As competition in the neobanks space begins to heat up, big bank Westpac is diving into the world of fintech, announcing plans for a new standalone digital platform designed to offer “banking-as-a-service.”
Westpac is partnering up with UK-based, cloud-native banking technology provider 10x Future Technologies to build its new platform, which its going to have up and running before the end of 2020.
“We’re preparing for our digital future by investing in a new digital-only banking platform that will complement our existing banking businesses,” Westpac chief executive Brian Hartzer said, invoking the cloud computing lexicon to sell the new digital bank.
“This will initially operate a ‘bank-as-a-service’ model and we intend to bring new digital products and services to market through fintech and institutional partners. This will allow Westpac to reach a new group of customers as well as create value for our partners by enhancing the service offering to their own customers.”
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The platform is separate to Westpac’s existing core banking platform, which means instead of being offered to existing customers, third parties like Westpac’s institutional customers and fintech partners will be able to deliver Westpac’s banking products to their own customers via APIs.
However, if the technology proves a hit, it could be the start of Westpac making moves to improve it’s core digital offering as well.
“In the long term, if the platform proves up the way we think it may, it's potentially something we can fold back into our own core operating environment and thereby help us drive our own costs and flexibility in a better direction,” Hartzer said.
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This isn’t the first toe Westpac has dipped into nw fintech opportunities. It’s Reinventure program has invested $150 million in different fintechs including Zip and Assembly Payments.
And it’s not the only big bank to invest in up and coming fintech solutions - CBA has invested in buy-now-pay-later Klarna, while NAB Ventures has invested in platforms such as Earnd and Veem.
If you’re interested in digital banking and up and coming new financial platforms, be sure to check out our neobanks comparison to see if there’s a digital only match for you!