through NFTs and a bunch of silly things before we kind of realized, you know what would be helpful? If this digital currency actually had a stable value so that it had more utility.

So I think we’re still shaking out a lot of the speculators and a lot. I mean, we’re Las Vegas in the 1960s. The corporations haven’t quite fully taken everything over yet.

We can argue about whether that made it a better or worse place. That was a core problem with Bitcoin as a design premise, in my view, and a lot of crypto bros will argue against this. But my argument is that because of the limited supply, the 21 million bitcoins, that that created an appetite for speculation, right? And I remember we had John Matonis on the show back in 2013, and he was the head of the Bitcoin Association at the time.

And he’s like, no, you just move it to the other side of the decimal place, and people will get that. They didn’t. They didn’t, right? So that speculation and the hope that your altcoin would become worth a million dollars one day, and you’d become a billionaire or something like that, became a sort of a core element of crypto from a cultural perspective.

Even the hodl that you mentioned, JP, that goes down in history as what are you hodling for? You’re hodling for Bitcoin to hit a million dollars, right? So you’re not going to spend digital currency if you are speculating on it that it might be worth a lot more money in the future. And that’s the core problem with cryptocurrencies versus stablecoins, is you’re not going to use them to spend on stuff. So we needed stablecoins.

But what’s happening now is that the DeFi world of stablecoins is becoming traditional finance, right? And so it’s like, well, we kicked the tires, we tried it out in the DeFi world, and we knocked the rough corners off, and now we’re institutionalizing the stuff that works. That’s my perception. Mm-hmm.

I agree in general. Yeah. But Jason, what do you think? I mean, play it out with the agentic AI stuff and the stablecoin tokenization that we’re already seeing.

Do you think that’s going to have impact? I mean, are you guys starting to think about smart contract and stablecoin implementation at L.A. Labs, for example? I mean, we are definitely paying attention in looking. I personally am more excited about smart contracts than stablecoins just broadly. Right.

So we’ve been told from a number of banks, cross-border is the use case they see, except for years they’ve been telling us, all my years involved with currency, I was like, oh, we don’t do much in cross-border. That’s a solved problem for many, and we’re not seeing the relevance. Now, I think the danger is you can’t just not pay attention to it.

It’s just the immediacy of what you can do about it. I think broadly, this is where incumbents, not just community banks, struggle, is if it is not an immediate threat or opportunity, they don’t spend enough time on the exploration, monitoring, pondering, and experimentation until it’s too late. And then they wonder why they’re behind.

And so that is something we’re trying to solve as a group, is what is the appropriate level in modulation versus some of the hysteria that has gotten people verbally very excited and paying attention to it, but in the background, they’re not doing enough to lay some of the foundational things. I think about the beauty of Stablecoin is it may pressure some who really have not invested enough in digital infrastructure to make some infrastructure investments. They’ve been doing the customer-facing digital investments, but not the infrastructure investments.

And I hope Stablecoin can pressure that. Well, I mean, this is where a gentic AI is going to become a key factor in sort of pushing this over the line, because I just don’t believe, and there are some solutions to this right now, but in terms of deploying a gentic payments and a gentic-based smart contracts rapidly, Stablecoins are the easiest approach to this, because all of the smart contracting infrastructure that’s being built today is being built on Stablecoins. So you could replicate that using US dollars, for example, but you’re not going to have that ability to sort of section off smart contracts and protect it from issues when you’re directly coming in and out of the core.

So I think Stablecoins are built for a gentic operations in banking and finance. And I think the more we get into autonomous banking and finance, the more that we’re going to see Stablecoins and digital money become much more reliable. One of the really interesting proposals that’s been put forward by USDT recently and others is that instead of chargebacks that we have when fraud occurs, because of the scale and the speed that a gentic capability is going to give us, we may need to have a rollback capability for digital currency.

