Bank Nerd Corner dives deep into Cornell Law Professor Dan Awrey's new paper, “Banking, Technology, and Instability,” and welcomes guest discussant Jason Mikula, an independent journalist who wrote a book on the topic and publishes the Fintech Business Weekly newsletter.

Dan and Jason discuss how they framed and conceptualized the banking as a service business model and why that matters.

Dan says banking as a service inverts the traditional outsourcing model; today's consumer knows their app and has no idea whether there is a bank behind it at all.

In his book, Jason characterized the same phenomenon as a disaggregation of the banking value chain, focusing on how revenue and function are divided among fintechs, middleware providers and partner banks.

They explore the regulatory response to BaaS, including what regulators don’t understand, why the interagency third-party risk management guidance mostly missed the point and the policy proposals that Dan has suggested that will never happen.

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