Raisin joins N26, Revolut and Monzo in the State-side rush
Following Raisin's most...
Raisin is the latest European fintech gearing up to move state-side, but what's driving Europe’s no 1 deposits marketplace?
Following Raisin's most recent acquisition, the Berlin-based savings manager shows no sign of slowing down as it prepares for its move to the States. Paul Knodel, who was appointed as US Chief Executive, Raisin, told Sifted that the fintech is “further along” in its plan to open a US office than it had previously anticipated. The acquired company, Spanish-American software specialist Choice Financial Solutions, is complimentary to both the company and its US strategy, as it will assist in securing US bank partnerships. In line with this plan, it is estimated that 10 US-based banks will join the platform by the end of 2020.
“[Choice Financial Solutions] enables our partners to quickly create innovative products and distribute them, and we bring additional distribution capabilities through Raisin,” said Knodel. “Another capability of the platform is record keeping. We would do all the record keeping on behalf of the bank and then feed data into the bank systems.”
This move comes hot on the heels of financial institutions such as N26, Revolut and Monzo, who have made the shift to the US market, which largely remains an untapped fintech goldmine.
“We have a strong track record from Europe to deliver value to banks and consumers on our platform. In the U.S., we’re going to bring value to our bank partners through their ability to create new products quickly and with some unique features," he added.
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How does Raisin work?
Dr. Tamaz Georgadze and Dr. Frank Freund founded the startup in 2013 with a goal to create a “savings marketplace.” Today Raisin has over 160,000 users who can automatically apply to over 60 partner banks for high-interest savings accounts in order to find the best deal, all through one application. Raisin was voted best German term deposit marketplace 2014, 2015, 2016 and 2017.
Did you know?
As of today, Raisin has also joined the Temenos MarketPlace.
The software company, to which 41 of the top 50 banks rely on to process daily transactions, will now offer its clients Raisin’s high-interest offers.
Stephan said: “We are delighted to be joining the Temenos MarketPlace. Temenos has a large base of retail and universal banking clients in Europe which we hope to attract to Raisin and which, in turn, would greatly increase the efficacy of the platform, helping more savers get a decent return on their money as well as supporting banks to access retail liquidity effortlessly across Europe.”
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Zafin: Banking is now in the era of the tech ecosystem
The development of tech ecosystems is placing the future of post-COVID banking in jeopardy. At a time when Big Tech can replicate the functions of traditional financial institutions, what can banks do to retain a grip on the market?
John Smith, EVP Ecosystem at Zafin, has a few ideas. A SaaS cloud-native product and pricing platform for financial institutions, Zafin is preparing the next generation of banks to cope with this precise challenge.
Smith is responsible for the strategic and tactical management of the company’s ecosystem, including the creation of new business models to support growth and differentiation. We asked him four questions:
Q. Have the events of the pandemic caused an irreversible shift in the digitalisation of banks? If so, is COVID the sole cause or are there other factors?
It’s a great question and one that I am asked a lot. Without a doubt, the COVID-19 pandemic has driven a significant shift in the acceleration of digital. In fact, I’ve seen some estimates show there to have been as much as four to six years of digital adoption growth since the initial lockdown started.
While the pandemic may be the primary reason for this growth, two other drivers include fintech disruption and the high costs of operating a traditional retail bank. Both of these factors have caught the attention of banking executives as they set their minds on accelerating digital transformation with a focus on high return, low risk.
Q. Some commentators believe banks must learn from Big Tech in order to survive. Do you agree? Please expand.
I agree completely; we’re living in the era of the ‘ecosystem’. All the seismic shifts we’re seeing in technology, be it aggregation, embedded finance, DeFi or hyper-personalisation are all enabled by the foundation of an ecosystem.
When financial institutions work with a strategic partner like Zafin, which has made the strategic investments in a best-in-class ecosystem, they’re able to capitalise on opportunities more quickly and safely, and will be better positioned for growth now and at the other side of the pandemic.
Q. What are currently the obstacles to adopting Open Banking? Is it more likely to 'take off' in some regions rather than others?
I would argue that Open Banking has been in the US for some time and will only continue to grow there. By definition, Open Banking is about the secure sharing of financial information that customers are aware of and have authorised. Under that definition, we’re seeing aspects of this well underway even though its full potential remains to be seen.
Third-Party Providers are a natural outcome of Open Banking, whereby they can create propositions beyond what a bank normally does to enable banking functions such as payments, borrowing, saving and so on. Once again, some of these are already present through industry-led initiatives, whereas regions such as the EU have taken the pathway of regulation such as PSD2.
The industry-led initiatives we’ve seen in the US have also had the added advantage of guard-rails that regulatory bodies like FFIEC and CFPB provide. There are also other technology-led initiatives such as API definitions that are set out through the FS-ISAC.
I would argue the future of Open Banking in North America will be through the natural evolution of the guidelines and API definitions that have been published, as well as the natural progression of industry initiatives.
Q. Are there any other bank tech trends you'd like to discuss?
Coreless banking. Zafin has been pioneering some of the work around externalising functions out of the legacy core to drive a more ‘fintech nimble’ bank, while not having to deliver a ‘heart and lungs’ core bank replacement.
Real life examples of this include moving some of the core functions of a banking system, such as product and pricing to a platform like Zafin. Origination, onboarding, KYC, risk, and compliance are all other examples of externalising banking functions for added agility.