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Three conversations show how the industry is starting to think differently about where value comes from

Tearsheet Editor-in-Chief Zack Miller had three recent conversations on the Tearsheet Podcast.

Almost none of the guests spent much time talking about the financial product itself. The discussions kept circling back to the work surrounding those products. How decisions get made, how information gets verified, and increasingly, how AI can take work off a customer’s plate instead of simply answering questions.

Whether it was Slash rethinking business banking, Figure redesigning debt consolidation, or leaders from McKinsey and QED Investors discussing AI’s impact on financial services, they were all pointing toward the same conclusion: value isn’t coming from product alone but from everything wrapped around it.

The financial product is no longer enough

Miller’s guests kept returning to the idea that real value comes from helping customers move closer to their goals.

The financial product is simply one piece of solving those problems. That’s the idea that Slash, a business banking platform, has built its business around.

Victor Cardenas, the company’s co-founder and CEO, argued the biggest flaw in business banking is the divide between the companies that hold a business’s money and the companies that build the software used to manage it.

“For the longest time, there were two categories of companies operating in the SMB finance space,” Cardenas told Miller. “There were companies that actually bank and move money… and then there were companies that build financial software. Our view is these should not be two kinds of companies.”

That belief shapes Slash’s strategy. Instead of treating banking and financial software as separate businesses, it combines them into a single operating layer. “Your product is much more powerful if you’re not only ingesting data… but actually acting on the data,” Cardenas said.

Traditional financial software can surface insights. Slash, on the other hand, can move money, issue cards, approve payments, and automate workflows because it controls the bank account itself.

For performance marketing agencies, that means replacing manual reconciliation with dedicated client accounts, automated advertising-spend tracking, and real-time fee collection. The bank account then becomes the infrastructure that powers the business.

[Watch or listen to the full conversation with Slash here.]

Execution replaces trust

Figure, which uses blockchain and AI to modernize lending, and Method, which builds lending infrastructure for financial institutions, are approaching lending with a similar mindset that Slash is bringing to business banking.

Traditional debt consolidation has always relied on trust. A lender disburses funds, and the borrower is expected to pay off existing credit card balances. Whether that actually happens often isn’t clear until weeks later, when credit bureau data catches up.

Figure and Method looked at that process and asked a simple question: Why leave that step to chance?

Instead of relying on borrowers to pay off their debts, the companies built a system that verifies liabilities in real time and pays creditors directly when the loan is originated. That gives lenders a current view of a borrower’s obligations rather than relying on weeks-old credit bureau data, while ensuring the loan proceeds are used exactly as intended.

“It’s a closed-loop system,” Method co-founder and COO Mit Shah explained to Miller. “The money goes directly to the creditor. It never touches the consumer’s bank account.”

That seemingly tweaked small operational change has meaningful implications.

With verified liability data, Figure can underwrite against a borrower’s current debt obligations rather than a weeks-old credit report. It also removes uncertainty around how loan proceeds are used, giving lenders greater confidence while improving outcomes for borrowers.

According to the companies, borrowers using the platform were 50% less likely to become seriously delinquent, improved their FICO scores by an average of 21 points within 30 days, and saved roughly $500 a month in interest payments.

[Watch or listen to the full conversation with Figure and Method here.]

The next moat isn’t the product

McKinsey and QED suggest AI is compressing the lifecycle of financial products. When software can be built faster and at lower cost, products become easier to replicate and harder to defend.

“We’ve been trying to figure out what a moat even means in the age of generative AI,” Mike Packer, partner at QED Investors, told Miller. “Trust and distribution become much more valuable.”

Max Flötotto, senior partner at McKinsey, sees the same dynamic playing out in banking. “The simplest form of banking is collecting deposits and making loans,” Flötotto said. “If customers let their own agents optimize deposit pricing and move money to whichever bank offers the best rate, banks risk becoming dumb product providers in the background.”

The same thinking extends to another area generating great interest: stablecoins.

Despite processing trillions of dollars annually, only a small share of today’s stablecoin volume reflects everyday commercial payments. Much of it still comes from trading and crypto markets. But both Flötotto and Packer argued that stablecoins are already changing expectations around how money should move: instantly, globally, and as programmable infrastructure.

Whether powered by AI, stablecoins, or embedded finance, the broader shift is toward financial workflows that require less manual effort and more intelligent automation.

