Column's Bank-Software Hybrid: A Blueprint for Disrupting Traditional Banking Infrastructure

The financial technology sector is undergoing a seismic shift, driven by startups like Column that are reimagining how banks and software interact. Unlike traditional banking models, where fintechs rely on outdated infrastructure or third-party middleware, Column's vertically integrated approach—combining its own national bank charter with proprietary technology—has positioned it as a critical enabler for high-growth fintechs. This model isn't just a tactical advantage; it's a structural disruptor that could reshape the $66 billion embedded finance market. Here's why investors should pay close attention.

The Pain Points Column Solves

Traditional banking infrastructure is a labyrinth of legacy systems and fragmented partnerships. Fintechs like Brex or Carta historically had to navigate sponsor banks (e.g., Evolve Bank & Trust) and middleware providers (e.g., Unit, Synctera) to build products like credit cards or lending platforms. This created two major issues: costly inefficiencies and slow innovation. Middleware layers added technical debt, while sponsor banks often prioritized compliance over agility.

Column's integration model eliminates these roadblocks. By owning both the banking charter and the technology stack, it acts as a “developer infrastructure bank,” allowing partners to build financial products as code. For example:
- Brex, a $300M+ revenue fintech, uses Column to manage corporate credit cards and loans without relying on middleware.
- Mercury, which hit $500M in annualized revenue in 2024, leveraged Column's APIs to process over $156B in transactions last year alone.

The result? Fintechs save on operational costs, accelerate product launches, and retain full control over their user experience—a critical edge in a competitive market.

Revenue Streams: Scalable and Diversified

Column's financials underscore its model's viability. In 2024, revenue surged to $55.1M, a 126% year-over-year jump, with growth split evenly between interest income ($28M) and non-interest fees ($27M). This diversification is key:
- Interest on deposits: Grows as partners like Carta and Brex scale their customer bases.
- Interchange fees and usage charges: Rise with transaction volumes, which are buoyed by partnerships with high-growth platforms.

The chart above would show Column's exponential growth outpacing Evolve's flatlining revenue, highlighting the structural advantages of its integration model.

Why This Model Scales

Column's infrastructure is designed for exponential growth. Its direct Federal Reserve connections and API-first architecture eliminate latency, while its compliance engine handles regulatory burdens for partners. This creates a flywheel effect:
1. Partners grow: Brex's 48% revenue increase in 2023 → more transactions → higher fees for Column.
2. New services: Column's planned expansion into lending-as-a-service and treasury tools opens new revenue streams.
3. Partnership selectivity: By focusing on “blue-chip” fintechs, Column avoids diluting its platform with low-margin clients.

Risks and the Regulatory Wildcard

No disruptor is without risks. Column's reliance on major partners like Brex and Mercury creates concentration risk—a collapse in one could hurt its top line. Additionally, regulatory scrutiny of fintech-bank partnerships is rising. The OCC's recent guidance on bank service company rules could force Column to adjust its model.

Yet Column's founder-owned structure allows it to prioritize long-term growth over short-term pressures. And with embedded finance adoption accelerating—driven by real-time payments and AI-driven tools—the tailwinds are strong.

Investment Thesis

For investors, Column represents a play on the future of banking infrastructure. Its model isn't just a niche solution; it's a scalable blueprint for how tech-native banks will compete in the 2020s. While not publicly traded yet, its trajectory suggests it could be a prime acquisition target for a fintech unicorn or a standalone IPO candidate in the next 18–24 months.

Investors should watch:
- Partnership expansions (e.g., new clients beyond Brex/Carta).
- Margins as interest rates evolve (non-interest revenue is more stable).
- Regulatory developments impacting BaaS (Banking-as-a-Service) models.

In a sector crowded with me-too apps, Column's integration model is a rare example of foundational innovation. This isn't just a fintech story—it's a blueprint for how software will eat banking next.

Disclosure: The author holds no positions in Column or its partners.