Episode 157: Is Synapse bankruptcy going to destroy the BaaS model?

The Banker Next Door

This episode examines the bankruptcy filing of Synapse and the ensuing disruption it has caused to its partner financial institutions. Currently, $85 million in customer money for over 100,000 customers is missing. The bankruptcy court judge is not sure what the court can do as this is “uncharted territory.” Synapse has laid off all its employees and pointed responsibility back to its financial partners. However, the financial institutions don’t have the customers’ funds and are claiming that Synapse misappropriated them. Perhaps more importantly, regulators are taking a hard look at third-party vendor relationships and the BaaS model.