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Decoding Embedded FinTech: A Conversation with Sankaet Pathak, Synapse’s CEO | by Josh Benadiva | Wharton FinTech | May, 2023

In the dynamic world of FinTech, Synapse is making a significant mark. In today’s episode of the Wharton FinTech podcast, Joshua Benadiva had the opportunity to sit down with Sankaet Pathak, CEO and Founder of Synapse. In our conversation, we delved into the world of Banking-as-a-Service (BaaS), the journey of Synapse, and the future of embedded FinTech.

>>> Listen on Spotify | Soundcloud | Apple Podcasts

Sankaet’s journey to the helm of Synapse is fascinating. His initial foray into the world of FinTech, which culminated in the founding of Synapse, was fueled by both passion and frustration.

“I was at a hackathon when I remembered my own struggles with banking when I first came to America. I couldn’t open a bank account without my university’s help. Then at this hackathon, I downloaded an app called ‘Simple’, a neobank of its time. My friend could open a bank account in less than 60 seconds, while I was denied. This experience fueled a burning obsession within me. By the end of the hackathon, I decided I would build a competitor to ‘Simple’, but it would be different — it would be for everyone. It wouldn’t matter whether you were rich or poor, or an immigrant, it would just work.”

Finding the banking system, especially in the US, inflexible and insufficiently accommodating, this frustration served as a launchpad for the establishment of Synapse.

“We didn’t get into this business because we read a McKinsey report that banking as a service was going to be massive,” Sankaet said, emphasizing the problem-solving approach at the heart of Synapse. “We got into it because we wanted to build products that we thought should exist in the world.”

Sankaet provided a candid look into the evolution from a talented engineer to a company leader:

“I was not good at building companies, managing people, delegating, and many other things. Over the course of the last six or seven years, I’ve learned a lot through trial and error… But what I’ve found about great CEOs, which by no means I am, is that they are very self-aware of what they’re really good at and what they need to supplement themselves with. That’s actually true for all great leaders, not just CEOs.”

Despite the challenges brought about by the COVID-19 pandemic, Synapse made significant strides, obtaining its own broker-dealer license and lending licenses across nearly all states in the US.

In the rapidly evolving FinTech industry, Synapse is forging its own path. When asked about competition, Sankaet explained his unique focus: “We’re obsessed with the problem. Initially, the problem was ‘how can we give people in the US a bank account?’ Now, the problem is ‘how do we give people access to a USD account, regardless of where they live?’”

His philosophy makes clear that Synapse’s approach to competition is entirely product and customer-focused, not driven by the market’s movements.

“We didn’t get into this business because we thought, yeah, we’d own a piece of it, we would be rich,” he explained. “We’re really focused on delivering what we want to deliver, and our customers want to use. The larger themes are making financial services easily accessible for folks that live in the US and beyond.”

Sankaet has a vivid vision for the future of embedded FinTech. The aim is to reach a “drag and drop” model of embedded finance where even non-specialist companies could incorporate financial services seamlessly, with minimal need for technical or regulatory expertise.

“We’re still not where I had expected and hoped we would go to,” Sankaet said, indicating that the industry is still in its early adoption stage. “But we’re still, ironically, with the early adopters. Like everyone’s still an early adopter in the market because they are sophisticated FinTech companies that want to be able to launch a FinTech product and build a lot around it.”

As our conversation came to a close, I asked Sankaet for his top book recommendations. Among others, he recommended The Power of Myth, which he said helped him understand how to tell a compelling story.

It’s conversations like these that continue to push the boundaries of what’s possible in the FinTech space. Sankaet’s vision, grounded in solving real problems, is a testament to how innovative thinking can reshape financial services, making them more accessible and user-friendly.

If you’re keen to learn more about the journey of Synapse, the challenges of embedded finance, and the future of the FinTech industry, tune into the Wharton FinTech podcast and stay tuned for more thought-provoking conversations with leaders at the forefront of FinTech.

Check out the Episode on the platform of your choice here: Spotify | Soundcloud | Apple Podcasts

About Synapse

Synapse, a comprehensive banking-as-a-service platform, offers a range of services such as payment, card issuance, deposit, lending, compliance, credit, and investment products in the form of APIs to over 15 million end users. Boasting an annualized transaction volume of $67 billion and $11 billion in assets under management across its platform, Synapse has garnered over $50 million in funding from renowned venture firms like Andreessen Horowitz, 500 Startups, and Trinity Ventures.

About Sankaet Pathak

Sankaet Pathak is the founder and CEO of Synapse. His journey with Synapse began in 2014 during his Master’s degree at the University of Memphis and has since blossomed into a remarkable success story.

About the Author

Joshua Benadiva is a first-year MBA Candidate at The Wharton School and Master’s in Computer and Information Technology Candidate at Penn Engineering. He is co-lead of the Wharton FinTech Podcast team and has a passion for building fintech products, solving critical financial problems, and exploring niche financial software.

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