Author: SysAdmin

Embracing the Future of Lending

Posted on by SysAdmin

The lending sector is undergoing a remarkable transformation, driven by the integration of advanced technologies that streamline processes, enhance transparency, and boost profitability. Lending automation is at the forefront of this evolution, offering fintech organisations a competitive edge in a rapidly changing market.

Despite the rapid pace of change, there is still much progress to be made. As of 2024, over 50% of organisations still struggle to deliver fast, seamless digital lending experiences according to  the “2024 State of Digital Lending” report. This highlights the need for continued digital transformation in lending.

In today’s market, efficiency and speed are paramount. Traditional, manual lending processes are giving way to automated systems that allow organisations to quickly process applications, validate borrower data, reduce errors and make real-time lending decisions.

At the centre of lending automation is the ability to create insights from vast datasets using advanced analytics and machine learning, leading to accurate predictions, effective fraud detection, and minimized risk.

The advantages of automating the loan process:

  • Increased efficiency
  • Enhanced customer experience
  • Streamlined operations
  • Improved data analysis

Lets explore critical considerations for lenders seeking to automate and the best practices to navigate this digital landscape effectively.

Understanding Lending Automation Software

Lending automation software is designed to optimise the loan origination process, covering data gathering, underwriting, loan pricing, and application processing. This technology enhances risk management while improving customer experience by enabling self-service portals that expedite application approvals.

Expanding Through Embedded Finance

Traditionally, only large financial institutions could afford sophisticated loan processing systems. However, advancements in technology have democratised access to lending process automation. Small and medium-sized fintech companies now leverage embedded finance to enhance operations and capabilities.

Embedded finance integrates financial services into non-financial sectors like retail, providing customers with comprehensive financial products, such as lending and trade credit. This integration fosters better customer experiences, loyalty, and new business opportunities through collaboration between financial institutions and other industries.

Automating the Lending Process

When selecting a lending platform provider, lenders should prioritise these features:

  1. Onboarding: a comprehensive onboarding feature addresses key regulatory requirements including Anti-Money Laundering (AML), Know Your Business (KYB), and Know Your Customer (KYC) processes.
  2. Underwriting: enables the creation of precise underwriting metrics, facilitating advanced risk management strategies.
  3. Asset classification: creates a new asset class based on payables, receivables, or credit lines.
  4. Servicing: includes automating the entire debt collection process, along with precise access control, and centralised user management.
  5. Payment infrastructure: provides core features including established bank sponsor contracts, efficient card issuing capabilities and transaction processing.

Benefits of Lending Automation

Automating lending processes enhances customer experience, operational efficiency, and reduces errors.

Key benefits include:

  • Faster Processing Time: Instant credit underwriting with multiple data sources ensures quick, accurate decisions
  • Improved Risk Management: Advanced algorithms assess and mitigate risk, approving applications appropriately.
  • Enhanced Data Accuracy: Captures and verifies data from various sources, minimizing errors and paperwork.
  • Lower Costs: Reduces operational costs by automating manual tasks.
  • Improved Customer Experience: Speeds up approvals and offers a personalised experience to borrowers.

Integrations for Configurable Lending Platforms

To maximize efficiency, integrating with other systems and providers is crucial. Essential integrations include but not limited to:

  • Credit Bureaus: Provides reliable credit information of applicants.
  • Data Providers: Expands data access for comprehensive risk assessment.
  • Electronic Signature Providers: Facilitates secure, digital document signing.
  • Payment Processing Providers: Automates loan repayments, reducing errors and delays.

Automated Loan Origination Tasks

Automation reduces manual effort, speeds up processes, and improves accuracy. 

Key tasks include:

  • Application Processing: Simplifies applications for borrowers and lenders.
  • Credit Risk Assessment: Uses algorithms for risk evaluation.
  • Documentation Gathering: Facilitates online submission and management.
  • Fraud Risk Management: Detects and prevents fraudulent applications.
  • Customer Communications: Expedites application processes with automated interactions.

Lending automation is revolutionising the industry by enhancing efficiency, reducing errors, and delivering superior customer experiences. By leveraging technology, lenders can make informed decisions, minimize risk, and cut costs. Automation also democratises lending, making it accessible to businesses of all sizes and paving the way for a sustainable future in finance.

