Railsbank, a London-based startup, offers banking-as-a-service, enabling its clients to quickly build and sell various financial services or add fintech features to their products. “Our platform allows any company or brand to offer financial services,” says CEO Nigel Verdon.
Railsbank’s customers include Fintechs and traditional banks that want to compete with Fintechs. But the company’s technology also enables firms outside of financial services such as supermarkets, or oil companies or seed producers, to onboard end users, issue unique international bank account numbers (IBANs), receive and send money into accounts and issue and manage branded credit cards. It can build a prototype for new clients in two to four days and go live with a service within two to three months, Verdon says.
Earlier this month Railsbank announced a strategic investment from Visa, bringing the total amount of funding raised to €16 million, and said it has signed a five-year partnership with Visa to deliver Banking as a Service (BaaS) innovation in Southeast Asia.
An estimated 70% of the population in SE Asia is unbanked or underbanked leading a whole variety of new players to add payments and financial services to their offerings. For example, applicants for full banking licenses in Singapore include a platform play led by gaming hardware company Razr, which has teamed up with a local supermarket operator, an insurance business, an Internet company and a regional wholesale marketplace for cars with the aim of creating a bank for millennials.
Others applying for a banking license in Singapore include Grab, a South East Asian ride-sharing app active in eight countries. It has added financial services such as digital payments, rewards, lending and insurance to an array of other on-demand services such food delivery, grocery delivery and package delivery as well as hotel bookings, on-demand video, a ticketing platform and health services and has applied for a full banking license in Singapore in partnership with telecom operator Singtel.
It’s part of a larger trend. In a presentation, Angela Strange, a partner at Silicon Valley venture capital firm Andreessen Horowitz, predicts that every company will become a fintech company. Just as today, anybody can start a software company with a credit card and a laptop because Amazon Web Services offers infrastructure as a service, dramatically reducing cost and complexity and unleashing thousands of experiments, this same monumental change — infrastructure “as a service” — is coming to financial services. This transformation will reduce the cost and complexity to become a financial services company, and importantly, it will unleash thousands of experiments that will pave the way for the future of banking, she says. Owning and controlling payments data could also be key in helping large companies outside of the financial services sector collect invaluable information about their customers and build successful platform businesses.
Railsbank’s competitors include the U.K.’s ClearBank, Berlin-based solarisBank and Bankable, a U.K. startup that offers white-label amd API-based payment solutions including e-wallets, m-wallets, remittance services, peer to peert transfers and prepaid card programs.
Railsbank’s differentiator is that can handle multiple currencies and offer banking-as-a-service globally, says Verdon. It has e-money licenses in the U.K., Europe and Singapore and plans to soon add the Philippines to the list.
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