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This is a sector in FinTech that is disrupting the delivery of bank products and asset managers. This technology is allowing to directly plug different solutions into one single infrastructure.

Capgemini’s World Retail Banking Report 2019 shows the public’s acceptance of FinTech and big tech companies over traditional banks: 75% of tech-savvy consumers use at least one financial product from a big tech company; Customers choose non-traditional options for lower fees (70%), user experience (68%), and speed (54%); Over 80% of consumers that would switch financial services providers in the next 3 years, use a banking product from a big tech firm or digital bank. Yes a Swiss private bank can become a digital bank.

We have seen tech giants (e.g. Apple, Google) into offering their own branded financial services such as Google Checking Apple Card . BaaS is about digital-based banking structures that create and deliver financial services through data sharing, better process management systems, and specialized innovation: loans, crowd funding, inclusion financing, asset back securities lending

This being said it is not that easy to start the right package for a different customer segments. Large banks and asset managers have to deal with IT temptations to keep legacy solutions. We have seen that customer on boarding is usually the first step that is being analyzed by large banks. InvestGlass team has been advising during the COVID crisis 3 banks in their solutions connection. The idea is simple :

If you find better and cheaper then it’s a match!

Fintech Solution During The Coronavirus Crisis

We like to work with Onfido which delivers a turn key solution for digital on boarding. Onfido solution also includes a KYC remediation tool which is perfect to speed up account opening workflows. Contact solution providers help traditional banks become more agile. Banking ecosystem is now key for a true competitive advantage. It is not anymore a world where we buy expensive technology but more a world where we buy agile fin Tech solutions to create a new generation of core banking platform.

Composable banking technology

Recently we looked into ThoughtMachine which offers the perfect fit for banks searching white label banking software. The solution can be connected to virtual card systems and have a natural fit for loan business, and it fits to multiple regulatory regimes. If you are looking to build the next Monzo N26 Qonto it could be the right partner to test. Of course connecting the dots can be a challenge likest and a bricks that don’t perfectly fit but API – is – the mortar you need. No “workers” please – you deserve an API in 2021 ! n computing, an application programming interface (API) is an interface that defines interactions between multiple software applications or mixed hardware-software intermediaries. 

Banking-as-a-Service Trends for 2020

The future of BaaS will be a much more mature, modular, and optimized version of what we see today. The definition of BaaS will be split into multiple domains with new market entrants, especially large tech giants – CHINA Alibaba with the new cloud ? Yes the solution are coming from the US and from China but why not from Switzerland !? We believe that many companies will look for Cloud Act Free solutions like Neuroprofiler, Connective, InvestGlass CRM in the next few years.

The API business will change too. We have seen with “déséspoir” to many core banking solution with poor or little API. Yes the future is API, yes it’s with AI-enabled bots. The future of BaaS will be client centric first, would the client be looking for islamic banking… then boom we will connect to an islamic bond thematic application and same for vegan, ISR ESG…

We can imagine also that more KYC protocols will be standardized as well as with the authentication standards. For the communication standard we will see improvements with new protocols inspired by blockchain such as the NYM protocol – building the future of communication or Qwil a fantastic chat application used by wealth managers in the UK.

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