Open banking and platformification have reshaped the traditional financial services landscape, facilitating new and innovative ways to consume products. To keep up with consumer demands and competition from fintechs, neobanks, and technology giants like Alphabet, Meta, and Microsoft, banks need a differentiated strategy.

That’s where marketplaces come into play, serving customers’ diverse and specific needs by bringing together products and services from banks themselves and trusted third parties. As a result, banks, consumers, and partners all benefit.

Evolution of the digital economy

Players like Amazon and Apple have disrupted the traditional hierarchy by developing a digital ecosystem, interconnecting services using application programming interfaces (APIs), and taking advantage of the network effect.

Banks can capitalize on the new landscape using an ecosystem approach and two core API-centric methods:

  1. Banking-as-a-Service (Baas). A business-to-business model where licensed banks integrate their digital offering directly into the products of non-banks, allowing the latter to provide customers with financial services like loans, payment capabilities, and debit cards.
  1. Banking-as-a-Platform (BaaP). The inverse of BaaS, where banks combine their existing offering with services from other companies, earning commission on aspects that aren’t their own.

Banking-as-a-Platform using a marketplace is where the real transformation takes place, helping banks accelerate the delivery of services and increase customer loyalty. Aiming to deliver transparency, seamless journeys, and competitive pricing, these digitally-driven platforms are customizable to consumers’ varied needs.

Banking marketplaces typically take two forms:

  1. Aggregator ecosystems that offer a broad range of services for consumers to browse – for example, customers can view a product, secure finance, and get insurance in one place.
  1. One-stop platforms that address specific customer needs by integrating services from select third parties.

Image: Banking marketplaces typically take two forms, aggregator ecosystems and one-stop platforms.

Capitalizing on the trust factor

To successfully launch a marketplace, trust is key – something banks already rank highly for, as per the 2022 Galitt PayObserver that surveyed consumers in Belgium, France, Germany, Italy, and the UK. According to its findings, “banks have the biggest competitive advantage in terms of trust”, beating neobanks, payment service providers, big tech, and retailers. When it comes to banks:

  • 53% say they can speak to somebody if they have a problem
  • 49% feel protected against cybercrime
  • 46% feel their money is safe
  • 45% feel the technology used is reliable
  • 43% believe they’re solid and will still be around in 20 years
  • 42% feel they keep personal data safe
  • 38% are sure payments go to the right person/business

Customers trust banks holistically, a sentiment backed up by Axway’s research, revealing people are most comfortable with banks handling their personal data, compared to supermarkets, utility companies, online retailers, and social networks.

Couple that with banks having brand recognition, and they’re in a strong position to successfully launch marketplaces – attracting and retaining customers.

Sopra Banking Software’s Marketplace

Our Marketplace aims to “accelerate modernization and platformization of banking and financial systems by consolidating offers from partner fintechs”. It allows financial institutions to leverage innovative use cases, combining them with Sopra Banking Software’s cutting-edge suite of products.

The powerful ecosystem integrates solutions from firms like Digilytics, Algoan, and IBM, based on several criteria:

  • Added value for customers
  • Reliability
  • Integration speed with pre-existing platforms

We work with partners recognized in their domain, helping our clients offer their customers unique, integrated, and bespoke experiences.

Image: Our Marketplace aims to “accelerate modernization and platformization of banking and financial systems by consolidating offers from partner fintechs”.

Axway & Tink

Axway is a forward-thinking French provider of integration solutions – a ‘Leader’ in the Gartner® Magic Quadrant™ for Full Life Cycle API Management for the seventh time in 2022. They aggregate new technologies and make them easily available via products like Amplify, a robust and universal API management platform. 

Meanwhile, Tink is Europe’s leading open banking platform, facilitating services like payment initiation, financial data aggregation and enrichment, and personal finance management capabilities.

Together, they sit on our Marketplace, offering a single, easy-to-use app that aggregates customers’ accounts, providing a comprehensive view of their finances. The portal also allows banks to gather data-driven insights, helping personalize experiences and increase engagement.

Particeep

This company provides no code, white-level turnkey solutions to deploy subscription paths to banking, insurance, and investment companies. Two use cases are part of our Marketplace – ‘Insurance distribution’ and ‘Investment distribution’.

The former uses a Rest API and open finance to provide end-to-end customized digital subscriptions for insurance products. And the latter offers bespoke listed and unlisted investment products directly to end customers or via distributors, while respecting regulatory compliance.

Leveraging innovative use cases with banking marketplaces

A banking marketplace is an ecosystem approach that offers products and services from the financial institution itself, alongside solutions from a range of trusted partners. Marketplaces are a way for banks to stay relevant, and they’re primely positioned to make meaningful headway, given customer trust levels. With consumers demanding more, marketplaces help banks add value and create new revenue streams, attracting clientele and fostering loyalty.

To find out more about our partners Axway and Particeep, click here for a video.

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Eric Chevrier

EVP, Strategic Accounts

Sopra Banking Software