HOW TO (RE)BUILD A BANK: PLATFORM SERVICES
At your service Jörg Howein, Chief Product Officer at Solarisbank, and Pedro Barata, Head of Customer Success at Feedzai, on the benefits of platform services – whatever your niche The niche banks of today might well be the mainstream providers of the not-too-distant future. In particular, 'purpose-driven’ challengers – ‘purpose’ being shorthand for whichever environmental and societal benefits feature on their triple bottom line of profit, people and the planet – have made huge strides in customer acquisition over the past year and a half. Such neos might focus on the underbanked, for instance, the environmentally-conscious or an ethnic group. They appeal to people across the generations who’ve had cause to re-examine their values of late and seek out a bank that more closely reflects them. Accenture calls this emerging demographic the ‘reimagined consumer’, following its survey of 25,000 people across 22 countries, which found the pandemic had made half reconsider their personal purpose. Among other things, that’s driven unprecedented interest in ethical investments. According to Triodus Bank, a pioneer of sustainable finance since the 1980s, COVID-19 has motivated one-in-five UK adults to explore ethical funds, a figure that increases to
Banking on a plate: Platform services take the strain
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35 per cent among the under-35s. Tomorrow – a German sustainable finance startup that’s put yesterday’s banking model behind it and uses account holders’ money exclusively to invest in sustainable projects – has seen the impact of the world ‘resetting the dial’ on its account opening, too. Since launching its mobile current account in March 2019, it’s attracted more than 80,000 customers, 20,000 of them in the first half of 2021. So, how do it and others cope with such rapid expansion while maintaining the same level of innovation, all the while doubling down on compliance and security as regulated processes come under the
pressure of numbers? Like many next-gen startups, it’s decided to be selective about what it builds, what it buys and where it partners to achieve its goals. So, while its in-house team continues to concentrate on developing analytics around carbon-neutral spending and investment, and designing sustainable products, the architecture on which that all hangs is devolved to European banking-as-a-service (BaaS) provider, Solarisbank – which also acts as issuer for
Tomorrow's eye-catching wooden debit card. Solarisbank, in turn, now relies on global financial crime gladiator, Feedzai, to ensure that its systems are robust and compliant in every territory for which Solarisbank provides its banking, transaction and lending services. In an ‘as-a-service’ world, whether you’re a standalone startup, a speedboat launch from a legacy bank, or, indeed, a platform provider, 2020 demonstrated that it makes little sense doing everything yourself. “Around 80 per cent of our accounts have been opened in the last 12 months or so. We are growing quicker, every month,” says Jörg Howein, chief product officer at Solarisbank, who’s overseen the building of a broad product suite, ranging from accounts to cards, lending and digital assets, and to which will soon be added brokerage services. “When we started, in 2016, it was all about going to the market quickly and one decision we took at the time was to make ourselves responsible for transaction monitoring and compliance processes,” says Howein. But as Solarisbank clients rapidly expanded their customer base during the pandemic and traffic across its platform increased, it recognised that approach was unsustainable. “So, last year, we brought in Feedzai as a provider for a specific part of our infrastructure.” At the same time, Solarisbank became the first German bank to shift its entire operation to the public Cloud, migrating its core systems, digital products and databases to the Amazon Web Services (AWS) platform. The two moves, combined, positioned it to scale across Europe in 2021. The bank’s decision to partner with Feedzai has not only relieved pressure internally, but has also given Solarisbank access to financial crime data that could reveal way more about emerging threat patterns than it could ever hope to discover from its own platform. Now, it benefits from insights gained from Feedzai’s artificial intelligence monitoring hundreds of millions of transactions every second of every day. Issue 21 | TheFintechMagazine
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