[Watch or listen to the full conversation with McKinsey and QED here.]

Where value moves next

Listening to these conversations, it’s hard not to notice where everyone’s attention is shifting. Nobody is obsessing over the bank account, the loan, or even the payment itself anymore.

The conversation has moved to everything adjacent to those products: gathering better context, verifying information in real time, removing manual work, and ensuring the intended financial outcome actually happens.

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With BNPL mainstream, Klarna shifts its focus to better economics

Some fintechs face a nice-to-have problem where acquiring the next customer is no longer the hardest challenge. Instead, the bigger challenge is keeping customers engaged and finding new ways to monetize those relationships.

Klarna is among them. In quick succession, the Swedish fintech applied for a U.S. bank charter, expanded into everyday mobility payments, embedded financial wellness tools into its app, and secured a landmark antitrust victory through its Swedish subsidiary, PriceRunner.

After spending the better part of a decade building one of the world’s largest BNPL businesses, Klarna is now focused on improving the economics of every existing customer relationship. Its strategy is to lower funding costs, increase engagement between purchases, and create new ways to monetize the millions of consumers already in its network.

BNPL built Klarna’s scale – now the company is focused on maximizing the value of that scale.

BNPL is now table stakes. That changes the growth equation and brings the focus to customer relationships.

Flexible payments are increasingly an expected part of the checkout experience rather than a point of differentiation. Recent research found that 43% of consumers abandon a purchase when BNPL isn’t available, while 42% switch to a lower-cost alternative. BNPL still influences conversion, but the competitive edge is increasingly shifting toward how seamlessly financing fits into the broader shopping journey and what happens after the purchase is complete.

For companies built on BNPL, that creates a new challenge. Once the product becomes commonplace, growth has to come from somewhere else.

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Why Green Dot believes two independent businesses are better than one

Green Dot is reorganizing around the idea that its banking and technology businesses are better positioned to grow independently.

In June 2026, Green Dot shareholders approved the company’s November 2025 restructuring plan, with more than 99% voting in favor. The transaction will create two independent businesses: Smith Ventures will acquire and privatize Green Dot’s fintech business, which will continue operating as an independent embedded finance company. CommerceOne will acquire Green Dot Bank, creating a new publicly traded bank holding company that will serve as the fintech’s exclusive issuing bank.

Green Dot’s restructuring offers a window into how some financial firms are rethinking scale, specialization, and long-term growth. Here’s why.

The company that helped define embedded finance

Long before Banking-as-a-Service became a category, Green Dot was operating both a regulated bank and a fintech platform under one roof. Its infrastructure powers prepaid cards, digital banking products, tax refunds, wage payments, and embedded finance programs for partners. It has managed more than 80 million accounts as of November 2025 and built one of the industry’s largest cash-access networks. 

For years, that combination worked as an advantage. The fintech controlled the customer relationships and technology stack. The bank handled regulation, deposits, and issuing.

But as embedded finance matured, the benefits of keeping everything together may have started to look smaller than the costs.

The crosscurrents hiding inside the model

Running a fintech and a bank together sounds powerful. But in practice, the two businesses often want different things.

A fintech wants speed, new partnerships, new products, and basically flexibility. On the other hand, a bank wants risk controls, regulatory compliance, capital preservation, and overall operational discipline.

Those priorities don’t always co-exist comfortably.

The restructuring addresses a growing divergence between Green Dot’s two businesses. The embedded finance business needed greater flexibility to pursue growth, while the bank remained subject to regulatory and capital constraints that required a different operating cadence.

The separation allows each business to pursue its own priorities. The fintech gains independence under private ownership, while the bank gains additional capital, a broader sponsor banking platform through CommerceOne, and the flexibility to expand as a sponsor bank by serving additional partners.

Why this move feels bigger than Green Dot

The move is notable because it runs counter to a strategy that shaped much of fintech over the past decade. Throughout the 2010s, fintechs sought bank charters or brought banking capabilities in-house, driven by a belief that controlling the entire stack would create a competitive advantage.

But controlling the entire stack also means inheriting the complexity of it all. Recent regulatory actions have exposed the challenges of balancing rapid fintech innovation with heightened regulatory expectations around sponsor banking, compliance oversight, and Banking-as-a-Service partnerships.

