271–280 of 299 posts
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Looks interesting! Do you plan to create an SDK? Or is interfacing with the HTTP API will be the best way to use the app for now?
Engineer at Column here - we have definitely considered creating SDK's but most of our customers prefer the HTTP API's, which will likely remain the best way to use Column for a while.
Congratulations on the launch! I wonder if this kind of business model, where it looks like there is basically "one really rich guy self-funding" for a couple of years, is going to be more common. That is, just looking at the site, my guess is that building everything from the ground up (core banking stack, acquiring the chartered bank, then all the APIs and tech on top of that) must have taken many years and many, m…
acquiring the chartered bank They seem to have bought Northern California National Bank in Chico, CA.[1] The Column web site doesn't mention it, but they still have a physical branch in Chico. The FDIC gives their web site as "norcalbank.com", although it does show the name change to Column. Their site has no street address and "domain name only" TLS certificate from Amazon, so you don't really know for sure that col…
Ironically, one that will probably not be willing to take the compliance risks of working with all the developers who are doing crypto operations, given how much they have to lose after investing in this bank and messing up AML.
They could carve a lucrative niche for themselves though, this looks slightly more competitive than the state-sponsored crypto banks in Wyoming for the customer. Unless something goes wrong.
I think you guys built the right thing.
Wish you all the best in the endeavor!
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acquiring the chartered bank They seem to have bought Northern California National Bank in Chico, CA.[1] The Column web site doesn't mention it, but they still have a physical branch in Chico. The FDIC gives their web site as "norcalbank.com", although it does show the name change to Column. Their site has no street address and "domain name only" TLS certificate from Amazon, so you don't really know for sure that col…
Banking is highly regulated at both the state and federal levels, it astounds me that they're able to have such a blatantly consumer hostile clause in their terms. Either this is plainly unenforceable (which happens and companies do all the time), or it is illegal and will get them a fat fine (seems unlikely though), or we live in a dystopian-Randian hellscape (most likely).
Getting a new bank charter since the financial crisis of 2008-2009 has been virtually impossible. The number of banks in the US in the past decade or so has come down from ~6K to ~4K. New licenses for banks (State or Federal ) since 2008 have been negligible. So, let's buy a "small" bank. So far so good
Next part is core banking software as well as Money movement software. This is where is gets interesting.
Smaller banks use Fiserv/FIS/Jack Henry (and a long tail of other core banking providers) and larger ones have a mix of systems with legacy cores e.g. DXC, Misys and bunch of others. While it's tempting to build an entire banking stack from ground up it may not pass regulatory and compliance muster for a while. Plus even some the legacy cores have now built a rich RESTful API. Would be interesting to know how much of the core was built in house over the past 3 years
Next part is Money Movement. This is where ACH, Push to Card, Fedwire and RTP come in
ACH isn't that bad. Most banks use ACH "aggregators" which in turn connect to one of the two ACH Operators. Once a bank has a business relationship with the Fed it's not tough to connect to these aggregators and simply sftp files to/from them
Push to Card is available through VISA Direct and MC Send. Given their financial resources and fintech background it wouldn't be difficult to get a connection going there
RTP would be an interesting one but a relatively easy one since the Clearing House is already used to working with multiple banks and have "plug-ins"
So, now it all boils down to the business procedures and KYC/KYB on Fintechs that want to use Column's services. This can be done very efficiently online
The T&Cs are heavily skewed in favor of column. Some of them may be unenforceable. But those can be negotiated
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Not quite. BaaS just provides the banking rails. The ability the send, receive and store money. But it’s up to their customers to build actual products on top of it. Such as bank accounts, loans etc. Otherwise all you really have is a REST API that happens to be able to move money. But good luck getting your average consumer to pay for that.
And who's owning the banking license in that case? Because to me that sounds a lot like, well, banking. And wasn't aware that the ability to move money from one account to another is actually a big issue. And if it's just the software banks use, well, they already use it, don't they?
The companies building on top of a BaaS are not banks. They’re fintechs building products like privacy.com, or something else.
Moving money between accounts at the same bank is obviously trivial. I’m talking about the ability to move money to other financial institutions via card payments, wire transfers or whatever.
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Not quite. BaaS just provides the banking rails. The ability the send, receive and store money. But it’s up to their customers to build actual products on top of it. Such as bank accounts, loans etc. Otherwise all you really have is a REST API that happens to be able to move money. But good luck getting your average consumer to pay for that.
And who's owning the banking license in that case? Because to me that sounds a lot like, well, banking. And wasn't aware that the ability to move money from one account to another is actually a big issue. And if it's just the software banks use, well, they already use it, don't they?
There are a bunch of banking-as-a-service middleware providers like Galileo, Treasury Prime, Unit, Synapse etc. who provide nice, easy-to-use APIs for things like opening a bank account, sending an ACH, provisioning a debit card, etc. Doing these things "on your own" can be incredibly difficult, e.g. the NACHA rules around sending and receiving ACH files are incredibly complex. These companies do NOT own a bank charter. Instead, these companies partner with lots of different banks that DO have a bank charter and integrate with their "core banking" systems (core banking systems usually run on mainframes and are provided by companies like Fiserv). Then, fintechs like Chime you want to provide banking services to their clients can focus on the "user facing" part of the experience and less on the difficult, nitty-gritty parts of the banking stack.
What Column has done is consolidate the roles of the middleware provided, core banking system and chartered bank into a single company so there are fewer middlemen to take a cut.