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.

FEATURED

Against The Clock: Synapse Has Two Months To Find New Bank Partner

By Emily Mason, Forbes Staff   

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.

FROM FINTECH NEXUS

ALSO MAKING NEWS

• USA: Bank branches inside supermarkets are closing 7 times faster than other locationsPNC, Citizens Financial and U.S. Bank shut the most in-store locations recently at chains including Safeway and Stop & Shop.
• USA: TransUnion Failed to Quickly Place or Remove Freezes on Credit ReportsThe Consumer Financial Protection Bureau accused the credit bureau, one of three major credit reporting agencies, of “lying to consumers.”
• USA: Bread hit by card-spending slowdown, rising delinquenciesIntensifying economic pressures caused Bread Financial’s customers to cut their credit card spending by 13% during the third quarter as the rate of delinquent accounts rose.
• USA: CRA update lets banks get credit for climate resilience“We have learned through hard-earned experience that it is better to address risks as they emerge, rather than after they’ve caused damage,” Acting Comptroller Michael Hsu said at an FDIC board meeting Tuesday.
• Global: Sam Bankman-Fried Says FTX Actions Were Guided by LawyersThe FTX founder previewed a potential defense as the judge required him to walk through subjects that were in dispute. The judge will rule on what Bankman-Fried could say to jurors.
• Global: Fintech Meltdown, Working for Musk, Regulating AI: WTF HighlightsThe coming wave of fintech failures. How to “own your story” while working for a leader like Elon Musk. A regulatory crackdown on artificial intelligence. These are some of the topics discussed by speakers at The Information’s Women in Tech, Media and Finance conference.
• Global: Adyen’s fighting to scale and PayPal is fighting to keep itAdyen and PayPal are feeling the 2023 heat. While Adyen is battling dropping shares and low revenue growth, PayPal is busy tackling an antitrust lawsuit for violating the US competition laws due to its anti-steering policies.  
• Europe: Digital bank Monzo in talks to sell new £300m stakeThe share sale, which will value Monzo at more than £3.5bn, is likely to be the last before it pursues a bumper stock market flotation, Sky News learns.
• Europe: UK Banks Call for Caution on Artificial Intelligence RegulationThe UK’s top financial watchdog, which sifts through billions of card transactions as part of its monitoring of the country’s top banks, is weighing adopting generative artificial intelligence to help examiners collect and synthesize that information.