Editor’s Note — This article is sponsored by Qolo. As with all sponsored content in Fintech Takes, this article was written, edited, and published by me, Alex Johnson. I hope you enjoy it!
When Synapse collapsed in 2024, tens of thousands of customers discovered an uncomfortable truth about pooled For-Benefit-Of (FBO) accounts: they weren’t built for the world we live in now.
Banks were left wading through half-mapped spreadsheets, trying to verify whose money belonged to whom across multiple partner banks and FBO accounts. About $85 million in consumer deposits ended up frozen or stuck in limbo. It was, by any definition, a disaster.
Pooled FBO accounts are poorly suited for the kind of structured, multi-layered, complex value chains that now run through financial services.
And while it feels uncomfortable to say so, the implosion of Synapse was, in some ways, a blessing in disguise because it exposed just how far out of sync our infrastructure has become with the world we’ve built on top of it.
The value chains for money movement and fund storage have gotten infinitely more complex, and the infrastructure for managing them has not.
So the real question becomes: now that we see the gap clearly, what do we do about it?
The Complexity Is Everything Everywhere All At Once
The Synapse disaster helped us understand the shape of the problem — complex, multi-party relationships built on top of legacy systems and account structures — but it did not adequately illustrate the size of the problem.
BaaS and B2C fintech are highly visible parts of the financial services ecosystem, but they pale in both scope and complexity when stacked up against a less heralded part of the ecosystem: B2B.
Think about global trading relationships and multinational treasury operations. Think about enterprise payments and industrial supply chains. If you thought Synapse was the entire scope of the problem, think again.
The real issue is that our account infrastructure can’t keep pace with the complexity of how customers move money today. The pain from Synapse was felt acutely on the consumer side, but the stakes, scale, and fragility are much greater in B2B.
We may not realize it, because we haven’t seen anything on the B2B side recently blow up in quite the same spectacular way that Synapse blew up, but that doesn’t mean there aren’t real and damaging bottlenecks and inefficiencies in B2B payments and treasury management, caused by the same underlying problems:
Consider an auto-parts manufacturer with 120 subsidiaries that moves funds between entities daily for payroll, vendor payments, and intercompany transfers. Their treasury platform can’t reconcile quickly enough, so cash ends up sitting idle in the wrong places (because balances and ownership aren’t visible in real time).
Or a freight forwarder that manages payments across hundreds of vendors. If they receive balance updates too late in the day, their settlement decisions will be based on outdated data.
Or a large e-commerce marketplace that handles tens of millions of refunds a year. Each refund touches multiple bank accounts before being reconciled in a third-party system, producing weeks of backlog and well … very much avoidable costs.
In other words, the same structural weakness that surfaced in Synapse is alive and well in B2B, but amplified by volume and operational complexity.
If you’re a bank that wants to serve these companies (whether in payments, treasury, or embedded finance), you’ll need to solve for these structural weaknesses.
The good news is that after years of patchwork fixes (slow, manual reconciliation, fragile middleware, nightly file transfers, etc.), the industry is converging on a clear answer.
The Fix: Virtual Account Management (VAM)
Virtual Account Management (VAM) isn’t a new product. It’s the missing infrastructure layer that gives banks, fintechs, treasurers, and auditors a real-time, unified view of where every dollar actually sits.
VAM maps every internal balance, client allocation, business unit, and use-case down to the cent, in real time, with full auditability. One clear ledger instead of half-mapped spreadsheets.
Regulators now expect banks to be able to trace, segment, and audit every program they support. Compliance might be the reason why banks adopt VAM, but growth will be the reason why they keep it.
VAM delivers a programmable foundation to build on so that banks can support embedded finance and complex B2B treasury management use cases for clients, enabling smaller financial institutions to outkick their coverage and compete for business that would otherwise be out of reach.
According to McKinsey, treasury fee income accounts for about 40% of a commercial bank’s non-interest revenue, yet many banks still send their best clients to third-party platforms for reconciliation or cash management. With VAM, those capabilities (and those valuable client relationships) stay in-house.
For enterprise companies (and the fintech companies that serve them), the payoff is identical: real-time proof.
Boards, auditors, and investors need to know if every transaction, balance, and client fund is always already accounted for to the cent, all the time. Clients need the same, because nobody can run a modern business on delayed data.
Visibility equals credibility, and credibility drives enterprise value.
Banks are being pulled toward VAM by regulation. Fintech companies are being pulled toward it by necessity. And more generally, vertical SaaS and B2B platforms are demanding this level of automation and reconciliation across all payment rails.
Eventually, everyone will end up on the same ledger.
You can already see that shift underway. Qolo’s Quantum Ledger and VAM architecture are built around the same principle: a single, bank-grade layer that gives all sides transparency and control without forcing anyone to rebuild from scratch.
The financial system is moving toward a model of real-time, auditable proof.
The future of financial infrastructure won’t be defined by who moves fastest (faster payment rails are coming and will eventually be ubiquitous, no matter what we do), but by who can see, segment, and secure every dollar as it moves. Virtual Account Management is simply the operating model for that world.
In the end, VAM closes the gap that’s always existed between where money is and where we think it is: the gap between trust and proof.
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