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Leaders In Payments
Leaders In Payments
Chris Dean, Co-Founder & CEO of Treasury Prime | Episode 309
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This week on Leaders in Payments Podcast, we journey through the symbiotic relationship between banks and tech firms, discussing the tailored support Treasury Prime offers to community and regional banks. Co-Founder and CEO of Treasury Prime, Chris Dean’s expertise is not just theoretical; it's grounded in the practical challenges of real-time reconciliation, settlement, and the adaptive strategies banks are employing to lead in this fintech renaissance.
We examine what truly differentiates Treasury Prime in the fiercely competitive fintech industry. From their unique direct integrations with core banking systems to the anticipation of industry consolidation and heightened regulatory pressures, Chris provides guidance on maintaining the delicate balance of innovation and compliance.
Through his dual passion for startup culture and beekeeping, we explore the parallels between the precision required in fintech and the meticulous care needed for apiary management. It's an episode rich with personal anecdotes and professional insights.
Welcome to the Leaders in Payments podcast, where we talk to C-level leaders from across the payments landscape. We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments. We will also hear stories from our guests about their journeys to the top.
Speaker 2What's happening right now is tech firms are doing more and more of the last mile that banks used to do through branches and whatnot, and we're here to service that. So we have a API platform that allows banks and I'll call them Vintechs tech firms to talk to each other.
Speaker 3That was Christine, the co-founder and CEO of Treasury Prime, and he's my special guest on this episode of the Leaders in Payments podcast and I'm your host, greg Myers. Treasury Prime is a banking as a service operating system that provides modern banking software so that Vintechs or corporate clients can directly connect to the underlying infrastructure of banks through its APIs, and banks can distribute their products through Vintechs or embed them in apps and other new channels. Chris and I discuss what makes Treasury Prime unique in the marketplace where the industry is heading the importance of focusing on banks and making sure that the banking system is safe and secure. We've got a great episode ahead, so let's get started. Hi, chris, thank you for being here and welcome to the Leaders in Payments podcast. My pleasure Great to be here, greg. So let's go ahead and dive in. If you don't mind, tell our audience a little bit about yourself, maybe where you grew up, where you went to school, where you currently live, a few things like that. We'll circle back to your professional journey in a few minutes.
Speaker 2Sure, I live here in San Francisco, where I am right now, and I grew up in San Diego, which is a very different place. The weather is always great every day. In San Diego, I grew up in the world's smallest house on the ocean and I miss it all the time. I'm a deeply tenured nerd. I've been like this my whole life. I went to Caltech and Pasadena because that's in California, not in some cold place and I studied physics there and I was a machine learning researcher for a while. And then at some point my wife said she had to move back home, san Francisco, take care of the folks, and so we moved that here, and that was many, many years ago.
Speaker 3Well, let's talk about Treasury Prime. So tell us what Treasury Prime does.
Speaker 2Sure Treasury Prime. We're on a mission, like a lot of startups, and our mission is to remake how the US banking system works. If we look at how banking is going, the US has a great, all the very complicated banking system, but what's happening right now is tech firms are doing more and more of the last mile that banks used to do through branches and whatnot, and we're here to service that. So we have a API platform that allows banks and I'll call them Vintechs tech firms to talk to each other in a safe and sound way, and I've been doing that for quite a while now across three different companies.
Speaker 3So when you say banks, obviously there are banks, credit unions, community banks, banks of many sizes. So is it a segment of banks or is it really any bank? Well, I like to say it's any bank.
Speaker 2In practice it's more on the commercially chartered community banks. That's like a typical bank for us is like two, three billion in deposits that kind of number. We do have banks with hundreds of billions in deposits and assets. I do not think I'll ever get a money center on the platform. It's just too hard. So none of the B of A city JP Morgan guys. I'm happy to work with any credit union.
Speaker 3It just never comes up and your APIs are just put on top of a banking platform. Is that sort of how it works?
