B2B Payments

Cross-Border Efforts Mark Open Banking, API Collaborations

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This new age of Open Banking and PSD2 has opened the door to collaboration between banks and FinTech firms — so, too, has it opened the door to cross-border efforts.

In recent news marking the financial services arena, Cross River Bank, based in the U.S., and Railsbank, based in the U.K., have linked to bring Banking-as-a-Service (BaaS) to a single application program interface (API). The move will allow both firms to use already-extant platforms, and integrate their offerings for FinTech customers internationally. The companies said this will also let Railsbank customers have presence in the United States.

“This is a hugely significant move for Railsbank, as it is the first time that [BaaS] is being delivered on both sides of the Atlantic through a single API,” said Nigel Verdon, CEO of Railsbank, in a statement.

Separately, also in Europe and with a focus on Open Banking, TrueLayer debuted an API geared toward consumers and business users that will offer an alternative to debit and credit card payments. The API works with U.K. banks, and has been in testing with a dozen companies spanning traditional banking, as well as Moneyfarm, a digital wealth manager.

Sites such as FinTech Futures reported that added features will include future-dated payments and batch payments. The updated payments API will debut later this year.

As noted in this space on Monday (Feb. 4), Bud, a FinTech startup based in the U.K., said it has grabbed $20 million in funding. The funding round was co-led by HSBC and Goldman Sachs. It comes as a partnership (since, after all, the banks are co-investors) that gives a nod to the ties that bind amid banks and FinTech firms.

The Bud platform, which lets banks update their app-based offerings, can help categorize spending data and give banks access to financial products from rival companies that may be more cost-efficient for them to use, noted CNBC. The connectivity would allow banks to provide their offerings to FinTech firms and other financial services enterprises.

Other banks that have joined the Series A funding round include Australia’s ANZInvestec’s INVC fund in South Africa and InnoCells (which reports noted is the corporate venture operation run by Banco Sabadell).

In Asia, the Singapore Business Review reported that, according to a survey by MHP Communications, three in five Singaporeans believe FinTech firms are as trustworthy as banks. Roughly 13 percent stated that FinTech firms are even more trustworthy than traditional finance firms such as banks.

“Whilst Singaporeans love their banks,” and the survey put that tally at 89 percent, “an equal number believe local [payment system] companies have a good reputation. Trust falls away for industries [that] general consumers have less understanding of, including insurance (74 percent), FinTech (65 percent) and asset management (63 percent),” the report noted.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 edition of the FI Innovation Readiness Playbook examines how the innovation playing field is leveling as small FIs implement bolder strategies and larger banks adopt more measured approaches.

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