This one caught my eye in Finextra today:
UK high street bank NatWest has teamed up with European software vendor Vodeno Group to launch a Banking-as-a-Service (BaaS) business for the UK market.
The partnership will aim to bring together NatWest’s banking licence and technology with Vodeno’s cloud-based technology platform to target UK businesses and banks.Finextra: NatWest to launch BaaS business in UK
I would imagine there are quite a lot of FinTechs who would have loved this to be operational a good few years ago when they were trying to get their businesses up and running!
I can remember sitting in countless meetings representing a bank whilst meeting with new FinTechs… and whenever it came to the topic of the ‘banking bit’, there was usually a slightly sheepish grin before they spoke, saying, ‘yeah, we were hoping you could do that bit’.
The trouble was, the ‘banking bit’ they were referring to was enormously complex – it wasn’t one system that they could plug into easily. I remember one example that required almost 27 separate systems to be hooked together in order to drive the specific requirement of the FinTech. Whilst it was theoretically possible, the amount of work internally for us was hugely cost prohibitive.
“But don’t you just have an API we can plug into?” This was the usual question, almost always combined with some degree of frustration from the FinTech. Those who had never worked in banking were routinely astonished when we replied, “No, sorry.”
In some cases, the FinTech ended up building its entire banking stack on their own – but only, of course, if funding allowed. In many cases, great ideas couldn’t be executed easily (or at all) because it was far too costly to implement ‘all the banking gubbins’ that was required (as one of my colleagues referred to it as).
So there could well be a lot of demand, especially backed by such a reliable UK brand name as NatWest.