Speaker 2Yeah, so our technology is. Actually it's a pretty big moat for us compared to other folks who do this. We go into a bank and we connect directly to all the existing bank systems. Connect to one of the bank cores for a little bank that will just be to have one core We'll connect directly to that so we can do reconciliation and settlement in real time. We'll connect to all their different payment gateways. We'll sometimes connect to their card systems. Usually their card systems aren't really at the level of functionality that a check formal needs will bring in our own, but we connect directly with everything and that's kind of how we do it. I worked at a SVB for a hot minute and I learned all the ways that you can mess up here.
Speaker 3So we are very careful about building our system so that it's harder to mess up and are you selling directly or do you go through partnership channels, or a little bit of both?
Speaker 2So we're the both Our main clients, the bank. Right, we go to a bank and we have two basic kind of customers. The first banking customer is they're new to the space. They're a regional. In some small region, somewhere there may be a $5 billion bank. They're seeing their deposits dry up as the nationals and superregionals move in and they're looking for alternate partners and deposits as a new channel of business, and so we'll teach them how to do that and they buy our software and that enables them to run that program. And the other folks are people who've been doing this a little while, but they've been doing it by themselves, slinging flat files around, doing things like that, and pretty quickly they realize that's untenable. They need an actual software product and so they'll do that for us. There's tech firms also that we have, like FinTechs, who we talk to, big ones and small ones, but what we try to do is make sure the bank is leading all those relationships.
Speaker 3Is that sort of the way they want it to be? The lead as opposed to the FinTech?
Speaker 2They do. I mean, if you look at the, especially now, like this has changed maybe in the last couple years. Maybe you've been able to get away with almost disintermediating the bank for a while now, like if you're an intermediary. We've never really acted like this, but we could, or we could have in the past, where we sit between a bank and a FinTech and we pretend to be the bank and answer all the like here's how you do compliance, here's how you do KYC, here's how you have a fraud, all that stuff. But nowadays the US regulators have very clearly said please don't do that. And all the folks who are doing that in the banking world are in trouble. And none of our banks are in trouble because none of them do that. And that's why we do it the way we do it, because we're trying to transform how US banking works, and the only way to do that is to get the regulatory bodies on your side, the banks are your end customer.
Speaker 3You're connecting the FinTechs and you mentioned deposits. Is that where you feel you kind of play is to help the banks in that part of their business?
Speaker 2It's a lot of it for sure. I mean most of the banks. What they're doing is they're buying deposits. It turns out that Tech firms, especially like the prototypical Silicon Valley venture back startup, which is a lot of these tech firms they are really really good at building products and they're really really good at marketing to their segments, and banks Are good at banking, which is a different problem. So they've existed for, you know, hundreds of years, decades at least, by having branches and having a relationship with the people in their town or in their region, and as we become more nationalized, that's shrinking. But this is a way they can have a significant channel. Like we don't have anyone on our platform with more than 50% of deposits from us, more like 20%, but it is a significant source and it is far cheaper to do it this way and, you know, as an ROI Than it is to I'm going to build another branch in the town next door absolutely so.
Speaker 3do you sell this via just a SAS model or is there consulting fees or implementation fees? Can you explain kind of the pricing side?
Speaker 2Sure, the basic thing is a SAS model where we'll get paid a monthly fee and then there's usage on top of that, you know, which is similar but different to how, like a core provider would do it.
Differentiating in the Banking Industry
Speaker 2Like the more you use our stuff, the more you pay, and we have a fee that we charge per Tech firm for fintech that the bank is partnering with. Often there are professional services that come with that. Sometimes there are, sometimes aren't, but it's common. Like for, let's say, a bank brings on a new fintech with our help and usually we help a lot during this process and they sign up the fintech and then the fintech needs to be implemented. Mostly these banks don't have the staff to do that, so they outsource that to us. We help with the implementation. I have a whole team that's dedicated just to doing this one part, the professional services problem. That works great, the tech firms happy, the banks happy, we're happy, and then that means that the tech firm can get up very quickly and in the industry we're by far the fastest ones to get someone from our banks and us together by far the fastest to get someone from they sign the contract to their production.
