How Banking Marketplaces Are Redefining Finance

October 11, 2021

Forward-looking banks are shifting their mindsets and including products and services from third parties that over-deliver on increasing customer needs.

Innovation in the financial services sector is thriving and a new trend is fast approaching. It has less to do with core banking technologies and much more to do with integrating tech services. This is the rise of banking marketplaces: one of the latest and most prominent innovations in banking.

What are banking marketplaces and how do they function?

Banking marketplaces combine various products and services into an ecosystem that serves customers’ specific needs. Typically, these products and services come from a variety of ecosystem partners—including retailers and healthcare providers—as well as financial offerings from banks themselves. This approach holds the potential to deliver transparency, competitive pricing, and to match financial services with customer needs.

There are two variations in the banking marketplace model. Aggregator ecosystems create a marketplace with a wide range of products and services for customers to choose from. Examples of aggregators include the financial supermarket Finder (formally Go-Bear), Canadian life insurance brokerage platform PolicyAdvisor, and the UK-based Starling Bank Marketplace which offers a broad selection of financial products for customers to manage their money. Similarly, competitor neobank Revolut also combines products from third parties and offers them in-app to its customers including wealth management, insurance, and customer loans offered by the peer-to-peer lender Lending Works.

Another form of banking marketplace fully integrates services from select third-party providers to create a one-stop shopping experience to address customer needs. For example, Russian bank VTB has launched an online car marketplace in partnership with the car dealership aggregator ILSA.

Banking marketplaces shift focus to business customers

In the UK, Starling Bank’s Personal Marketplace combines products from partner fintech and lifestyle providers. On the commercial side, the Starling Business Marketplace integrates services including accounting, payments, and communications.

Looking ahead, PwC has recently announced plans to launch the digital banking marketplace Tysl for business customers. Some of the fintechs to sign up so far include challenger credit agency Credit Kudos, API provider Codat, compliance fintech DueDil, and the SaaS platform Mambu. Commenting on changing customer needs and the potential of their platform, Lead Partner on Tysl James Morgan explained that: “Banking is changing. People expect more and require personalised digital interactions… [Tysl] is helping our clients reach new customers, upsell, and grow topline revenue by delivering enhanced capabilities whilst significantly reducing the costs of servicing the client from onboarding to in-life servicing.”

Integrate debit cards, payments, and apps into your banking marketplace

Marketplaces are an increasingly attractive model for banks looking to improve customer convenience by using matching to fit their needs. Furthermore, marketplaces enable banks to leverage their enterprise networks and partner with ecosystem providers to create new revenue streams and add value—such as tackling complex tasks including compliance, credit decision-making, and loan servicing.

Baanx’s digital platform can be incorporated into your existing financial infrastructure to deliver virtual and physical debit cards, payment gateways, white-label mobile apps and more, allowing businesses and users to bridge the gap between fiat and digital assets seamlessly.

Contact us to learn more about how we can help you launch a financial service in a matter of weeks.