April 2024 AI Newsletter Banner

Citi’s Tuum Investment Changes Cloud Core Banking Dynamic

Embedded payments, embedded lending and a continuing shift to virtual cards all demand a reconsideration of technical infrastructure.

Banks, grappling with legacy back-end systems, and FinTechs, seeking to innovate within financial services — and smaller businesses aiming to engage with their end markets — have seen a rush of providers streamlining those efforts, with notable capital backing, too.

To that end, Citi Ventures announced a strategic investment in Tuum, a core banking provider, last week, where Citi will reportedly introduce Tuum to key stakeholders within the Citi universe. Elsewhere, LHV Bank said last year that it had partnered with Tuum to transition to a cloud-based banking system. 

We note that the linkups between banks and core providers help enable an API-driven overhaul that lets the traditional players replace and digitize some of the processes tied to legacy systems.

Citi had already struck a core banking provider relationship of note last year — this time, with a corporate client focus. 

Back in June, Citi Treasury and Trade Solutions and Pismo said that they’d partnered to use the latter’s technology platform to help underpin the bank’s corporate demand for deposit accounts. The DDA infrastructure, the companies noted, moves to real-time status with 24/7 processing. Pismo, in turn, was acquired by Visa at the beginning of the year.

PYMNTS Intelligence data shows that more than three-quarters of international banks surveyed are innovating their embedded finance offerings geared toward corporate payments. 

Beyond the Banks 

Beyond the bank-specific overhauls, core banking providers and functionality extends to help shape ecosystems in retail and other verticals. Earlier this year, Velmie launched its Business Banking Platform to help financial services providers and FinTechs broaden their product offerings through a modular approach to payments, cards and FX-related activities.

The platform enables these companies to cater to business client needs, including corporate payroll, automatization of payments, invoice factoring, cryptocurrency payments and business deposits.

Separately, PYMNTS reported that Fiserv and Central Payments collaborated to provide FinTechs, enterprise businesses and payment facilitators access  to comprehensive and regulated core banking and payment services.

As detailed upon the announcement, Fiserv’s technology stack includes a real-time core, card processing and issuance, while Central Payments’ API marketplace includes program management and compliance oversight. The partnership came in the wake of Central Payments having announced, separately, that it had raised $30 million in growth equity financing.

For banks, online marketplaces, FinTechs and other enterprises, digital lending and digital wallet buildouts offer the opportunity to attract and grow new revenue streams.