The news: Green Dot announced that it’s partnering with Plaid to offer open banking data sharing to customers of its in-house neobank, GO2bank.

• The deal involves integration with Plaid Exchange, an open banking solution that facilitates bank account data sharing with over 6,000 financial apps.

The rationale: GO2bank is geared toward US customers who are underserved and living paycheck to paycheck—the company puts this figure in the millions—and Green Dot said that its Plaid partnership is designed to build on this focus.

• The banking company quantified its addressable market, citing a 2021 Morning Consult survey that shows 10% of US adults are unbanked, meaning they lack checking or savings accounts.
• An additional 24% are unbanked, or hold accounts but recently used alternative services like check cashing.
• These survey results differ from FDIC and U.S. Government Accountability Office (GAO) findings, which showed a 5.4% unbanked figure among households, as of 2019, and a recent 17.9% underbanked estimate based on previous data.
• Green Dot claims that getting underserved people engaged with fintech products creates a virtuous cycle, pointing to a 2021 Plaid survey which found that 71% "say the more they use Fintech, the more confident they feel about their finances." The company says this helps create demand for platforms with secure open banking offerings.

The opportunity: If the GO2bank deal succeeds, Green Dot could expand its Plaid partnership to its banking as a service (BaaS) arm. Cornerstone Advisors predicts that the US BaaS market will exceed $25 billion in revenue by 2026, up from only $1.2 billion in 2021.

• Green Dot can use BaaS product enhancements to boost the performance of its B2B Services reporting segment, which houses BaaS. The segment made up around 37% of its total operating revenue in Q4 2021, at approximately $121.9 million.
• Plaid Exchange could give Green Dot another selling point to prospective BaaS clients, and foster higher customer retention.
• The company could also make open banking available to non-bank BaaS partners—it has named Uber, Apple, Walmart, and Google—further enhancing its relationship with Plaid.