FinTech Founder Turned FinTech Enabler Says Success Now Means Prioritizing Balance Sheets Over Growth

The FinTech business model has evolved the past decade and a half, well beyond its roots in the financial crisis of 2008. Back then, traditional financial institutions (FIs) were in the midst of upheaval, and digital players rose up to take advantage of that disruption. For a while banks and FinTechs competed for the same set of customers, for their loyalty and dollars. FinTechs sought growth at any cost.

Times have changed. Yes, growth is still an essential factor in the long-term viability of any FinTech. Jon Gaskell, SVP of strategic partnerships at Ingo Payments, told Karen Webster that amid the regulatory uncertainty surrounding financial services and the cash burn of many FinTechs, including Synapse, mergers and acquisitions will accelerate into 2025, marked by FinTechs buying each other — and where big banks may acquire FinTechs.

No matter if they’re acquisition targets or go it alone, there’s a universal truth, according to Gaskell.

“To be a FinTech now is to be faced with a tremendous amount of scrutiny,” he said, adding that balance sheet strength is critical, regardless of whether the FinTech is seeking its first customer or its millionth. And vetting those customers while binding those relationships is no certainty. “To make sure they’re good customers,” Gaskell said, “where every other week, they’ll put their paycheck into this neobank … well, that’s hard to do.”

Through the past 24 months, he said, the prioritization of growth has been replaced by an emphasis on security.

Gaskell has been an active player through these years of FinTech evolution, including in deal-making, stretching back well before his current role at FinTech Ingo (which, incidentally, has clients that are FinTechs too, aiding them in money mobility). His perspective was delivered as part of the “What’s Next in Payments” series on what it means to be a FinTech in 2025.

In 2008 Gaskell co-founded SmartyPig — operating as an online savings account that sought to improve upon the “envelope” approach of setting aside funds in separate accounts for specific goals.

“When we launched, the economy had tipped over,” he recounted to Webster, “and creating financial literacy was the niche of SmartyPig, and it seemed to resonate.”

This was, of course, before smartphones were the mobile conduits of everyday life that they are now, before app stores, and a time when the iPhone was in its infancy. Fast-forward seven years, and SmartyPig was sold to Q2 (Gaskell served as vice president there). SmartyPig accounts have been offered through Sallie Mae since 2016.

Now, he said, halfway through the new decade, FinTechs “need to have your regulatory and compliance ducks in a row. You used to be able to depend on your bank partner for a lot of that.” But banks are now looking a bit more keenly at FinTechs that want to bank or partner with those FIs, and focusing on how those tech-enabled FinTech will make money while taking advantage of niche markets and remaining compliant.

As he said, “The FinTechs can’t go fast and break things — the banks don’t want to go fast and they definitely don’t want to break things.”

Ingo, for its part, is operating as a FinTech, supporting other FinTechs and is supporting banks too. “We’re moving into embedded banking,” Gaskell said, “which has put us in a position to act more like a bank.”

And with that broad business model in place, he said, the company is looking at deals and partnerships with a discerning eye (in one example, last summer, Ingo acquired cloud-based banking platform Deposits Inc.) to move at what he termed the “speed of bank … we can’t spend the dollars and the cycles and the time to watch 9 out of 10 things fail.”

As he told Webster, “Security has to ‘top’ growth. We have to make sure that we’re bringing in real customers that will become really good customers.”