Speaker 3That's a good segue into the next question. What would you say differentiates you from your competitors?
Speaker 2Oh, there's so much, oh my gosh. Most of our competitors. I don't think they understand how banking works. It's just it's very confusing to even talk with them. The banking system is is complicated, especially in the US, like, if you count the credit unions like you're talking about, there's somewhere between 9 and 10,000 Financial decisions. It's just a lot. And there's multiple regulatory agencies. It is hard to navigate. It's confusing.
Speaker 2But one thing is that everybody has in common is that they really want the entire Money system and the economy to be safe and sound, and this is a serious thing and if you mess with that, everyone will have a bad day. The regular's come down to you, banks will get shut down, people will lose their jobs, fintechs will get shut down, and this is all very real. So how do we differ? We prevent all of that. What we do is we have a great relationship with the banks. We have a great relationship with the regulatory bodies. The fintechs come to us, are very safe.
Speaker 2Our tech is the best of the industry and that's how we're really different. This is all very high level and a very practical level. Our competitors treat the banks as a supplier, as a vendor. That doesn't matter, and for us, our banks are the main thing to get right, because you don't get that right, no tech firm wall to business with you. There's a technical mode we have also, which is we do these direct integrations to the core system, which other folks don't do, and that means they're always like they're doing settlements every week or every day or something. That just seems ridiculous to me.
Speaker 3Well, where do you see the industry heading? Obviously, you can answer that in terms of the banking side, as related to what you do. But where do you see it headed, say, maybe in the next three to five years?
Speaker 2Yeah, we're in this middle of this giant shakeout. I'm often put in this category, called banking as a service, right where there's and three. That's fine, that's a good name, but it's not what everyone else thinks it means anymore. To me, that means there's technology which allows you to access the bank through some tech, through an API. That's cool. There's a lot of folks to do this. We are seeing what is happening right now in that world is like one of these bathrooms one after another is going out of business, so one and after another is running out of money. There lives in all their clients, and how do I know this? Because I see them all coming to us like in a mad rush, all their Clients coming to us looking for a new home, and I think that's gonna shake out over the next couple years, and my guess is that of the existing players, is only one or two that are around three to five years from now.
Speaker 3Do you think that's just a nature of kind of the normal business curve of a lot of companies seeing opportunity, raise money and then there's always the one or two winners at the end?
Speaker 2I think it's more that I mean it's not wrong but I do think it's more that you had people come into this problem and looked at it like oh, this is like Amazon Web Services or this is like Twilio, where there is some just generic supplier out there who can do whatever I want and I'm just going to put a very nice API on top of them and I'm going to get all the customers.
Speaker 2And that is not how it works. That is not what banking is like, and you have to make sure that the banks are in charge here, because banking is complicated and if you mess it up it's not like you're going to get your hand slapped, your business will get shut down. We've seen this over and over again in the past year. So all these different banks have all these different problems, and why is that? A lot of them? It's because of the fintechs they're working with and they're not providing the proper oversight. That's the reason it's like, basically, the chickens are coming home to roost. The regulatory tours might be slow because they have a lot to do, but they are, for sure, going to protect the banking system, and that's what's happening right now, do you?
Speaker 3see more regulatory and compliance constraints coming, or are we sort of at that point we're already there?
Speaker 2No, we're still happening. I expect three, four more consent orders in the next couple of months and I expect more guidance from different regulators, the OCC, which is one of the regulators especially. I don't think it's going to slow down anytime soon. I mean for me. I'm happy about this because this is the world we're designed to live in, but it certainly makes it chaotic.
Speaker 3Well, I mean, if it's one of your differentiators and your value props, then it sounds like you're positioned in a very good place.
Speaker 2Yeah, for sure, I mean the thing that we start with is that we have this other company called Standard Treasury, which is different than Treasury Prime and that was selling a similar but different product to the money centers maybe the top every bank above 100 billion deposits. Our first client was Silicon Valley Bank and they ended up buying the whole company and so I ran a fintech group there. It has to be for a while and I saw everything good and bad that could happen just because that lens of being inside the bank and dealing with these big banks with these very complicated problems. And our conclusion my co-founder, Jim, and I was oh, this is actually really simple the banks win. The banks always win. The banks win on economics. The banks win on who sticks around, and if you position your company from that perspective, you'll be fine. If you pretend the banks don't matter, you are going to get slapped around.