At Bankable, we provide FinTech’s with a configurable lending platform to elevate your lending business. Book a demo today.

The Shift in the Fintech Ecosystem: Moving Towards Ownership and Control

Posted on by SysAdmin

The fintech ecosystem is undergoing a significant transformation, marked by a shift away from reliance on multiple software providers. This change is driven by the need for financial institutions to future-proof operations and mitigate risks, as exemplified by the recent collapse of Synapse Financial Technologies. Synapse’s failure, which froze approximately $300 million in deposits, has highlighted the vulnerabilities in the Banking-as-a-Service (BaaS) model and underscored the importance of greater control and ownership in fintech partnerships.

The Synapse Collapse: A Cautionary Tale 

Synapse Financial Technologies, once a prominent player in the BaaS sector, served as a crucial intermediary between fintech companies and banks. Its bankruptcy left millions of consumers without access to their funds, affecting numerous fintech firms that relied on its services. This event has exposed the inherent risks of depending on third-party providers for critical banking functions. The fallout from Synapse’s collapse has led to increased scrutiny of the BaaS model and raised questions about the stability and reliability of fintech solutions that heavily rely on interdependent relationships.

Lessons Learned: The Move Towards Ownership

In response to such vulnerabilities, financial institutions are increasingly seeking to own and control their infrastructure. This shift is driven by several key factors:

Risk Mitigation: By owning critical infrastructure, financial institutions can reduce potential weak links in their supply chains. This approach minimises reliance on third-party providers that may face operational or financial challenges, as seen with Synapse.

Future-Proofing: Ownership allows institutions to adapt more swiftly to technological advancements and regulatory changes. It also provides greater flexibility in integrating new technologies, such as generative AI, which are transforming service delivery in the financial sector.

Proprietary Retention: Offering ownership options ensures that partners retain equity value through code ownership. This mitigates risks associated with non-ownership scenarios where institutions have little control over their technological assets.

The Role of Generative AI

Advancements in generative AI are playing a pivotal role in this market shift. AI technologies are enabling financial institutions to streamline operations, enhance customer experiences, and improve risk management. By integrating AI-driven solutions into their owned infrastructure, institutions can leverage these technologies more effectively without being constrained by third-party software limitations.

Industry Implications

The shift towards ownership and control is reshaping the fintech landscape in several ways:

Increased Partnerships: Financial institutions are forming strategic partnerships that prioritise shared ownership models. This trend is evident in recent licensing agreements that empower institutions like Paysafe to own and control their critical infrastructure.

Regulatory Considerations: As institutions move towards greater ownership, regulatory frameworks must adapt to ensure compliance and protect consumer interests. Regulators are now scrutinising BaaS models more closely to prevent future disruptions similar to those caused by Synapse’s collapse.

Market Opportunities: The demand for flexible, robust solutions that offer ownership options is creating new opportunities for fintech companies that can provide these services. Companies that eliminate intermediaries and manage their own technology infrastructure are well-positioned to thrive in this evolving ecosystem.

The fintech ecosystem’s shift towards ownership and control marks a pivotal moment for the industry. By learning from past failures like Synapse’s collapse, financial institutions are taking proactive steps to secure their operations against future risks. This transformation is not only reshaping how services are delivered but also redefining partnerships within the fintech landscape. As technological advancements continue to drive innovation, the emphasis on ownership will likely become a cornerstone of sustainable growth and resilience in the financial sector.

How A Scalable Lending Engine Can Transform Your Business

Posted on by SysAdmin

In today’s rapidly evolving fintech landscape, having a scalable lending engine is no longer a luxury—it’s a necessity. As financial technology companies continue to disrupt traditional lending models, the ability to scale operations efficiently and effectively has become a key differentiator. Let’s explore how implementing a scalable lending engine can revolutionise your business and position you for sustainable growth.

The Power of Scalability in Lending

Scalability in lending refers to the ability of a financial institution to handle increased loan volumes and complexity without a proportional increase in resources or costs. A truly scalable lending engine allows you to grow your loan portfolio, expand into new markets, and introduce innovative products without overhauling your entire system.

