Spencer Tierney

To help us answer Jocelyn's question, on this episode of the podcast, we are joined by NerdWallet banking writer Spencer Tierney. Spencer has been covering banking at NerdWallet for nearly 10 years and has written countless reviews of banking products, so he is just the guy to talk with about your question, Jocelyn. Spencer, welcome back to Smart Money. Great to be back, Sean.

To help us answer Jocelyn's question, on this episode of the podcast, we are joined by NerdWallet banking writer Spencer Tierney. Spencer has been covering banking at NerdWallet for nearly 10 years and has written countless reviews of banking products, so he is just the guy to talk with about your question, Jocelyn. Spencer, welcome back to Smart Money. Great to be back, Sean.

To help us answer Jocelyn's question, on this episode of the podcast, we are joined by NerdWallet banking writer Spencer Tierney. Spencer has been covering banking at NerdWallet for nearly 10 years and has written countless reviews of banking products, so he is just the guy to talk with about your question, Jocelyn. Spencer, welcome back to Smart Money. Great to be back, Sean.

So let's start by giving our listeners a quick recap of the banking drama Jocelyn mentions in her question. It's a little complicated, but I'll try to keep this brief and hopefully easy to understand. Essentially, a company called Synapse Financial Technologies, which operated banking software for some neobanks, filed for bankruptcy earlier this year.

So let's start by giving our listeners a quick recap of the banking drama Jocelyn mentions in her question. It's a little complicated, but I'll try to keep this brief and hopefully easy to understand. Essentially, a company called Synapse Financial Technologies, which operated banking software for some neobanks, filed for bankruptcy earlier this year.

So let's start by giving our listeners a quick recap of the banking drama Jocelyn mentions in her question. It's a little complicated, but I'll try to keep this brief and hopefully easy to understand. Essentially, a company called Synapse Financial Technologies, which operated banking software for some neobanks, filed for bankruptcy earlier this year.

Synapse, which partnered directly with banks to store neobank customers' money, didn't keep accurate records of the neobank customers' accounts. As a result, the banks which hold customer money on behalf of the neobanks don't know whose money is whose.

Synapse, which partnered directly with banks to store neobank customers' money, didn't keep accurate records of the neobank customers' accounts. As a result, the banks which hold customer money on behalf of the neobanks don't know whose money is whose.

Synapse, which partnered directly with banks to store neobank customers' money, didn't keep accurate records of the neobank customers' accounts. As a result, the banks which hold customer money on behalf of the neobanks don't know whose money is whose.

So people who deposited money at some of these neobanks have been unable to access their money for months now, and it's unclear how they'll get their money back. Many people who use these neobanks assume that they were covered by FDIC insurance, like banks are, when in reality, these neobanks only had FDIC coverage through the banks that they partnered with.

So people who deposited money at some of these neobanks have been unable to access their money for months now, and it's unclear how they'll get their money back. Many people who use these neobanks assume that they were covered by FDIC insurance, like banks are, when in reality, these neobanks only had FDIC coverage through the banks that they partnered with.

So people who deposited money at some of these neobanks have been unable to access their money for months now, and it's unclear how they'll get their money back. Many people who use these neobanks assume that they were covered by FDIC insurance, like banks are, when in reality, these neobanks only had FDIC coverage through the banks that they partnered with.

That has led to some well-warranted fear about new online banking services. Anything I'm missing there, Spencer?

That has led to some well-warranted fear about new online banking services. Anything I'm missing there, Spencer?

That has led to some well-warranted fear about new online banking services. Anything I'm missing there, Spencer?

That's an excellent summary, Sean. I'll just add that this devastating domino effect that Synapse's collapse caused has affected only a subset of these so-called neobanks and their customers. Many neobanks partner with banks directly and don't use Synapse or other similar banking software.

That's an excellent summary, Sean. I'll just add that this devastating domino effect that Synapse's collapse caused has affected only a subset of these so-called neobanks and their customers. Many neobanks partner with banks directly and don't use Synapse or other similar banking software.

That's an excellent summary, Sean. I'll just add that this devastating domino effect that Synapse's collapse caused has affected only a subset of these so-called neobanks and their customers. Many neobanks partner with banks directly and don't use Synapse or other similar banking software.

However, what this disaster has brought to light is that any neobank or other non-bank entity that provides consumer banking has more risks than banks do.

However, what this disaster has brought to light is that any neobank or other non-bank entity that provides consumer banking has more risks than banks do.