Speaker 3So don't do. That Makes a lot of sense. So let's switch gears a little bit and talk about you. You mentioned a little bit about your career there, but, if you don't mind, walk us through your professional journey, up into your role there as the co-founder and CEO I went to school and thought, you know, my ultimate goal would be to become a physics professor at some mid-tier school.
Speaker 2That was like what I thought I'd be happiest with. I was in the middle of doing some research and machine learning. It was computational physics but still machine learning, and I did all these really cool fun problems and I like that. The cool fun problems were great. I solve the biggest machine learning problem for like a hot minute back in the day is like 25 years ago or something million years ago, and I like that. And then I had to move for personal reasons. I said, okay, before I start grad school, I'll work for a year, save some money in San Francisco and I found out something amazing. The job I got was a startup. I did not know what that word meant and I loved it. Once I was in the door, I'm like I'm never stopping this. This is what I like. I like the direct feedback, I like building the problem. I like figuring out what people actually need and building that, and I've done startup after startup since then.
Speaker 2The first one was a train wreck and they had no idea what they were doing and it was like an episode of like a TV show or a movie where it shows like everything wrong. It was looking Valley. It was fantastic. There was drug use, there was yelling matches, screaming fits, guards at the door to prevent the wrong person from coming in. It was fantastic. It sounds great, right and it's funny. I loved it. I didn't like the drama but I loved everything else and so I got another job at this company that was doing basically the opposite.
Speaker 2The first one was bleeding edge tech. This one was very understandable and I did that. I kind of learned what a startup was, and since then I've been found even writing my own. I'm usually the technical guy. Here Turns out that this problem is highly technical. So I feel very comfortable here in Treasury Prime and that's where I've been. I was accidentally introduced to banking because my friend needed some help and I was like semi retired at that point and I started to go oh wait, where's banking been all my life? I love banking, tell me more. And I've been doing that ever since.
Speaker 3And so you have a co-founder. So are you the technical guy and he's the operations guy, or how is that sort of split up?
Speaker 2No, it's terrible. We're both Uber technical nerds Like. We're both like these great programmers who can write enormous amounts of code, and that is not something that either of us do a lot anymore and like, well, it would be better maybe if I was the most amazing marketing person of all time, but sadly I am not right. I'm just some pretty good programmer.
Passions in Work and Beekeeping
Speaker 3Okay, great. Well, what are some things you're passionate about? So, maybe one work related passion and one personal passion.
Speaker 2Yeah, I mean the passion about work is I love the problem I'm working on. It's probably pretty clear. I love that. But I love the aspect of kind of the meta stuff about a startup. At some point it changes from your building the product to your building the company to build the product and I really enjoy that. I think that there's different ways to do it and you can try and all sorts of processes or approaches and for me it comes down to something pretty simple is that?
Speaker 2The thing that makes great startups work are just basically two things. One you got to choose the right problem. So if it's not growing or not doing anything, it's the wrong problem. And you have to have just truly amazing, great people, because things change every day. It's a lot of work. There's some can be a lot of emotions when things don't work out well and you have to have just the best possible people to work together and that really excites me, like finding the best people and getting to work with them. I very much enjoyed that. That's part of the was the lore of academia for me and like this checks all those boxes. What was the other one? On a personal note, yeah, personal side Well, you know I'm pretty happy boring person.
Speaker 2I married, got a kid, a dog, so I am a amateur beekeeper. I have four hives that I keep and you know it's not quite time, but almost time for you know, the next season to start and I love that these are like little versions of like me. They just like making stuff all day long. You know they're building their comb, they're going out there, they're doing the work and he comes out at the end it's great. So I've done 305 episodes.
