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Fintech valuations and funding rounds had a tough year in 2023 as high interest rates pushed investors into capital conservation mode. In 2023, “VCs were just trying to protect their own portfolios and be cautious with their investments,” Robin Scher, head of fintech investment at Lloyds Bank, said at FinovateEurope last month. “Fintechs that raised […]
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Vaidik Trivedi
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MEMPHIS, Tenn., March 5, 2024 (Newswire.com)
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Evolve Bank & Trust (“Evolve”), a global leader in the payments and Banking-as-a-Service (“BaaS”) industry, recently partnered with Neon Money Club, a digital financial wellness and investment platform, to issue the Neon Money Club Cream American Express® Card, which became available for pre-order on November 1, 2023.
The Cream Card lets Card Members invest by converting their Neon Money Club points to invest in stocks. Neon Money Cub will match the value of Card Members’ points when they convert those points to invest in stocks in the NMC app. For example, if a Card Member converts 1000 Neon Money Club points to invest in stocks in the app, Neon Money Club will match it with an additional 1000 Neon Money Club points for stocks. The Card also includes benefits from the American Express Network, including Amex Offers (for shopping, travel, dining, services, entertainment, etc.), presale ticket access, dining benefits, and purchase protections.
“Neon Money Club is what the next generation of financial brands will look like,” said Luke Bailey, CEO and co-founder of Neon Money Club. “We’re working to bring the important topic of financial wellness to the forefront of discussion. In order to do this, we need to work with institutions that value and understand our mission. This is why we chose American Express and Evolve Bank & Trust. We look forward to partnering with them on this journey.”
“Evolve is proud to begin our relationship with Neon Money Club and launch a product on the American Express network. The financial services and digital payment industry is continuously expanding, and we are thrilled to work with innovative leaders bringing unique and multi-faceted product offerings to market,” said Scot Lenoir, Chairman of Evolve.
Evolve’s card issuing solution offers an array of white-label options including virtual, prepaid, debit, and credit cards. This allows for freedom and flexibility when building out a customized card program to serve consumer demands.
“By working with tech-focused banks like Evolve, American Express makes it more seamless for fintechs like Neon Money Club to bring their payments innovations to life on our global payments network,” said William Stredwick, Senior Vice President and General Manager of Global Network Services North America at American Express.
The Cream Card is available for pre-order exclusively at neonmoneyclub.com.
Source: Evolve
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Oklahoma City-based First Fidelity Bank launched a banking as a service solution (BaaS) Tuesday in development with global payments and banking infrastructure fintech Episode Six. The solution supports embedded finance with low cost, quick to deploy architecture and real-time payment offerings, according to an Episode Six release. “Through a common ledger, we are able to […]
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Whitney McDonald and Brian Stone
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As banking as a service (BaaS) nears mainstream adoption, there is a significant opportunity for banks to join the BaaS ecosystem, develop new relationships with fintech firms and create new revenue streams for themselves at the same time.
The mobile industry is one sector where we will see BaaS become readily adopted by mobile providers, fintech firms and banks. Smartphones — there are about 6.6 billion globally — have given people access to instant communication, and the financial services industry is beginning to understand that by offering smartphone users BaaS, they can facilitate day-to-day living and help families and businesses financially plan for everything from long-term goals to unexpected emergencies.
Most mobile operators around the world offer the ability to make payments via phones but they don’t offer access to banking. Nearly 1.2 billion people worldwide want access to savings accounts and insurance, for example, both of which BaaS can enable.
BaaS, while in its early stage of evolution, is fast becoming part of our day-to-day lives. As consumers, we are used to using apps such as Uber for frictionless transactions. We moved from cash to card and now to digital payments with relative ease, and our spending has probably increased as a result. Overall, all the players in the BaaS system will benefit — the banking provider, the technology company with a banking license, the charter or fintech, and the end consumer.
The business of banking is moving out of the exclusive realm of banks and into a comprehensive ecosystem to bring personalized, customer-centric offerings to market faster. BaaS can enable banks to reach more customers, bring up their economies of scale and drive down costs. Accessing the data captured via BaaS leads to more personalized services and better customer relationship management and retention.
As BaaS becomes more mainstream, regulators have noticed. Neobanks and fintech firms are providing a seamless digital banking experience, and they need a bank to offer cards, lending, money transfers and other banking services. Fintechs also have limited experience with compliance processes. A BaaS model, therefore, becomes critical in a highly regulated and competitive market. Banks have responded by enabling fintech firms and neobanks to have a bank’s resources and infrastructure to expand their offerings while lowering operating costs.
In addition, banking services offered through APIs increase the risk of cyberattacks and security breaches if not carefully managed. Technical and operational constraints, like legacy infrastructure, can delay implementations and may require costly manual processes to overcome the limitations. Banks can align their business models and reduce risks by partnering with an experienced fintech that offers a secure digital layer that integrates seamlessly with multiple systems and offers end-to-end connection of business data.
BaaS is in its infancy, but adoption is growing. In the U.S. — where it is more challenging to receive a banking license than it is in Europe — BaaS providers are emerging.
Meanwhile, in Indonesia, an enterprise software supplier that provides software for managing gyms must also allow the management of memberships, heavy machinery or equipment, and payment processing. The gym chain, along with a licensed bank, becomes a BaaS provider — another example of BaaS being employed by commercial enterprises.
Customer expectations have changed: they want contextual, hyper-personalized, integrated banking experiences and on-demand access to banking. BaaS presents a new opportunity for financial institutions to acquire customers at lower cost, reach new customer demographics, grow revenues and deliver customer satisfaction.
Amit Dua is the president of SunTec Business Solutions where he leads sales, business development, client engagement, alliances and industry solutions.
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Amit Dua
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