Automating the Lending Lifecycle

One of the primary benefits of a scalable lending engine is its ability to automate various stages of the lending process. From loan origination to servicing and debt collection, automation streamlines operations and reduces manual intervention. This not only increases efficiency but also minimises human error, leading to more consistent and reliable lending decisions.

Enhancing Customer Experience

In the digital age, borrowers expect fast, seamless experiences. A scalable lending engine enables you to provide instant decisions and rapid funding, significantly improving customer satisfaction. By digitising the entire customer journey, you can offer a transparent application process that takes only minutes, with funds potentially disbursed within 24 hours.

Key Components of a Scalable Lending Engine

Modular Architecture

A scalable lending engine should be built on a modular architecture that allows for easy integration of new features and services. This flexibility enables you to adapt quickly to changing market conditions and customer needs without disrupting your core operations.

Cloud-Ready Infrastructure

Leveraging cloud technology is crucial for achieving true scalability. Cloud-based solutions offer the flexibility to scale resources up or down based on demand, ensuring optimal performance during peak periods while controlling costs during slower times.

Advanced Analytics and AI

Incorporating advanced analytics and artificial intelligence into your lending engine can dramatically improve risk assessment and decision-making processes. These technologies enable you to build more accurate credit models, implement dynamic pricing, and identify cross-selling opportunities.

Transformative Benefits for Your Business

Accelerated Growth

With a scalable lending engine, you can rapidly expand your loan portfolio without a corresponding increase in operational costs. This allows you to capture market opportunities quickly and efficiently, outpacing competitors who are constrained by legacy systems.

Improved Risk Management

By leveraging data-driven insights and automated decision-making, a scalable lending engine helps you make more informed risk assessments. This can lead to a reduction in non-performing loans by 10 to 25 percent, significantly improving your portfolio quality.

Operational Efficiency

Automation and streamlined processes can yield operational efficiency gains of 20 to 30 percent. This not only reduces costs but also frees up your team to focus on higher-value activities such as relationship building and strategic planning.

Enhanced Regulatory Compliance

A well-designed scalable lending engine can help you stay compliant with evolving regulatory requirements. By centralising data and automating reporting processes, you can more easily adapt to new regulations and reduce the risk of non-compliance.

Implementing a Scalable Lending Engine

Assess Your Current State

Before implementing a new lending engine, thoroughly evaluate your existing processes and systems. Identify bottlenecks, inefficiencies, and areas where scalability is most needed.

Choose the Right Technology Partner

Select a technology provider with a proven track record in delivering scalable lending solutions. Look for partners who offer flexible, API-driven platforms that can integrate seamlessly with your existing infrastructure.

Prioritise Data Integration

Ensure your new lending engine can easily integrate with various data sources, both internal and external. This will enable you to make more informed lending decisions and offer personalised products to your customers.

Invest in Training and Change Management

Implementing a new lending engine is as much about people as it is about technology. Invest in comprehensive training programs to ensure your team can fully leverage the new system’s capabilities.

The Future of Lending is Scalable

As the lending landscape continues to evolve, businesses that embrace scalable technologies will be best positioned to thrive. A scalable lending engine not only allows you to meet current demand more efficiently but also provides the flexibility to adapt to future challenges and opportunities.

By automating processes, enhancing decision-making capabilities, and improving the customer experience, a scalable lending engine can truly transform your business. It empowers you to grow confidently, knowing that your technology infrastructure can support your ambitions, whether you’re serving a niche market or expanding globally.

In the competitive world of fintech, the ability to scale efficiently is often the difference between market leaders and those left behind. By investing in a scalable lending engine, you’re not just upgrading your technology—you’re future-proofing your business and setting the stage for sustainable, long-term success.

Embedding Credit into B2B Payment Flows

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Unleashing the Power of BaaS and Data-driven Liquidity.

As interest rates continue to rise, the working capital challenge is brought into sharp focus for both SMEs and corporates.  For the SME market, the ability to access credit efficiently and seamlessly has become a vital requirement in sustaining the business.  For corporates, maximizing working capital efficiency has become a source of considerable competitive advantage.  While traditional banks have long been the go-to source for business financing, their restrictive lending practices and legacy technology often limit SME and corporate customers from accessing the funds they need in a timely fashion and put a brake on working capital optimization, stalling business objectives and growth.

