With banks facing greater pressure than ever before to modernize, they're turning to FinTechs to support high-scale upgrades, from legacy infrastructure to the cloud. This week's examination of the latest in open banking and bank-FinTech partnership initiatives shows a wide variety of focuses for these collaborations, from lending to cross-border B2B payments.
Standard Chartered Puts The Cloud First
Standard Chartered has made significant investments in cloud technology as part of its modernization initiative, but the effort didn't happen alone. Earlier this month, the bank revealed a partnership with Microsoft, which will wield its Azure cloud technology to enable the financial institution (FI) to become cloud-first.
According to Microsoft's announcement, StanChart will adopt a multi-cloud model to migrate key apps, including its core banking system, to the cloud by 2025.
"Cloud providers have invested massively in the reliability and automation of infrastructure and platforms," stated Michael Gorriz, group chief information officer at Standard Chartered. "Using cloud services improves our ability to be agile and innovative, while increasing our operational efficiency and resilience. As disruption in the financial industry continues, we can focus on client benefits by deploying our solutions quicker and allowing for faster integration of new business models and partners."
Blend Lands Backing For Lending-as-a-Service
Digital Lending-as-a-Service startup Blend recently secured $75 million in new funding, propelling the FinTech's valuation up to $1.7 billion in an investor show of support for its solution that helps banks and other lenders modernize their processes. Blend focuses on mortgages, consumer loans and deposit accounts with its banking services, and with the Series F funding - led by Canapi Ventures - Blend said it will look to further develop its digital platform for financial institutions to digitize their lending operations.
"Financial institutions have traditionally taken time to modernize legacy systems, but digital is now table stakes," said Jeffrey Reitman, a partner at Canapi Ventures, in a statement. "Shelter-in-place and social distancing mandates have forced banks and other lenders to accelerate digital transformation plans from years to months."
Blend can help financial institutions address these quickly-changing customer needs to support a remote service environment, Reitman added.
Bank of Montreal Builds API Portal
The Bank of Montreal (BMO) is embracing APIs to support third party connectivity into its systems and customer accounts, with an initial focus on small businesses. Earlier this month, BMO revealed that its application programming interface (API) portal is now complete. It will first be adopted by Intuit, which operates QuickBooks, TurboTax and Mint, to access customers' bank account data for its own platforms.
Small businesses using QuickBooks Online, for example, can automatically connect their BMO transaction data into the accounting portal. With the API portal now complete, BMO said it will begin testing the connectivity solution, with plans for a full rollout next year.
"As an organization, we've been participating in forms of open banking for more than 15 years and understand the need and value of giving customers control of their data," said BMO Financial Group Chief Digital Officer Brett Pitts. "This collaborative relationship with Intuit Canada is an important step toward a larger open banking framework. We will continue to look for innovative opportunities that help our customers."
Silicon Valley Bank Adopts Plastiq
FinTech Plastiq has announced that Silicon Valley Bank is not only empowering Plastiq's credit card solution to facilitate foreign exchange transactions, but will also adopt the solution for its own corporate customers.
A recent press release said that the integration will allow SVB corporate customers to wield a commercial credit card to make cross-border payments, allowing suppliers on the receiving end of those transactions to be paid in their local currency.
In a statement, Plastiq said that the solution supports enhanced cash flow optimization and working capital management, with cards allowing up to 45 days of extra capital float while still paying vendors on time.
Open Banking Startup Open Payments Raises Seed
This month, Sweden's Open Payments, an open banking FinTech startup, announced seed funding led by Industrifonden, with existing backers Brightly Ventures, Luminar Ventures and angel investors also participating.
Open Payments operates a Nordic open banking platform to aggregate PSD2-compliant APIs. As a licensed payment institute, the company allows third-party businesses to join the platform to integrate with banks and other financial service providers via API. With the new funding, which totals more than $3.5 million, Open Payments said it plans to expand into new markets across Europe and the Nordic region by the end of 2020.