Speaker 3You're my first beekeeper. That's good. So I mean I have to ask some follow on questions real quick about that. So sure, I mean obviously you have a passion for it. It's really cool. I mean I'm scared to death of bees, but that's OK. So what's the end product? Do you sell the honey or what do you do? No, I usually give it away to people.
Speaker 2You know it's the Christmas gift. You know the neighbors exchange stuff. Like my neighbor and I trade. She makes marmalade and I make honey. We trade it with each other. I have a decent amount of honey, you know, every season, but it always seems to disappear. People are always like oh, can I have some? Because it's honey and like it's people like honey Seems like that'd be a good employee gift. It is.
Speaker 2I don't have enough honey for that, though it's like because that's a lot of jars of honey and we're a remote company, so we have people in like Miami and New Hampshire and Hawaii and I'm like I'm terrified of shipping a bottle of honey glass bottle all that way. It's going to break, it's going to be a mess.
Speaker 3Got you. So one final question on the bees. So do you have a lot of land? I mean, you can't just like be living in a real small house with a tiny backyard and have four hives right?
Speaker 2I'm fortunate to have more land than you would think for where I live, but you can actually my buddies who have it on top of their apartment building their hives. Bees can go like three miles. So in San Francisco there's greenery all around and like there's big parks that the bees go to. They'll go long distances and then come back to their home. It does work. The only surprising thing about doing it on your apartment roof is honey is heavy and so you'll have to like make sure you reinforce the roof, because about four years ago I had someone at our bee club who their roof cave did because the honey got too heavy.
Speaker 3Well, never would have thought of that. Yes, neither, Great. Well, one final question. I think you'll have a neat perspective because of your startup kind of passion around that. But I always ask this because I think everyone kind of brings their own unique answer to it. If someone comes to you and they say, hey, Chris, I'm interested in payments, fintech, banking, kind of the financial services space and they want to build a career in this space Maybe they even want to, you know, job with your company and they say, hey, what do I need to do to be successful in this industry? What would you tell them?
Speaker 2There's different kinds of problems. A lot of the people I know who asked me this come from the AI, machine learning world and they built search engines and things like that. I've done that too, and the main difference here is that people really care about their money. They care about every penny, and so you have to get it right, and a lot of the things other product spaces do is more probabilistic. You just have to get mostly right. You don't have to get it exactly right, and the example is always I go to Google, I search for the thing. If the top two answers are good, I'm good. They don't have to be in a particular order, just as long as the top two or three are about right.
Speaker 2That's not true with money. You know. You said, hey, I bought a house and I'm going to send whatever it is. You know I'm sending a million dollars to buy the house and I only send 900,000. You're going to be pretty bad, right, and like you can't get the payment wrong. You just can't. That is the main thing to like. Change your attitude so that, like it's always done correctly, the people who don't do that, like I'm a competitor don't do that. I'm shocked at that, because you're going to get in trouble sooner or later, and they do, right?
Speaker 3Well, that makes a lot of sense. Well, chris, we've covered, obviously, a lot of ground about you and the company and the industry. Is there anything else you'd like to add before we wrap up the show?
Leaders in Payments Podcast Wrap-Up
Speaker 2I like to say that's I've been saying for a while here that I said this earlier If you're working in this area and you're doing something whether you're a bank or a tech company or you're a person who just can get into it realize that in the US, banks win. We have a lot of banks. We're not going to create a lot more banks. Probably the number will shrink. So, whatever you do, make sure that you treat the bank the right way. If you do that, you can get everything else to work. You can do all the rest, but if you ignore that hard part, it's impossible to get anything working.
Speaker 3Well, I think that's a great way to summarize the show and wrap up. So, chris, thank you so much for being on the show today. I know your time is very valuable, so I really appreciate you being here, my pleasure. Thank you so much, and to all you listeners out there, I thank you for your time as well, and until the next story.
Speaker 1Thank you for joining us this week on the Leaders in Payments podcast. Make sure you visit our website at leadersinpaymentscom, where you can subscribe to the show and where you'll find our show notes. Thanks for watching and if you enjoyed listening, please share on your social channels as well.