Capital One absorbing Brex is a great example of how banks are bringing the balance sheet back in-house.
getty
For most of the last decade, fintech liked to pretend the balance sheet was optional. You could build beautiful software, acquire customers cheaply (until you couldn’t), and “partner” your way around the messy parts like funding, liquidity, capital, and regulatory accountability. Banks, for their part, were happy to play utility: hold the deposits, originate the loans, rent out the charter, and collect fees while fintechs got the headlines.
That era is ending. Over the past week, you can see the shift in plain sight as banks are pulling fintech capabilities and customer relationships back onto the bank balance sheet, where funding advantages, risk governance, and distribution economics actually compound.
The cleanest example is Capital One’s $5.15 billion agreement to acquire Brex. Brex is a corporate cards and spend-management fintech with meaningful commercial deposits and a strong tech-forward customer base. By purchasing the fintech, Capital One buys product, behavior, cashflow, and most importantly, ownership of the whole value chain.
That deal matters because it’s a signal.
What Changed: Three Forces Pulling Fintech Back To The Balance Sheet
1) Funding isn’t “free” anymore and banks still have the structural edge
Higher-for-longer rate dynamics have forced everyone to remember an old banking truth: cost of funds is strategy. Banks that can attract and retain deposits, especially operating and transaction balances, can price credit, invest in product, and survive downturns in ways that fee-only or wholesale-funded models can’t.
You can hear it in bank commentary and research this week emphasizing balance-sheet remixing and funding-cost dynamics as a key driver of margins. And you can see it in how deals are being framed: Brex’s commercial deposits are central to the strategic logic investors are debating.
2) The “BaaS era” taught banks that fintech deposits can be correlated, and contagious
Banking-as-a-Service brought fee income and deposit growth, but also introduced a new kind of fragility: fintech program deposits can move fast and in sync for reasons unrelated to a bank’s own credit quality.
This is why balance sheet strategy is now being discussed as a resilience problem for sponsor banks – managing concentration, liquidity backstops, and examiner confidence, rather than purely a growth story.
And it’s why regulators have been steadily raising the bar on third-party oversight. The FDIC’s third-party relationships guidance is explicit that outsourcing does not outsource responsibility. The interagency statement on bank arrangements with third parties (deposits and related services) puts a similar emphasis on risk identification and management across these partnerships.
Translation: if the risk sits on the bank, the bank increasingly wants the economics and control that justify that risk—and that means pulling more of the stack in-house or under tighter ownership.
3) Political and regulatory shocks are re-pricing consumer credit economics
This week’s renewed push around a 10% credit card interest rate cap is a reminder that, despite being around for ages, consumer credit is not certain. Reports that major banks are considering product responses (new cards structured to comply) underline how quickly the economics of lending can be reframed by policy—even if implementation is uncertain.
This matters for fintech because it accelerates a bank instinct: own the balance sheet, own the optionality. If pricing, rewards, and underwriting must be redesigned under political pressure, banks prefer to be the decision-maker rather than a silent partner.
One reason earnings calls remain useful is that they reveal what management teams are optimizing for. JPMorgan’s recent commentary highlights the linkage between deposit balances, net interest income, and capital metrics—i.e., the basic levers of balance-sheet-driven strategy.
Even when fintech is “in the room,” the conversation is increasingly routed through capital, liquidity, and distribution math.
What This Means For Fintech: The Market Is Splitting Into Two Camps
Camp A: Fintechs that become bank-owned capabilities
Capital One/Brex is the archetype: fintech becomes a product engine and customer wedge that a bank can industrialize on its balance sheet—especially in corporate spend, cards, and payments where the deposit-credit loop is powerful.
Expect more of this in:
- Commercial cards & spend (sticky operating balances)
- SME payments & invoicing (cashflow visibility)
- Treasury & liquidity tooling (deposit gravity + cross-sell)
Camp B: Fintechs that remain independent—but must become balance-sheet literate
Not every fintech will be bought. But the ones that survive as standalone firms will increasingly look like regulated finance companies with software DNA, not software companies with a bank partner.
You can see the “balance-sheet velocity” mindset even among smaller players discussing how to originate, distribute, and manage assets while controlling balance sheet size and risk.
In practice, that means:
- More emphasis on diversified funding (multiple partners, multiple channels)
- Stronger program-level disclosures and controls
- A credible plan for what happens when deposits/flows reverse (because they will)
The Forward Indicator To Watch: Who Controls The Deposits?
If you want one simple diagnostic for whether a fintech partnership is becoming strategically central—or strategically expendable—ask: who controls the deposits and operating balances?
Brex is interesting precisely because it sits at the nexus of spend management and customer cashflows, and Capital One is effectively saying those cashflows are too important to leave as “partner economics.”
Bottom Line
Fintech is being absorbed into banking strategy—because the balance sheet is back at the center of competitive advantage. Funding costs, liquidity stability, capital treatment, and regulatory accountability are moats.
The fintech winners in 2026 won’t be the ones with the slickest UX. They’ll be the ones who either (a) become indispensable engines inside bank balance sheets, or (b) build independent models that treat the balance sheet as a first-class product.