Synapse
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Em Conversa: Financial Inclusion With Synapse

Em Conversa looks to uncover the secrets in Latin America (LatAm) that have caused the fintech market to boom, from being worth less than $50million in 2016, to $2.1billion in 2022. This week we spoke to Sankaet Pathak, founder and CEO of Synapse, to understand how organisations are making US bank accounts more accessible to those located outside of the US itself.

Brazil’s Real continues to impact consumers in many areas of their life, who are faced with credit cards that cost four times more than US cards. As a result many are looking to save their money in a more stable currency. With more and more people trying to obtain access to a US bank account, organisations like Synapse are making financial inclusion a top priority to ensure everyone has equal opportunity to save their money as they wish.

Sankaet Pathak, founder and CEO of Synapse
Sankaet Pathak, founder and CEO of Synapse

Synapse’s purpose is to design and develop banking software solutions. The company offers a banking platform that enables companies to provide finance products to their customers. Learning more about the company’s offering and how LatAm customers are making the most of it, we sat down with Sankaet Pathak:

Can you tell me more about the company and your role within it?

I am Sankaet Pathak, founder and CEO of Synapse. I founded the company with a mission to ensure that everyone around the world has access to best-in-class financial products, regardless of their net worth.

After immigrating to the US from India, I experienced first-hand the difficulty in opening a US bank account or getting approved for credit without a financial history. I did not fit into the traditional financial framework and realised there must be millions of others experiencing the same problem.

That’s why the company is dedicated to providing access to financial services for people who have been left behind by traditional banking institutions and enabling developers to create more creative and accessible financial products on its API infrastructure, at industry-wide scale.

What are some fintech trends you have seen in Brazil and LatAm more generally? 

There are more than 1.7 billion underbanked adults worldwide, a large proportion of which reside in Latin America. Synapse is close to reaching one million accounts held by Brazilians and we are rapidly expanding to other countries in Latin America. What we are seeing that is driving this growth is a number of dynamics:

Many economies in Latin America are experiencing high inflation. Transferring assets from volatile local currencies to dollar investments is one of the main reasons for clients to open US accounts.

We are also seeing trends such as the gamification of the economy. Brazil is the country with the second most Fortnite players. Gamers are spending more and more within these platforms and commerce is only growing, including thousands of followers connected to watch influencers play. As a result, the country where people live no longer defines them, making commerce and payments more global.

Finally, freelancers, gig workers and social influencers often struggle to get paid through creator funds. Those outside of the US even more so as they do not have a US bank account.

As a result, we are seeing fintechs all across Latin America launching and scaling solutions to address these needs.

What is Synapse doing to help improve the sector in the region?

Our approach is simple: create a unified Banking-as-a-Service (BaaS) platform that breaks through barriers. These include access to industry deposit, payment, card issuance, credit, lending, and investment services previously available to only upper and middle classes through traditional banks. By making our platform accessible globally and empowering an industry of innovators who are making financial services and financial health more accessible, more equitable, and more sustainable, Synapse believes we can fulfil our mission at scale.

To this end, we recently launched Synapse Global Cash, a secure cash management account enabling residents in 35+ countries to invest, hold and spend US dollars. By empowering people around the globe to open fully regulated US accounts, Global Cash can insulate global citizens from monetary concerns in regions experiencing hyperinflation, instability, or negative interest rates, as well as open the door to a wealth of financial freedom to:

  • Receive payments in USD.
  • Make international purchases.
  • Invest in global markets.
  • Participate in foreign exchange and transfers.
  • Access family financial services across borders.
What are some unique challenges?

A unique challenge of launching US accounts for non-US residents was extending transaction monitoring, identity scoring, and Know Your Customer (KYC) flows. It is a challenge to customise them to comply with both international markets and US regulatory requirements, thereby providing a secure, global platform.

As Synapse’s Brazilian customer Nomad stated: “Because of the intricacies of cross-border transactions, we needed a partner that was authentically global with the experience to understand the finance, technology, and US compliance systems that make this all possible,” said Nomad CEO Lucas Vargas. “Synapse understood our challenges and made life simpler for us. They provided a valuable solution that no one else could.”

Author

  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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