How the Three Layers Work
Banking as a Service has been a buzzword for a few years now, but the mechanics of how it actually works are often misunderstood. People use "BaaS" and "embedded banking" interchangeably. They are not the same thing, and the distinction matters.
What Instant Settlement Means for Community Banks
FedNow went live on July 20 with 35 certified institutions. After decades of batch-processed payments, the Federal Reserve now has its own instant payment rail. I've been waiting on something like this for a while, and I'm already turning over what it means for community banks.
A First Look at Identity in Banking
I've been turning over how many banking processes start the same way. Someone needs to prove they are who they say they are. Account opening, wire transfers, loan applications, address changes. Every single one begins with identity.
Reassessing AI for Banking
GPT-4 was released in March 2023, and I've had time since then to spend with it on personal projects, comparing it against 3.5. The difference is not subtle.
The Other Side of the Bank Run
I've been thinking about the SVB collapse from the startup side. The banking analysis has been thorough. Duration mismatch, concentrated deposits, digital bank run. But there's another story that hits closer to home. The story of the founders who spent that weekend not knowing if they could pay their teams.
Capital Isn't Cash
A month out from the SVB collapse, the immediate panic has subsided but the lessons haven't. The biggest one for me is a distinction that sounds simple but changes how I think about risk. SVB was well-capitalized. It ran out of cash. Those are two very different problems.
Watching Rate Risk Play Out in Real Time
Silicon Valley Bank failed on Friday in roughly 48 hours. Watching this play out from the inside of the banking industry, what stood out was the speed and how cleanly the mechanics matched what the risk frameworks have always warned about.
Duration, Repricing, and the Mismatch
Watching what rising rates have done to bank securities portfolios over the past year got me looking into the broader question. Unrealized losses on bonds are one thing. The bigger question is how rate movements affect an entire balance sheet, not just the securities line. That's what interest rate risk actually is, and I've been spending time trying to understand the framework bankers use to manage it.
Thinking Through the Use Cases
I've spent the last two months on personal time exploring ChatGPT, digging into how large language models work, and running it through every banking scenario I can think of. The wonder phase is fading. What's replacing it is a more practical question. Where could this eventually help at a community bank, and where would it get a bank in trouble?
Making Sense of the CFPB's Data-Sharing Proposal
The CFPB put out a proposal last fall for what's being called open banking, and it has been on my mind since. The idea is that clients should be able to share their financial data with third parties through secure APIs, and that banks should be required to make that possible. I read most regulatory proposals trying to picture what I'll eventually have to build. This one I read as someone who has spent years building data plumbing, and from that angle it's the most interesting thing to cross my desk in a while.
