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API and Open Banking Landscape – 2nd Edition

 

Welcome to our second edition of API Landscape where we have collated interesting insights from the world of APIs and Open Banking.

Section 1: Serving a niche

Finding an underserved customer segment that hasn’t yet been successfully targeted is becoming increasingly difficult in the crowded banking and payments space. As a result, we’re seeing challenger banks and new bank propositions looking to cater to, and serve the needs of, more niche demographic segments of the population such as the LGBT community, young teens and hourly workers. Another angle on this theme is the growing need to support digitally excluded consumers and businesses, who span a range of customer segments, but are at risk of being left behind by the shift online – a theme explored later in this section.
 

  1. Be Money is set to become the first LGBT+ challenger bank in the US, looking to tap the 11 million people living in America’s queer community. Yet to unveil its full offering, the start-up has announced a few of its features including peer-to-peer (P2P) advice from LGBT+ advisors on money issues specific to their personal experiences.

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  1. Société Générale has launched a new free account called Banxup for teenagers which connects to their parents’ pre-existing accounts with the bank to give teens newfound financial freedoms in a safe and controlled way.

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  1. Kids money management app Nestlums launches - the creative arm of core banking vendor Thought Machine has joined forces with game developer Glitchers to build an app that teaches kids money management skills.

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  1. Orka, a UK technology firm focused on products specifically targeted at hourly workers, has launched a product that enables employees to withdraw a percentage of their wages as soon as they’ve worked a shift.

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Sub-section: Supporting the digitally excluded
 

  1. Mastercard has joined the 'Leave Nobody in the Dark' campaign which is working to offer immediate support to digitally and financially excluded people in the UK, focusing on those in poverty hit hardest by the impact of Covid-19.

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  1. Amazon has launched an accelerator programme for the UK’s small businesses and startups, aimed at providing them with digital tools to recover lost income during the coronavirus crisis by helping them expand digitally and trade online.

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Section 2: Payments partnerships

Despite a Covid-19 induced slowdown in deal flow, the payments space in particular has seen a wave of new partnerships in recent months, emphasising the importance that major players are putting on collaboration to sustain growth. Some argue that partnerships in banking are a fad, given that most major banks are not well suited to this type of relationship due to their size and organisational complexity. However, these recent announcements highlight the traction in new partnerships in the payments space following the peak of the Covid-19 outbreak.
 

  1. Samsung has announced a new partnership between Samsung Pay, the digital banking platform Curve, one of Europe’s leading fintechs, and Mastercard to launch the Samsung Pay Card.

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  1. The Italian paytech company Nexi and the global consulting firm Bain & Company have signed a strategic partnership for open banking. Bain will provide its support in identifying strategies aimed at making open banking a business opportunity for banks in Italy.

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  1. ASX-listed buy now, pay later outfit Splitit is going for global growth through a multi-year distribution and development partnership with Mastercard.

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  1. Credorax, the smart payments provider and FinTech, has announced a partnership with Samsung to develop blockchain technology to offer open banking services.

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  1. Suisse and KLARA are the first partners to be connected via the SIX platform "b.Link", allowing them to offer SMEs additional payment transaction applications.

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  1. Klarna, the Swedish buy now, pay later fintech, has partnered with Raisin, the German online deposit marketplace, to offer higher interest rates to German retail customers

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Section 3: Where next?

To conclude this 2nd edition, here a few examples of some emerging tech developments in recent weeks. Facebook have signalled more may be coming from them through the launch of their WhatsApp payments service and Take&Go stores may have a key role to play in the new normal for shopping in light of the Covid-19 pandemic.

 

  1. Independent financial advisory and tech wealth organization deVere is launching an onboarding verification app based on a biometric selfie and document capturing to meet what it characterizes as “soaring global demand.”

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  1. Facebook has launched its WhatsApp payments service in Brazil, enabling people to send money and make purchases from within the chat app.

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  1. Sberbank, one of Russia’s largest state-owned banks, has partnered with Visa and Russian supermarket chain Azbuka Vkusa to pilot its first ‘Take&Go’ store.

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