Banking-as-a-Service gets talked about constantly, but very few people have built it, and almost no one has built it twice. Host Amber Buker, Chief Research Officer at Travillian, sits down with Patrick Slain, VP, Director of Fintech and Interim Director of Information Security for Stearns Bank, a roughly $3.3 billion asset institution in Minnesota, who has stood up BaaS programs at two separate banks.
In this episode, Patrick gets specific on:
- How long it takes to build a BaaS program, and why it’s a 6 to 7-year game
- Keeping the business aligned with your bank’s strategy and risk posture
- What a strong fintech partner looks like, and the red flags that end a conversation early
- How the loudest industry debates — from stablecoins to tokenized deposits — are missing what customers care about most
Listen Here: Spotify | Apple Podcasts
Connect With Amber
Thinking about Banking-as-a-Service, embedded finance, or how to position your bank in this space? Amber lives in this world every day as Chief Research Officer at Travillian, and she would love to hear from you. Reach out to Amber directly to continue the conversation: abuker@travilliangroup.com.
One more reason to get in touch: In this episode, Amber teased a special project Travillian is releasing later this summer: a first-of-its kind compensation benchmark for partner banks. Unlike traditional comp studies that focus asset size and geographic peers, this project helps innovative banks compare themselves to institutions with similarly situated business models. It includes breakdowns on what roles to hire first, how to structure the team, where pay philosophy is creating paradoxes within hiring practices, and more. If you want an early look at that compensation study when it drops, connect with Amber now and let her know you are interested.
Why Building a BaaS Program Is a Six-Year Game, Not a Three-Month Win
00:00 | Welcome to Travillian Next
Amber introduces the show and today’s topic, Banking-as-a-Service. She welcomes Patrick Slain of Stearns Bank, a rare operator who has built BaaS more than once, and previews what the conversation will cover.
01:07 | Meet Patrick Slain
Quick hellos from a sunny Tulsa. Amber highlights what makes Patrick unusual: he has stood up Banking-as-a-Service at two separate institutions in a young, small sector where experience is hard to find.
01:58 | Happenstance and the White Space
Patrick shares how he fell into the space around 2021, when a prior bank asked him to find the white space and take a greenfield approach. That search led him and his team to Banking-as-a-Service and embedded finance.
03:36 | Re-Architecting BaaS at Stearns
After about four years building that first program, Patrick got the call from Stearns, which wanted to mature its existing fintech division. His mandate: realign the business to the bank’s risk posture and restructure programs around its strategic goals.
04:19 | Why BaaS, and the Flexibility Lever
Deposit generation was a driver, but Patrick says the real appeal was flexibility. He describes a lever diagram showing how BaaS lets a bank flex across deposits, payments, and lending, and decide what to keep on or off balance sheet.
05:51 | The Timeline Nobody Wants to Hear
Patrick gets specific on time. Expect 6 to 12 months to launch with experienced help, or 12 to 24 doing it yourself, then a deliberate onboarding pace. All in, he pegs a truly mature business at 6 to 7 years.
07:09 | Inheriting an Existing Program
Amber asks what it was like to take over an existing program. Patrick credits strong leadership and describes running a deliberately simple business built on proven products like business deposits, payments, and cards.
08:17 | Culture and the Employee Owner Mindset
Patrick ties Stearns’ values, tenacious pursuit of excellence, trailblazing creativity, and urgency, to how fintech has to run. As employee owners through an ESOP, the team shares an ownership mentality that fits the pace of the business.
09:38 | Room for Everyone, and a Comp Study Teaser
Patrick notes there is plenty of opportunity for banks to work together. Amber previews a Travillian compensation study coming later this summer, including one bank whose strategy is to be the intentional number two, or backup, partner bank.
10:51 | Why Business Deposits, Not Consumer
Patrick explains the efficiency case for focusing on business deposits and payments. Consumer regulation adds cost and complexity, while stacking similar business programs lets the bank build expertise and pass efficiencies to partners.
12:04 | Not Rocket Science: Same Bank, Different Channels
Patrick lays out his core thesis: BaaS should be the same thing the bank already does, just delivered through different distribution channels. The goal is to avoid building separate operational or BSA structures outside the bank’s core competency.
13:06 | Making “Simple” Make Sense
Amber pushes on the word simple. Patrick reframes it: the work gets simpler when you know your lane and stay inside your core competency. Most banks struggle because they do not decide what they want to be, so they chase any deposit that walks in.
14:27 | Operating Models: Shared Services vs. Standalone
Amber outlines the two models she sees: a shared services approach versus a standalone, separately branded division. She asks which one Patrick chose and how he weighs the tradeoffs.
15:08 | How Stearns Structured It
Patrick split operations from relationship management and stood up dedicated BSA, compliance, and risk resources. He favors a shared service model because it aids continuity and lets insights, like fraud trends, flow both ways between fintech and the core bank.
17:57 | Green Flags and Red Flags in a Program
Patrick describes what he wants: an established program with history and real compliance expertise on staff. The red flags are founders who do not understand a regulated space, and the chicken and egg pitch of needing a bank before they can raise funding.
20:19 | How Standards Matured After the Consent Orders
Amber notes that fintech financials are unfamiliar territory for many bankers. Both point to the 2022 to 2024 consent order wave, after which banks raised capital requirements and began asking to see 18 months of runway.
21:08 | Stearns’ Value Proposition to Fintechs
Patrick wants Stearns to be the bank of choice for mid market fintechs that never have to worry about the bank on the back end. He argues reputation in this space is built within the fintech industry, not at the consumer level.
22:27 | Getting the Word Out, and Deal Flow Discipline
Patrick relies on relationships and referrals, including partnerships with Synctera and Lithic, and caps onboarding at roughly 10 to 15 deals a year. He would rather give a fast no on a call than drag a bad fit through weeks of email.
23:56 | The Gryffindor: Only What Makes You Stronger
Amber frames his screening as Harry Potter’s Gryffindor, taking only what makes you stronger. Patrick agrees every deal has to be mutually beneficial and accretive, with real shared alignment before onboarding.
24:34 | Hot Take: Stablecoins and Tokenized Deposits
Patrick offers a hot take: banks recreated the stablecoin idea as tokenized deposits to solve their own problem. He argues customers do not care about the label; they care whether their money arrives on time, affordably, and safely.
26:06 | Wrap Up
Amber thanks Patrick for a practical, insightful conversation, and he thanks her for having him on.
For more conversations like this one, visit our BaaS section.