However, with the emergence of Banking-as-a-Service (BaaS) providers and the innovative concept of embedding credit into B2B payment flows, a new era of financial empowerment has dawned.

The Power of Embedding Credit

Whilst embedded payments and financing have changed the B2C experience over the last few years, embedding the more complex payment and credit flows into B2B businesses is still at an early stage, complicated by the requirement to work with a range of accounting, ERP, and treasury management systems.  The opportunity to revolutionize B2B payment flows, however, means that the opportunity is significant. BaaS technology companies, such as Bankable, are at the forefront of this financial transformation. By integrating alternative credit offerings directly into their proprietary B2B payment infrastructure, they enable businesses to leverage unlimited credit as a strategic tool to optimize cash flow and seize growth opportunities. All accessed through simple plug-and-play API connectivity.

One of the key USPs of embedding credit into B2B payment flows is the ability to provide bespoke financing products. Traditional banks often rely on underwriting methods that fail to capture the true potential of SMEs based on their historic accounting or real-time financial data. With its recent acquisition of AREX Markets, Bankable’s technology has the power to analyze a vast array of data points to assess creditworthiness accurately. This data-driven approach ensures that credit products are designed to cater to the specific needs of businesses, empowering them to access the optimum amount of liquidity required for growth.

Equally as challenging in the large corporate space is the lack of flexibility in accessing credit. Traditional providers take a rather fixed approach to approving and provisioning credit via solutions such as revolving credit facilities which incur cost and time just to set up. The new generation of BaaS providers can be far more dynamic in approving and provisioning the right amount of funds, at the point of need, thus minimizing costs and maximizing the working capital efficiency.

By integrating financing into the payment process, businesses can access immediate liquidity and bridge the gap between payables and receivables through invoice or purchase order financing. This enables companies to maintain a healthy cash flow, facilitating timely payments to suppliers and enabling them to seize new growth opportunities.

Seamless Integration with Payment Flows

By seamlessly integrating credit offerings and liquidity options into B2B payment flows, BaaS providers eliminate the need for businesses to navigate multiple platforms and lengthy loan application processes. This streamlined approach allows companies to access credit at the moment they need it most, without disrupting their day-to-day operations. Whether it’s bridging short-term cash flow gaps or investing in expansion plans, the ability to access credit on-demand is a game-changer for SMEs and corporates.

The BaaS market has witnessed tremendous growth in recent years, driven by the increasing demand for flexible financial solutions. Traditional banks now have the power to better serve their SME and corporate customer by leveraging BaaS providers for their unique credit offerings, and ability around time to market for new solutions. Furthermore, the growing ecosystem of BaaS providers is fostering competition and innovation, resulting in better products and services for businesses.

While the BaaS credit market is still in its early stages, its potential is undeniable. As more companies recognize the advantages of embedding credit into B2B payment flows, the market is poised for rapid expansion. However, to truly unlock the potential of credit products for businesses, the focus must remain on leveraging data to drive liquidity.

The Future of BaaS

The integration of financing options such as credit into B2B payment flows is revolutionizing the financial landscape for businesses, and BaaS providers like Bankable are leading the pack. By leveraging data-driven insights derived from accounting and payment data, Bankable can offer complementary credit products tailored to the specific needs of both small SMEs and large corporates alike. This approach empowers businesses to access the liquidity they need to fuel growth and seize opportunities whilst simultaneously empowering banks and other enterprise platforms to better service more of their customers.

It is crucial for the financial industry to recognize that true credit products should be designed to embrace the unique challenges faced by SMEs. By harnessing the power of data, BaaS providers can bridge the gap between the underserved SMEs and the credit they deserve. It is time for a new era of inclusive BaaS and credit solutions that empower smaller businesses to thrive, and BaaS is at the forefront of making that a reality.

As the financial landscape continues to evolve, the integration of credit into B2B payment flows offers a promising path towards a more inclusive and efficient financial ecosystem, where all businesses have access to the credit they deserve.

About Bankable

Bankable is a global architect of innovative payment solutions enabling Banking as a Service. We enable and serve dominant financial institutions, corporates, and FinTech entrepreneurs to bring to market highly differentiated payment solutions supported by a very strong, immediate business case. Bankable is a founding member of Innovate Finance.

BaaS pioneer Bankable acquires embedded finance platform Arex Markets.

