Plaid co-founder William Hockey has taken the wraps off his new venture, a bank he is running with his wife that is built specifically to help developers creating financial products.
Hockey left his role as Plaid CTO in 2019 and has spent the past three years as co-CEO with wife Annie building nationally chartered "infrastructure bank" Column.
Column says that, until now, new financial companies had to work through expensive middleware providers that wrapped legacy sponsor banks. These relied upon outdated and limiting core systems.
The Hockeys' paid $50 million for Northern California National Bank, securing a national bank charter, and then built their own core, ledger, and data model to make it easy for fintechs to roll out their own products.
On its website, the bank lists products such as ACH, book transfers, loan origination, card programmes and debt financing among its offering.
Writes William Hockey in a blog: "I spent time with (literally) thousands of companies building in financial services and it was painfully obvious that the biggest bottleneck to their growth and innovation was the underlying banks and middleware they relied on."
He continues: "We were always told that banks can't be software companies, and until right now they have not been. We’ve built our own core, have a direct connection to the Federal Reserve, a robust balance sheet and a maniacal developer focus."
Column is already working with several fintech giants, including corporate card unicorn Brex, digital banking player Oxygen, and his old firm Plaid. Now it is opening up to everyone.
Hockey, who still has a stake valued at more than $1 billion in Plaid, says Column is 100% founder and employee owned, funded with its own money and profits.
He explains: "If something goes wrong, we take 100% of the risk - there’s nobody else to fall back on. If we add more stakeholders into that mix, incentives get perverse and we can’t do the best job for you."