The Rise of Fintech Innovators in Banking: Lessons for Government Contractors and Project Managers

In the dynamic world of financial technology, recent headlines about Stripe’s first employee Darragh Buckley—founder of fintech startup Increase—highlight a growing trend: fintech startups moving aggressively into traditional banking territory. Buckley has reportedly taken significant steps toward owning a bank, raising industry eyebrows and drawing opposition from competitors. This bold move might seem far removed from the realm of government contracting and project management, but it offers relevant insights for public-sector professionals: innovation, disruption, and the increasingly blurred lines between technology providers and regulatory institutions.

Understanding the Fintech-Banking Convergence

The Mechanics of Buying or Chartering Banks

In the U.S., acquiring a bank is a highly regulated process involving approvals from the Federal Reserve, Office of the Comptroller of the Currency (OCC), and possibly state banking authorities. Fintech companies like Increase have been exploring this route not just to offer embedded financial services, but to eliminate reliance on traditional banks, thereby gaining control of compliance, risk management, and customer experiences.

Why Fintech Startups Want to “Own” a Bank

From a strategic standpoint, owning a bank enables:
– Lower payment processing and transaction fees
– Direct access to the Federal Reserve’s payment rails
– Enhanced compliance capabilities
– Greater trust with institutional and government clients

For example, Increase is building APIs that allow businesses to interact directly with the U.S. banking infrastructure. Bringing that in-house through bank ownership would allow tighter integration, improved security, and cost advantages.

Implications for Government Contractors and Project Managers

Vendor Risk and Innovation Trends

Federal and Maryland state agencies often partner with banking institutions and fintech vendors for disbursement, grant administration, and procurement payments. As fintechs become banks—or own parts of them—the traditional due diligence process changes. Contractors must evaluate:
– Charter status
– Regulatory compliance (FDIC, OCC, SEC)
– Cybersecurity readiness
– Disaster recovery and continuity plans

Project managers should integrate these evolving risks into their stakeholder communications and governance strategies. A fintech that looks like a tech startup today might be trading under a national bank charter tomorrow.

Procurement and Compliance Challenges

While fintechs promise greater efficiency and modernization of payment and workflow systems, especially for government programs like SNAP, TANF, or defense logistics, their moves into banking introduce overlapping jurisdictions. Maryland contractors should watch closely how the Maryland Department of Budget and Management and the State Treasurer’s Office may respond to fintech-bank hybrids when awarding contracts.

Project managers relying on Agile or hybrid methodologies must allocate buffer time in their WBS (work breakdown structure) for compliance reviews and security audits, especially when engaging with these emerging vendors.

What Can Public-Sector Professionals Learn from Increase’s Ambitions?

Anticipate Industry Disruption

Whether you’re managing a federal R&D grant or procuring payment services for a county-level program, you need to anticipate how partnerships will evolve. Increase’s move is a sign of sector-wide change: financial institutions are no longer the only ones delivering transaction infrastructure at scale.

Focus on Vendor Review and Integration Planning

Understanding how vendors operate internally—particularly fintechs that become banks—is essential. Contractors should build stronger pre-award evaluation tools that account for:
– Financial solvency of the vendor/bank hybrid
– Charters and licenses obtained or in progress
– Alignment between vendor services and state audit standards

This is especially important under the FAR (Federal Acquisition Regulation) and Maryland’s COMAR Title 21 regulatory frameworks.

Conclusion: Watching the Fintech Frontier

The trajectory of companies like Increase has ripple effects well beyond Silicon Valley. Fintech disruption in banking directly influences how federal and state governments conduct secure, fast, and compliant transactions. For contractors and project managers, this trend underscores the importance of adaptable procurement strategies, rigorous vendor assessments, and up-to-date project risk frameworks. As the regulatory lines continue to blur, staying informed about key players and shifts in the financial services landscape is not just smart—it’s critical for continued success in public-sector operations.

Stay tuned for our next update on how fintech innovations are influencing GSA payment modernization initiatives and what this means for future Blanket Purchase Agreements (BPAs) under the new Polaris procurement model.#FintechInnovation #BankingDisruption #GovernmentContracting #ProjectManagementTrends #RegTech