Our Top Reads of 2022

2022 has been a year of growth at Modern Treasury; some of our learnings were hypotheses proven right with quick wins, others were lessons we learned the hard way—there is no growth without growing pains. Personally, the year was life-changing—when we posted last year’s reading list, I had just begun my maternity leave. When I got back to the office in April, our team had nearly doubled in size. And with all that change, one of the cornerstones of maintaining our culture has been reading; our #stuff-to-read (and its offshoot, #stuff-to-listen-to) Slack channel bridges the business lines as we share the latest and greatest news, blogs, tweets, and more from the industry. Here’s a list of the team’s favorites from the year.

What We Read (And Listened To)

We noticed a few themes that continue to widen the aperture of traditional financial services:

• Buy Now, Pay Later (BNPL) remained top of mind. The CFPB did a deep dive on the market trends and consumer impacts. While some effects can be negative, there are ways in which this new type of lending augments multiple industries—The New York Times’ “Marry Now, Pay Later” looks at how customers like Carats and Cake are transforming the multimillion dollar wedding industry. Other notable examples include Apple’s new Pay Later system and B2B use cases for BNPL.
• Gartner asserted that Banking-as-a-Service (BaaS) will hit mainstream adoption in 2 years, possibly because the rollout of cloud-based infrastructure among traditional banks has been slow (albeit inevitable). Meanwhile, Steve Cocheo at The Financial Brand asked, “Can Banks Beat Neobanks At Their Own Game?” He posits that traditional banks can remain competitive by partnering with fintechs on a neobank strategy: “the traditional neobank.”
• Bain took a look at “Embedded Finance: What it Takes to Prosper in the New Value Chain.” With more companies incorporating payments into their products, Sapphire leaders predict that the next generation of CFOs will have to rely on more finance tech to manage their workflows.
• When the Fed announced the timeline for FedNow, many experts shared the sentiments of our CTO and Co-Founder, Sam Aarons: this new rail could be the United States’ faster payments success story. Among those who see FedNow’s potential are Andreesen Horowitz’s (a16z) Seema Amble, Santiago Rodriguez, and Alex Immerman, whose article, “Paradise FedNow? How the 2023 Payments Network Will Improve Real-Time Payments,” lays out lessons from Brazil’s PIX, the fastest growing national RTP system.

These articles didn’t just pinpoint the trends within the industry, but illuminated the need for fintech infrastructure to help power these trends. From the a16z piece:

“Even if the rails are built, applications still need a way to connect to the rails…An infrastructure layer is also needed to connect apps and services to send the payments over the rails: the so-called ‘last mile.’”

Macroeconomic trends have also influenced many think-pieces about what the future holds for finance infra companies. In his weekly newsletter, Fintech Brain Food, Simon Taylor “ranted” about “The Future of B2B Fintech” in a changing market. In his outline of business models and their sustainability, he suggests (and we agree) that there are large opportunities for companies who make money movement “developer first and Finance Ops friendly.” Coatue’s whitepaper asks, “Fintech and the Pursuit of the Prize: Who Stands to Win Over the Next Decade?” and B2B-focused companies seem to have a large tailwind.

We were also impressed with podcast content across the industry. Business Breakdowns’ podcast episode, “Goldman Sachs: Fortune Favors the Old,” looks at how banks make money broadly, and Goldman’s new business lines specifically. In the World of DaaS episode, “Jason Gardner: Modernizing the Payments System,” Gardner, the founder of Marqeta, shares a breakdown of the global payments system. Other podcasts featured some of our favorite coffee break guests:

• In Invest Like the Best, Ravi Gupta discusses how the best businesses keep the “main thing” top of mind.
• On one of the team’s favorite podcasts, Acquired, Brad Gerstner, founder of Altimeter Capital, chats about his firm’s genesis and investing in great companies. (I would be remiss if I didn’t also highlight The Benchmark Dinner episode, where the Acquired guys let us be a fly on the wall during one of Benchmark’s famed weekly dinners with all 5 GPs).

Finally, given the pace at which our team and company grew, we inevitably hit speed bumps. As we course correct, we take notes from “Thin Platforms” about how building composable architecture can help us future-proof. We look at growth lessons from Monzo, and try to understand what goes into designing better APIs. We seek the wisdom of experts like Deb Liu, who teaches about dogfooding and customer empathy, and Ayo Omojola who covers the competitive advantages of “time-to-money” and bank portability. Our sustainability as a company not only depends on (to make a sports analogy) the depth of our bench—and we have an incredible bench—but also how we can capitalize on our strengths, and bring rigor to areas where we can grow.

What We Wrote‍ (And Said)

2022 was also a prolific writing year for us. Here are the five posts that received the most feedback, Twitter love, and comments from our customers and community:

1. Don’t Leave Money on the Table: Why Banks Should Partner with Fintechs, a look at the mutual benefits that banks and fintechs reap when they partner.
2. How Risky is Sitting in the Flow of Funds?, a primer focused on funds flow models and the risks and benefits associated with sitting “in” the flow of funds.
3. Accounting for Developers, a three-part, in-depth series, exploring the basics of finance from a technical perspective.
4. What are Third-Party Payments and Why Do They Matter?, a look at the growing realm of embedded finance and how it’s changing the way companies move money.
5. Real-Time Payments, A Generational Shift, a broad primer on faster payments and how new instant payment rails change the way we think about money movement.

Honorable mentions include the recent Journal series, “The Recon Diaries” about the issues that arise within reconciliation (Part 2 dropped this week), and our second annual report, The State of Payment Operations 2022, conducted with The Harris Poll.

Additionally, we’ve put out and participated in some notable articles, podcasts, and webinars, including:

• “Building Generational Companies in Uncertain Times,” a webinar with SVB, SVB Capital, Gunderson Dettmer, Silo, and Carats and Cake.

• “Embedded Payments: ACH’s Next Frontier,” a webinar with Nacha and Goldman Sachs TxB.
• The Fintech One-on-One podcast with Co-founder and CEO, Dimitri Dadiomov, where he chats through Modern Treasury’s evolving platform.
• Our most recent PYMNTS.com fireside chats. In one, Co-founder and CTO, Sam Aarons discusses FedNow’s potential to change money movement in the US; in another, Product Manager of Ledgers, Koji Murase explains the need for real-time data and analytics to help companies make better financial decisions.

You can also check out our Newsroom to read (and hear) about what we’ve been up to this year.

As always, we wish you all a restful and well-read holiday season. Thanks for coming along for the journey, and we look forward to putting out more great content for you in 2023.