Banking-as-a-service fintech Synapse is having a rough year, to say the least.
Earlier this month the company laid off 40% of its workforce, or 86 employees. This was on top of the 18% that the company laid off in June.
There is the now very public dispute they have been having with Evolve Bank & Trust, highlighted by Fintech Business Weekly. And they appear to have lost their largest client, Mercury.
Today, Forbes is reporting that Synapse and its clients need to be removed from Evolve’s platform by December 31. According to Forbes, Synapse still has six FBO accounts for 40 clients at Evolve that will all need to be transitioned away in the next two months.
With increased regulatory scrutiny in the BaaS space, some banks like Evolve are looking to remove the intermediary and deal directly with the fintech companies. This is apparently what has happened with Mercury and Evolve.
It will likely be a challenging end of the year for Synapse.
Fintech Synapse was an early mover in the banking-as-a-service sector, but structural faults and operating problems have led to missing funds and a messy breakup with longtime partner Evolve Bank and Trust. Now, the startup needs to find a replacement fast.
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Peter Renton is the chairman and co-founder of Fintech Nexus, the world’s largest digital media company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.