Piermont Bank CEO Wendy Cai-Lee says discipline with fintech clients is key. The bank is watching how newly chartered entities handle regulatory responsibilities.
Cai-Lee was referring to the CAMELS rating system, which assesses a bank’s capital, asset quality, management, earnings, liquidity, and sensitivity to market risk. “It’s a whole other thing to be able to get a good CAMELS rating from your annual safety and soundness exam,” she said.
Regulators have signaled openness to novel charters, and fintechs have pursued national bank charters, trust charters, and industrial loan company charters. Staff approving charter applications are separate from those in risk management, and they look at banks from very different angles, Cai-Lee said.
Cai-Lee is tracking how well newly chartered companies execute against their plans and the role they will play. “How well you execute against your plan, that’s when the examiners come in,” she said. “For many of these newly chartered companies, ‘time will tell.'”
Fintech Partnerships Grow
Piermont announced two fintech partnerships, one with BlxckPay and another with MassPay, to link employer business bank accounts with employee payroll cards and pair payment rails with global payout capabilities. The bank declined to share the number of clients it has or who some are, but Cai-Lee said expanding work with existing customers is more the focus.
Piermont was a partner bank to Parker, a fintech that filed for bankruptcy this year, handling its banking product. Piermont wasn’t “comfortable” with some of Parker’s business, but handled the FBO. “We didn’t lose a single penny because we figured out which part of their business that we didn’t want to do,” Cai-Lee said.
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Cai-Lee said fintech clients are assessed no differently from large loan customers. “You’ve got to make sure your due diligence, your onboarding, your ongoing monitoring, is as disciplined as you’re comfortable with,” she said. That means the partnership must be regulatory-compliant and within the bank’s risk appetite.
The $505 million-asset lender reported a $5 million loss for the first half of this year, following a $4.6 million loss in 2025 and a $5.3 million loss in 2024, according to Federal Deposit Insurance Corp. data.
Building Embedded Banking
Piermont, founded in 2019, continues to build toward becoming a “full, omnichannel, embedded banking provider,” Cai-Lee said. That includes “for benefit of” accounts, card issuance, and embedded lending.
When a fintech fails, Piermont employees do a deep dive on potential lessons learned, even if the fintech doesn’t work with the bank, Cai-Lee said. In embedded banking, when a fintech breaches their reserve and needs to top up but cannot, staying disciplined is key.
“If you have a very large client, supposedly very well-funded, they said, ‘Hey, you know what? Yeah, we forgot. We’ll top it up.’ And a week goes by, two weeks goes by. What do you do? Do you actually shut them down?” Cai-Lee said. “For us, contractually, the bank reserves the right to pause. But can you really pause your client? That’s tough.”
AI Reshapes Fintech Role
The CEO indicated she’s also watching to see how artificial intelligence reshapes banks’ reliance on fintechs for certain services. “With AI, does the bank still need some of what the fintechs bring to the table?” Cai-Lee said. “Fintechs need to think about how … they go up the value chain, so to speak, so that there’s real value proposition to be a partner for a bank.”