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Embedded working capital and unlimited liquidity will enhance the breadth of the Bankable banking infrastructure core proposition.

London, UK– 15th of June 2023 – Bankable, a pioneer in the Banking-as-a-service industry, today announced the acquisition of Arex Markets, giving the combined company the ability to embed credit and working capital into the payment flows of established neobanks, multinational brands and fintech platforms. Arex Markets’ proprietary technology enables investors to finance a variety of commercial papers to seamlessly speed up payment flows and ease the working capital challenge.

As BaaS and embedded finance solutions continue to proliferate, the B2B finance space continues to struggle with quick and flexible access to liquidity solutions, whilst investors continue to search for the right balance between risk and yield. The legacy banking system has not been able to provide the ability to offer credit and working capital solutions which can be embedded in transactional flows as diverse as accounts payable, invoicing, cards issuing and cross border supplier payments. Which forces businesses to consider alternative private financiers or carrying additional costs on their balance sheet.

Bankable will add working capital (flexible invoice financing , corporate credit cards, lodged cards and revolving credit) to the existing API-first digital platform.  Customers will have the ability to become ‘Bankable’ and build cards, payments, and credit solutions on top of the Bankable virtual account core in minutes. Through extensive investor partnerships, Bankable can offer unlimited working capital matched with an extensive portfolio of relevant customers.  Early use cases for the combined offering are being rolled out in the B2B wholesale travel sector for working capital support on supplier payments; supporting pan-European scale-up fintechs and neo-banks to take the next step in building net new revenues from credit cards; and working with global consumer brands to establish a single payments solution tailored to their needs.

Core to the Bankable approach is working as a friend to the established banking industry and Bankable is working closely with several tier 1 institutions to welcome them as new investors on to the platform providing them with an additional route to deploy capital quickly and flexibly.

Eric Mouilleron, CEO & founder of Bankable: “Together with Arex Markets, we share the same entrepreneurial culture and ambition. Thanks to our complementary assets and strong alignment of our teams, we can attract premium clients seeking to develop a uniform pan-European banking offer leveraging our best-in-class API platform including credit. This partnership clearly sets us up with the richest Bank as a Service offer for premium clients with clear multi-country ambitions.”

Airto Vienola, CEO of Arex Markets, added: “Bankable and Arex share the same mission: to offer embedded financial services across Europe to fintechs, established businesses and brands. Together with Bankable, we offer both a formidable infrastructure powered by the best technology that gives access to banking-related services that are modular and easy to integrate, and the deepest product breadth in the Bank-as-a-Service European market, covering accounts, cards and credit.”

________________________________________________________________

About Bankable:

https://www.bnkbl.com/

Bankable is a global digital core banking platform and Banking as a Service provider. We help financial institutions, corporates and fintech deploy, orchestrate, and operate highly differentiated payment solutions with quick time to market.

About Arex Markets

https://arex.io

AREX Market operates a marketplace connecting businesses with institutional investors unlocking capital by giving them access to an entire suite of credit solutions. AREX’s mission is to drive the cost of financing down so hard-working businesses can retain more of their money and focus on their business.

Bankable contact: pr@bnkbl.com

Bankable and Paysafe team up to provide omnichannel banking services

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Bankable partners with Paysafe to launch a broad range of integrated, omnichannel banking services from Paysafe. Under the global agreement, Paysafe will use Bankable’s core banking services.

Today, Bankable announced a partnership with Paysafe, a world-beating leading and specialized payments platform. Bankable would provide it’s scalable and secure API as Paysafe’s new core banking platform and launch with Paysafe a broad new range of integrated services.

Paysafe as a company strives to enable businesses and consumers to connect and transact seamlessly via it’s digital wallets, online cash solutions and payment processing capabilities. It’s mission is to provide a differentiated value proposition for each and every customer that goes beyond the standard offerings available to them.

Bankable and Paysafe have previously collaborated together with it’s card issuing services to provide the British Red Cross with Prepaid Visa cards to support emergencies. This solution enabled families and individuals to use prepaid cards in the event of a crisis, providing a safe and discreet way to distribute money across those in need.

