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FinWise Insights June Edition: a Fintech, Payments, and Banking Newsletter

By June 3, 2025June 5th, 2025No Comments

FinWise Insights: a fintech, payments, and banking, newsletter

Hey Fintech Friends! In this edition of our FinWise newsletter, we’re excited to share a variety of top hits ranging from recent announcements, product news, to insights from your favorite industry experts. Ready to Fly with FinWise? 🦉

News recap.

Partner spotlight.

FinWise Bancorp Announces Strategic Lending and Credit Enhanced Balance Sheet Program with Backd to Support Business Owners

Backd Business Funding, headquartered in Austin, TX, expands financing opportunities for small and medium-sized businesses that have been underserved by traditional financial institutions via their product offerings that include Working Capital Advance, Business Line of Credit, and B2B Buy Now Pay Later. The FinWise Bank Loan Product offered through Backd will be an unsecured, fixed rate, business term loan that will be available nationwide, targeting SMBs with annual revenues of $3M+ and have been in business for more than 3 years.

What does this mean?

  • Partnering with FinWise will widen their reach as the Bank can offer loans nationwide.
  • The Credit Enhanced Balance Sheet Program will allow Backd to further expand their loan volume.

Product spotlight.

1. Fintech Connect – Powering the Future of Lending with FinWise Bank

FinWise Bank is proud to unveil Fintech Connect, our newly enhanced API crafted to transform the lending experience for our Marketplace Lending (MPL) partners. Designed for both current and prospective partners, Fintech Connect delivers a streamlined, compliant, and efficient platform for underwriting, loan processing, and fund disbursement, setting a new standard for fintech lending solutions.

Fintech Connect empowers partners to submit underwriting data effortlessly, which is evaluated against a robust set of rules aligned with our agreed-upon underwriting criteria. Upon approval, funds are disbursed directly to the end recipient, ensuring a frictionless process. This versatile API supports a broad spectrum of asset classes, from personal loans to working capital loans for small businesses, offering unmatched flexibility to meet diverse lending needs.

Looking ahead, Fintech Connect is poised to expand its capabilities with exciting features currently in development. These forthcoming microservices will enable partners to offer a wider array of financial solutions, enhancing their ability to serve customers with comprehensive, innovative tools. This forward-thinking approach ensures Fintech Connect remains a scalable, future-proof platform for fintech growth.

At the heart of Fintech Connect is our commitment to autonomy, efficiency, and compliance. By enabling strategic partners to submit loans that are validated against our underwriting policies in real-time, we provide the tools for faster decision-making and business scalability. The API’s rigorous data validation process ensures adherence to regulatory standards, a critical component in today’s MPL environment. Partners can submit detailed loan recommendation statuses—approved, denied, withdrawn, cancelled, or to be funded—complete with reasoning and supporting documentation as needed. This transparency underscores FinWise’s compliance-first approach, fostering trust and enabling effective risk management.

Fintech Connect is designed to integrate seamlessly with FinWise’s broader ecosystem, including our innovative MoneyRails™ solution. As we continue to develop these platforms, Fintech Connect and MoneyRails™ will work in tandem to provide lending partners with a cohesive suite of disbursement options. This interoperability will eliminate operational silos, allowing partners to deliver faster, more convenient financial services to their customers while maintaining compliance and security.

2. Credit Enhanced Balance Sheet Program and the Key Benefits

Credit Enhanced Balance Sheet addresses the challenges that lending and card programs face diversifying their funding sources and managing capital efficiency.

  • Capital Efficiency – Offers potentially lower cost of funds, making it a cost-effective solution to strategic programs.
  • Enhanced Funding – Allows strategic programs to diversity their sources of funding that extends the reach of their warehouse facilities.
  • Yield Enhancing – FinWise splits an agreed upon yield with the strategic program and any positive difference in yield is passed through to them.
  • Complete Offering – Strategic programs receive a complete package for financing and sponsorship needs, including compliance and oversight processes.

Thought leadership.

The AI Crossroads in Banking: Risk, Reward, and the Path Forward.

Artificial intelligence is no longer just a tech buzzword—it’s rapidly becoming a strategic imperative for financial institutions. But as banks weigh the promise of generative AI against regulatory complexity and operational risk, one question looms large: how do we move forward responsibly?

In this edition, Caitlin Hutchinson Maddox, Associate at BFKN and Stan Orszula, partner at BFKN, explore how bank-fintech partnerships may hold the key to navigating compliance while unlocking AI’s potential, and Richard Thiessens, CTO at FinWise Bank, offers a candid, behind-the-scenes look at the practical—and human—challenges of implementing AI in real-world banking environments.

Whether you’re shaping your institution’s AI roadmap or simply trying to keep up with the accelerating pace of innovation, these two perspectives offer both legal insight and on-the-ground experience to help guide the way.

Banking Ex Machina: The Potential of Bank-Fintech Collaboration for AI.

Caitlin E. Hutchinson Maddox, Associate, BFKN Financial Institutions Group

Guest Contributors:
Caitlin Hutchinson Maddox and Stan Orszula at BFKN Financial Institutions Group

Banks have thus far remained cautious to develop, adopt, and integrate generative artificial intelligence (Gen AI), large language models (LLMs), and other similar innovations, such as agentic AI, into their business and operations—and potentially with good reason. Many of these technologies remain prone to “hallucinations” (generating false information with a sense of authority) or include various inconsistencies in their responses. Banks must also consider and address various legal, regulatory, and risk management issues arising from their potential use and integration of AI technologies. These issues run the gamut from cybersecurity, information security, systemic risk, and continued compliance with consumer protection laws, many of which will need to be integrated into banks’ policies, procedures, and control processes.

However, the dam may soon break. The Trump Administration has signaled an embrace of Gen AI and similar innovative technologies, as reflected in the “Removing Barriers to American Leadership in Artificial Intelligence” Executive Order, marking a shift away from the guarded approach of the Biden administration. The technology is also maturing quickly, and despite certain hurdles specific to Gen AI, LLMs, and similar technologies, banks have extensive experience onboarding and adapting their businesses to innovative technologies. 

Read More from Caitlin and Stan

AI in Financial Services.

Richard Thiesens, EVP Chief Technology Officer at FinWise Bank

Richard Thiessens, EVP, Chief Technology Officer at FinWise Bank

Have you ever felt simultaneously ahead of the curve and behind it? That’s how I often feel when reflecting on generative AI within the financial services sector. I’ve always been someone who digs into how things work—whether it’s racing engines, hacking, or now, artificial intelligence. I experiment in my home “lab,” playing with open-source large language models and dabbling in supervised training. While I’m far from an AI expert, I consider myself a “big picture” thinker, and I share this background to give context to my perspective.

Although artificial intelligence has been around for decades, the recent surge in attention is focused almost entirely on generative AI. So, when I refer to AI in this article, that’s the lens I’m using.

Cautious Optimism

There’s a palpable tension in our industry—between the fear of missing out and the fear of getting it wrong. AI’s capabilities are undeniably powerful, yet leveraging them responsibly is a real challenge. Most smaller financial institutions can’t afford the time or cost to build AI tools internally, leaving us dependent on third-party vendors. But this dependency comes with significant risks.

Recently, JPMorgan issued a stark open letter warning of the rush to deploy AI without adequate safeguards. Among their concerns:

  • 78% of enterprise AI deployments lack proper security protocols
  • Most organizations can’t explain how their AI makes decisions
  • Security vulnerabilities have tripled since mass AI adoption

Read More from Richard

Industry recognition as a Top-Performing Bank.

FinWise Bank's updated industry recognition as top performing bank 2024

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