So there is already some very different thinking about how transactionally autonomous finance might develop. And my view is that the more we get into this and the more problems we see with a gentic in the implementation, the less likely it is that a gentic AI-based finance is going to look like traditional finance with AI, and it’s going to look like something different. And I think that’s one of the biggest challenges, Brett, is a lot of the gentic solutions we’re seeing are applications of things we understand today and not reimagining what that solution could look like from a completely different context.

And I’d say the former are very interesting and won’t get adoption. The struggle is how do you get to the reimagination phase without experimenting? Well, you have to experiment. Yeah.

And you have to prototype. And that’s something that, again, this is why DeFi has led the world on stable coins and smart contracts rather than traditional finances. We’re not really comfortable with prototyping in the environment because of exactly what JP said before.

It has to work, and it has to work every time flawlessly, right? Yeah. But the whole crypto world is not free of problems. We’ve had big exchange breaches.

We’ve had fraud. And this is an argument, I guess, where we have to start thinking about you need to regulate this environment to bring in the protections that we have in the traditional industry. And this is why DeFi and Tradfire are merging together.

But it is going to be different. The future is not going to look the way it has in the past. Well, speaking of the future, as we think about the content we’ll be producing in 2026, the exploration of this, I think, is keen for all of us.

JP, what else are you thinking about for 2026 that you’re going to be working on around themes? Well, I think you said one of the words, experimentation. We have to set aside some small amount of our time. I’ve been thinking lately about 5%.

That’s two hours. It’s a Friday afternoon. Cancel all those meetings that everyone said could have been an email and spend a couple of hours every week trying something, talking to customers, building a prototype, figuring out what others are doing and figure out what the future does look like.

Because I’m still seeing too many blinders on, too many blinders on, well, we’re a bank and we’re regulatory protected and we’re always going to have banks. But I think it was in 1996, Bill Gates said, well, we’ll always need banking. We don’t necessarily need banks.

And we look at the consolidation that’s happened, the threat that’s been happening to the margins and so on. Banks have to figure out. I believe there is absolutely a place for banks, including community banks, in the future.

But to your earlier point, it’s not just about slightly iterating on all the things we’ve always done. We have to re-imagine what that future looks like. Maybe I could reframe Bill Gates’ quote for this era, is that we need banks less and less in the future.

We just need more financial services, technology, infrastructure in the future. And I think that’s the difference. And that’s why, to your point, Jason, is that, you know, like when we were talking about this back in 2010, and if you had that blind spot and you’ve still got that blind spot today, that’s a pretty good indication, based on historical development of this, that if you’re not tech first or digital first, at some point, it’s just not going to work.

Yeah. Well, money movement has become so much more critical. It used to be, literally, you wrote checks.

That was it. Then we added things like wire transfer and ACH, and then credit cards and debit cards. That’s just exploded now, the ability to move money from one place to another.

And for decades, that wasn’t important. It was important to have a safe balance sheet to store the money, but being able to move the money, and that’s easily disrupted from outside the traditional industry, which we are continuing to see every day. Well, I think we’re going to have some interesting things ahead as we’re producing content.

That rewriting of the rules is the key theme for me, you know, coming up. Rewriting how, what do we think about stable coins? How do we think about rails, as you said, JP? How do we think about charters? A little more US-based than some of our episodes, but I think we’re entering an interesting time with different pressures in a way that we haven’t really seen before. Just like the level of intensity that we expected to, I would say, alleviate post-COVID, they’re not alleviating.

We’re seeing those pressures built and coming from new directions in a way that I think is ultimately, hopefully, good for the ecosystem. Well, and for me, the through line is human beings make decisions, and boards and senior leadership teams have to make decisions that prioritize the future, not just protect the past. Yeah.

Well, if you’re listening and you have some ideas of the content or speakers you want to hear, drop us a line, LinkedIn, X, you won’t find me on X anymore, but someone I’m sure does it, Threads, Instagram, you name it, but get us your thoughts on what are you interested in hearing more of, but we’re interested in exploring the future together. Next time on Breaking Banks, we’ll have another episode, but this time, deeper in on one of these hot topics.