The bank-FinTech collaboration model is often about wielding digital-native FinTech solutions to fit within bank offerings.
Yet this week’s look at the latest tie-ups reveals new models of collaboration, including FinTechs expanding their footprint within banking, and wielding banks to fit within their own tech solutions.
Kabbage Steps Into Banking
Alternative small business lending platform Kabbage recently augmented its offering for small- to medium-sized businesses (SMBs) with the debut of its checking account connected to a range of digital banking services. Offering eWallet and bill payment services, among others, Kabbage Checking aims to address SMBs that are “too often left out, overlooked and underestimated,” according to the company’s president, Kathryn Petralia, who added that SMBs need digital banking solutions “without sacrificing anything they expect from a bank.”
Deutsche Invests In Traxpay
Deutsche Bank recently announced an investment in Germany FinTech Traxpay, a company that will integrate supply chain financing technologies and solutions within Deutsche Bank’s own offering. Traxpay offers dynamic discounting and reverse factoring solutions for corporate customers, which Deutsche Bank said is particularly important today considering businesses’ cash flow constraints within supply chains as a result of the global pandemic. In a statement, Daniel Schmand, global head of Trade Finance and Lending at Deutsche Bank, emphasized the role that bank-FinTech collaboration plays in addressing pain points like these, noting, “With Traxpay we have an experienced partner with a good track record. We can work with them to offer our clients further solutions in this area. Our answer to the question ‘FinTech or bank’ is: ‘FinTech AND bank.'”
Infor, DBS Collaborate On Trade Finance
Business cloud technology company Infor revealed a new partnership with Southeast Asia’s largest bank, DBS Bank, based in Singapore. The FinTech-bank collaboration will see DBS Bank being integrated into the Infor Nexus network. The tie-up means DBS will facilitate trade financing to corporates within the Nexus network, with the partners recently securing their first customer, a global apparel company in need of supplier financing solutions. Whereas bank-FinTech collaborations often take the form of a FinTech integrating a digital-first solution within a bank offering, DBS and Infor’s partnership highlights the opportunity FinTechs can gain by adding bank technology and resources into their own products, too.
TradeCore Talks Open Banking Impact
In a recent conversation with PYMNTS, TradeCore CEO Stefan Pajkovic discussed the impact that open banking has had on the U.K.’s financial services arena — and some areas of the market in which it has fallen short. For instance, he explained, while open banking aimed to promote competition and make it easier for FinTechs to launch new solutions to market, it hasn’t addressed all barriers to entry, with many FinTechs failing to launch as a result of hefty compliance requirements. In response to this challenge, TradeCore recently launched a platform — powered by open banking — to streamline core infrastructure and functionality for developers to accelerate their own product development and launch. Today, open banking, said Pajkovic, is “not something that has taken the market by storm yet. The capabilities are there, but utilization has not reached the levels that we expected.”
HashCash Enhances Risk Mitigation
In its Banking-as-a-Service offering, HashCash recently revealed strengthened risk mitigation capabilities within HashCash Consultants. The company is offering banks and other financial institutions (FIs) a suite of technologies to mitigate risk at a time when market volatility has made it more challenging for FIs to “regularize the liquidity policies while aligning the same with government norms,” as CEO Raj Chowdhury said in a statement.