Going against the flow

Rather than balancing the priorities of a bank and a technology company within one corporate structure, Green Dot has chosen to give each business its own mandate. The decision reflects a recognition that fintech innovation and regulatory infrastructure rarely advance in lockstep.

Green Dot isn’t alone in deciding that different businesses may be better served independently. In 2024, UK fintech Monese separated its consumer banking business from its B2B banking infrastructure platform, XYB, after the two businesses began following different growth trajectories. According to Monese, its consumer banking business and its fast-growing B2B platform business had “developed in two different directions,” prompting the split.

Within the U.S. fintech landscape, Green Dot is an outlier, though. While fintechs like Block and SoFi have spent the past decade moving closer to banking through charters and acquisitions, Green Dot is moving in the opposite direction, suggesting that greater specialization can unlock stronger long-term growth by allowing each business to focus on what it does best.

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‘Lightning in a Bottle’: Frank Chaparro on Stablecoins and Tokenization’s Promise

Tokenization Frank Chaparro

In this episode of the Tearsheet Podcast, I sit down with Frank Chaparro, the host of The Scoop and Director of Special Products at The Block. He has years of experience at the intersection of digital assets and Wall Street. Frank offers a unique perspective on blockchain technology and tokenization, highlighting their early impact on financial markets and projecting out where Web3 may lead for financial services.

“When you’re managing trillions of dollars, offering new, innovative products isn’t just risky. It’s a massive operational challenge,” says Chaparro. His insights explain why tokenization, stablecoins, and blockchain technology are growing in popularity. These innovations overcome challenges faced by traditional financial institutions, offering new solutions and efficiencies in the financial sector. Frank explores how stablecoins bridge decentralized finance and traditional systems. For example, he explores the challenges of institutional investment in crypto ETFs. His analysis covers the complexities of this fast-evolving space.

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The Promise and Challenges of Tokenization

Frank emphasizes that tokenization is more than a buzzword: it’s a potential game-changer for financial systems. “At its core, tokenization offers efficiencies. Especially, in processes like property transactions and trading real-world assets,” he notes. But, he warns that significant hurdles remain. These include the lack of robust infrastructure and regulatory clarity.

Stablecoins as a Catalyst

Stablecoins, Frank explains, are a “lightning in a bottle” moment for crypto. “They’re effectively tokenized representations of dollars. And their ease of use has driven market growth to over $200 billion,” he says. Institutions and individuals alike are increasingly adopting stablecoins for payments and payroll. Major players like Tether and Circle are leading the way.

Institutional Adoption of Crypto ETFs

Crypto ETFs are making waves with record-breaking launches. But, Frank argues that institutional adoption of crypto is still in its early stages. He believes there’s much more progress to come. “Advisors are still figuring out how Bitcoin fits into the classic 60-40 portfolio model,” he says. Firms like Fidelity and BlackRock are exploring crypto allocations. This highlights the undeniable potential for growth.

The Role of Regulation

Frank notes that banks are often held back by internal policies, not regulatory restrictions. These policies prevent them from fully engaging with crypto. “The demand for ETF products has been phenomenal. But banks are navigating a complex regulatory landscape,” he explains. He believes regulatory clarity on stablecoins and digital assets could be a tipping point for wider adoption.

Sizzle vs. Steak: Deciphering Crypto’s Value

When asked how to separate hype from substance in crypto, Frank shares a pragmatic approach. He says, “It’s about looking beyond the present hype and assessing long-term potential. Technologies like NFTs and meme coins might seem frivolous now. But their underlying concepts, like financializing culture, hold promise.”

The Big Ideas

  1. Tokenization could revolutionize industries by making processes more efficient. Frank highlights its application in property transactions. He says, “Tokenizing deeds could bring unprecedented efficiency to a traditionally slow process.”
  2. Stablecoins are enabling seamless transactions between traditional and decentralized finance. “It’s just so damn easy to send stablecoins compared to alternatives like PayPal,” says Frank.
  3. Despite regulatory and operational hurdles, major banks are inching closer to crypto adoption. Frank predicts, “By 2025, we’ll see wealth management portals opening up to these assets.”
  4. Regulatory clarity remains a double-edged sword. Frank explains, “Banks fear the potential repercussions of engaging with digital assets. Even when there’s no explicit rule against it.”
  5. Meme coins and NFTs hint at a future where culture and finance intersect. Frank calls it “extracting value out of humor,” a concept that could reshape how we view digital assets.