What’s the big deal with Column?

Former Plaid President and co-founder William Hockey and his wife Annie purchased Northern California National Bank, gutted the infrastructure, and replaced it with a custom-built core, modern architecture, and a hyper focus on supporting fintechs from a development point-of-view. The bank that emerged on the other side was Column.

Sounds like a niche product, so why should we care? A few things to consider:

• BaaS and embedded finance is set to reach a $7 trillion value in the next 10 years
• There are very few providers in the BaaS market with modern tech stacks, and much less with internal teams focused directly on creating value to development
• Column is a nationally chartered bank with the ability to support multiple product lines, including — ACH, wire, deposits, card programs, and loans

Now let’s level set on some broad realities, regardless of the tech stack:

Does this mean every other BaaS provider should pack it up and quit?
No. There are currently significantly more fintechs and other organizations looking for BaaS services than every current provider in the US could possibly support. In short, there’s room for everyone.

Will banks and other BaaS providers be able to compete with Column?
Overall, yes, I believe so. The implementation process is rarely the longest part of onboarding with a BaaS provider. Typically due diligence and finalizing the contract take far longer than the actual implementation. All BaaS providers still operate in the same arena of compliance and regulation, regardless of how modern the tech stack may be.

How does Column impact BaaS product strategy for other providers?
I think most providers would tell you they have roadmaps to modernize their offerings; however, the underlying infrastructure can be challenging, so this will likely take time. For other banks especially, they have other business segments and customers to think about across the enterprise which will impact their roadmaps. Similar to the sheer number of fintechs, the diversity of product types will also make enough room for other providers to succeed. Column will struggle, as any organization does, to be everything to everyone, which will leave room for other providers to provide scale into other target markets (commercial, SMB, etc.).

Column will make a positive impact on the BaaS market, and will cause some banks and providers to drive faster down their product roadmap than originally thought possible. Each provider pushes the other to be better through healthy competition, and this is no different. As the fintechs impacted the banks approach to their services, Column will impact BaaS, and the world will be better for it.