After signing the agreement, Noah Sharp, Chief Banking Officer at Paysafe, commented: “At Paysafe we’re progressing a number of innovative banking-as-a-service initiatives and broadening our network of relationships with leading banks, and we have a lot of exciting plans up our sleeve. To work with a strong, proven partner like Bankable, and the highly experienced team they bring, is an important component of our delivery in this area.”

Eric Mouilleron, Founder & CEO of Bankable added: “Like Bankable, Paysafe is a customer-centric organisation. Bankable signature one stop platform will serve as Paysafe’s new core banking platform, providing the company with technology to advance its payments infrastructure and enhance the services it provides to customers. We’re excited to support the company in its ambitious, global plans..”

Bankable, the global architect of “Banking as a Service” solutions, announced that his client Blank is now live.

Posted on by SysAdmin

Blank, a French digital bank for independent workers, is backed-up by Crédit Agricole Group via its startup studio, La Fabrique by CA. Crédit Agricole Group, the 10th largest bank in the world by total assets – serving 51 million clients across 47 countries, launched La Fabrique by CA to identify opportunities in banking and finance offers and support the development of selected Fintechs next to Crédit Agricole offers.

Bankable joins Visa Fintech Fast Track Programme as a New Enablement Partner

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Visa’s Fintech Fast Track programme is designed to enable the next generation of fintechs to join Visa’s network and build innovative digital commerce experiences for consumers and merchants

Fast Track programme grows 360% year-over-year, and supports the creation of payment innovations like digital wallets, Business to Business (B2B) and digital currency payment.

See full article here: https://www.visa.co.uk/about-visa/newsroom/press-releases.3051987.html

Bankable and Paysafe support British Red Cross to offer Visa prepaid cards in emergencies

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The British Red Cross has transformed its approach to cash assistance in the event of emergencies following a new partnership with banking-as-a-service provider Bankable and specialised payments platform Paysafe.

Cash assistance is the means by which British Red Cross delivers financial aid during emergencies to make sure that recipients are able to access the goods and services they really need.

Emergencies – whether localised such as a house fire, or national or international such as a health pandemic – can have a large economic impact on communities. If homes are damaged and people aren’t able to work, communities that may already be in vulnerable situations are under increasing financial strain to make ends meet and the British Red Cross is there to help. The charity is now able to give families and individuals in need access to prepaid Visa cards via on-the-ground support workers, instead of relying on cash.

Following the COVID-19 outbreak, some media reports suggesting that cash may aid the spread of the disease have resulted in a shift in its usage and some retailers no longer accepting it as a form of payment, despite scientific evidence to the contrary. According to Paysafe research undertaken in April 2020, 53% of Brits are worried about handling cash following the COVID-19 outbreak, with 51% saying they planned to reduce their long term use of cash due to health and safety concerns.

The British Red Cross’ new Bankable-branded prepaid Visa cards are issued by Paysafe and can be used by recipients at any point of sale or ATM, that accepts Visa. The cards are pre-loaded with an amount defined by the charity and have a unique identification number.

The British Red Cross strives to provide scalable and timely cash assistance within hours after any UK emergency. Its mission is to support individuals and communities in preparing for, dealing with and recovering from a crisis, whoever and wherever they are. The charity responds to an emergency on average every four hours, ranging from domestic fires or utility outages to floods or terror attacks.

Jon Pewtner, UK Operations Cash Manager at the British Red Cross, comments: “By allowing families and individuals to use prepaid cards in the event of an emergency we are able to provide a safe, discrete and empowering way to distribute money to those in crisis. We now operate our Cash Assistance programme with a 24-hour support team. Working with Bankable, Paysafe and Visa we’ve been able to transform our approach to cash assistance and the way we provide funds to those in need in emergency situations. With this programme in place, we have been able to respond with agility and action throughout our COVID-19 response.”

Eric Mouilleron, Founder & CEO of Bankable said: “We’re proud to be supporting the British Red Cross in transforming their financial services and the provision of real-time funds to those in need. This is just one great example of the amazing work they do in supporting the nation in the event of a crisis.”

Lorenzo Pellegrino, CEO of Skrill, NETELLER and Income Access at Paysafe – responsible for the company’s Card Issuing division – added: “We’re seeing many innovative and specialised uses of prepaid cards, but this example is particularly powerful. We’re delighted to play a role in the British Red Cross’ transformation of its Cash Assistance programme.”