Banking Charter Secured via Twin City Acquisition

San Francisco-based fintech Increase has secured a banking charter by acquiring Twin City Bank, aiming to replace traditional middleware models with direct access to core infrastructure. Founded by early Stripe alumnus Darragh Buckley, the company has long provided the financial infrastructure for platforms like Ramp and Stripe, moving, storing, and lending hundreds of billions of dollars. Following a voting share acquisition last year, Buckley has officially taken over the Washington State-based lender, transitioning Increase into a fully chartered bank. This structural change alters how financial infrastructure providers manage operational and cyber risks at scale.

Standard commercial banking systems were never built for API-first architecture, creating a known gap between software development speeds and the rigidity of legacy banking infrastructure. While traditional partner bank models rely on middleware wrappers to connect modern software to legacy systems, this multi-layered approach introduces systemic vulnerabilities. Developers often face latency and data synchronisation issues where asynchronous processing between API layers and legacy core banking software leads to balance discrepancies and reconciliation errors. Security surface area also expands as integrating multiple third-party intermediaries to process payments and manage accounts widens the attack surface for data breaches and API abuse.

By owning both the underlying banking charter and the core infrastructure software, Increase bypasses standard middleware reliance altogether. This structural shift gives developer teams direct access to primary rails without sacrificing engineering depth or architectural transparency. For developers working within the industry, the move offers a compelling alternative to the fragmented approach of the past. Rather than stitching together disparate systems and hoping for real-time consistency, teams can now work with a unified environment where the code interacts directly with the ledger, significantly reducing the complexity of maintaining data integrity across high-volume transaction streams.

The acquisition of Twin City Bank represents a broader trend of fintech infrastructure providers acquiring regulated bank charters to control their end-to-end technology stacks. The structural shift from traditional middleware architectures to a vertically integrated stack alters the operational setting significantly. In the old model, a fintech app would route through an API wrapper or middleware before hitting a legacy core or partner bank. In the new model, the fintech app connects via a direct native API to a unified core infrastructure and a chartered bank. This change moves from asynchronous batch updates with a risk of state mismatches to real-time, single-source-of-truth native ledgering.

From a risk management perspective, verticalizing the banking stack changes several operational trends. Consolidating banking capabilities and technical infrastructure under a single entity simplifies audit trails, security validations, and continuous compliance controls. Fintechs processing payments typically undergo complex vendor risk assessments for every banking partner and middleware provider in their flow. This consolidation reduces the need for multi-vendor assessment, creating a consolidated risk surface and a single audit boundary. Legacy core software often relies on batch processing for fraud detection and AML compliance, but an infrastructure-first chartered bank allows engineering teams to deploy real-time monitoring directly at the API layer, catching suspicious transactions or automated payload tampering before settlements are finalized.

Direct oversight under primary banking regulatory frameworks like the US OCC/FDIC or UK FCA frameworks replaces fragmented compliance responsibilities split across third-party layers. By controlling the charter, developers can programmatically interact with real-time gross settlement (RTGS) networks, FedNow, ACH, and wire transfers via direct, low-latency APIs. This eliminates intermediary translation layers, significantly decreasing API timeout risks and ledger mismatch anomalies during high-volume processing events.