The future of customer-centricity:

Embedded digital banking solutions

The future of customer-centricity:
Embedded digital banking solutions

Digital banking will undergo a complete makeover in the coming years.

Humanized experiences are now the focus for emerging fintechs
aiming to transform the market and seamlessly integrate financial
services into people’s lives.

Driven by digitalization, the recent e-commerce boom and the rise of

instant payments and online transfers, digital financial services are
becoming increasingly important.

And, it is no longer a secret that the digitalization of the banking

sector, which has already been underway for more than 10 years, has
accelerated significantly in the last two years.

But, in the wake of digitalization and the development of embedded

financial products, the integration of financial services into non-bank
products or processes has become a standard that many customers
no longer want to do without.

It is a customer-centric development that financial services are now

offered exactly where and when the need arises.

Therefore, it is not surprising that the embedding of digital financial

products is not only expected by end customers, but is also
increasingly perceived by companies as an attractive alternative when
using financial services.

Today, digital banking is more relevant than ever for B2C and B2B.
In the meantime, the majority of customers – around 73% in Germany
– use online banking, and the figures are rising steadily. And by 2024
almost a third of the world’s population will use online banking.

However, digital banking now also stands for a contrast between

young fintechs and traditional financial institutions.
Chances are high for fintechs to secure a share of the booming
payments and credit market with fresh ideas and strong verticals.

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 A hot market for even hotter ideas

The push towards digitization has led to a major Demand for mobile applications will increase,
shift in consumer behavior. especially in the areas of digital payments and loans.

As customers look for the most convenient ways to Two things that are still paying off in this expanding
make their purchases, their shopping habits have market: Be better than the competition with the
gravitated naturally to the Internet, where offers can same idea or, even smarter, combine an existing
be personalized and timed to customers’ preferences. idea with new verticals.

In Germany, over 22% of consumers can be In many parts of the digital banking market, there
described as “heavy online shoppers”, as they shop are still large gaps that can be closed. Embedded
online at least once a week and make over 50% of financial products are becoming a building block
all purchases via online orders. for success. The keyword is specialization.

From this point of view: The assumption that the From SMEs to B2B to freelancers, all markets are
market is already saturated with financial service still underserved when it comes to digital financial
providers and smart digital banking solutions is wrong! services. Customizable company cards, lending or
employee accounts are just emerging in these
A recent study from April 2022 summarizes the areas. The key is to identify and respond to a
development of the fintech industry in recent years current trend in digital banking.
as follows: As early as 2019, more than half of the
private customers surveyed in a global study want
to use fintechs for payments and just under a third
for loans - in each case a multiple compared with
the base year 2015.

The market is far from cooling down and actually

growing faster than ever before.

Other recent studies also conclude that the market

will grow strongly from 2022 to 2025 with an annual
growth rate of over 25% in the fintech sector.
Predictably, the volume of transactions is
skyrocketing and financial service specialist
Lightyear Capital estimates that by 2025, the
amount of additional revenues financial services
providers could earn from embedded finance is an
eye watering $230 billion in the US.

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How can fintechs scale?

From digital banking and lending to retailing and Our top five strategic tips on
insurance, there is a seemingly endless list of new scaling a fintech:
financial services, all of which are reimagining
classic business models or bringing something
entirely new to the market. ▪ Put the customer’s requirements first
And, fintechs have something ahead of the big and
long-established financial giants, no legacy IT and ▪ Stay agile: Internal culture is key
no silos. And ideas can be implemented quickly – a
great advantage when it comes to digital banking.
▪ Spend most of the money on technology
So, if a fintech company includes financial services and hire a first-class CTO
into its business model at the right point and time, it
can benefit greatly. The same goes for e-commerce
platforms, digital infrastructure providers or even ▪ Be a data driven business
insurance companies.

This can have a very positive impact on customer ▪ Build meaningful partnerships – it is not
loyalty and increase the number of customer possible to do everything alone
touchpoints, which generates additional revenue.

Eventually, many touchpoints with customers lead

to demand for accounts, while high basket values
make consumer loans attractive.

The key success factors for a prosperous fintech

are customer satisfaction, but also
contextualization and the seamless integration of
financial services to provide a flawless end-to-end
customer experience – of course, with any product,
branding must be the center of attention in addition
to impeccable services.

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Hands-on examples

Vivid
A look at Vivid and Tomorrow – two of the most innovative neo-banks and partners of Solaris – is a
good indicator of the development of digital banking.

For example, Vivid offers an unparalleled neo-banking experience for consumers. It‘s packed with
features ranging from multi-currency accounts to stock and crypto investing.

However, building an entire neo-bank from scratch in a crowded market with fierce competition and
high customer acquisition costs introduced quite a few challenges and a strong partner was needed.

Vivid required a licensed banking partner that could stem the regulatory obligations and help
Vivid hit the ground running. For the launch to succeed the partner would also need the technical
capabilities to cater to Vivid’s wide range of features and speed of execution.

As a one-stop shop with its own product and technology platform, Solaris could easily meet
these requirements.

–
With Solaris’ powerful Baking-as-a-Service platform, we found the
optimal partner to conquer the European banking market. With its
modular approach and an easy-to-integrate APIs, we reduced our
time to market significantly and built a competitive offering at scale.
–
Dr. Joerg Geiben
Group General Counsel of Vivid Money

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Hands-on examples

Tomorrow
Tomorrow is a champion of sustainable mobile banking and has some of the strongest verticals
in the market.

With Solaris’ digital banking APIs, Tomorrow is able to offer its customers a modern mobile
banking account complete with SEPA credit transfers & direct debits, real-time push notifications
and automatic categorization of transactions, all without having to obtain its own banking license.

And, what’s best: Customers can get a debit card made entirely of sustainably sourced wood – an
eye-catching statement for a plastic-free world.

Speaking of strong verticals - the more customer-oriented and tailored to a specific target group,
the more successful the offer. It is maybe not possible to reach everyone, but the customers who
feel addressed are all the more loyal.

–
With its fast processes and well-establoshed technology, Solaris is
the ideal partner for us to implement our mission: to bring
sustainable banking into the mainstream.
–
Jakob Berndt
Co-Founder of Tomorrow

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 How to build your own banking service?

If you want to offer your customers the full range of Plus, a recent study by EY highlights that a key factor
banking services - from basic accounts to credit in effective collaboration is the need for coexistence
products to financial advice - a full banking license and interdependence, especially if fintechs
is the way to go. The downside is that it comes with cooperate with a Banking-as-a-Service provider.
stricter ongoing compliance requirements, a large
time and cost commitment, and high annual fees. With Solaris it is only a stone’s throw from idea
to implementation!
In contrast, an e-money license limits what you can
and cannot do, but gives you the flexibility to make With our API-based Banking-as-a-Service
the most of the technology. So it is a good choice if platform, any fintech can build its own digital
you want to exclusively offer multi-currency digital banking product with a high degree of flexibility and
accounts, electronic wallets, or products for a fast time to market.
specific industries. However, this might prevent you
from scaling fast and exploring other possibilities. With our customer-centric banking services, scaling
is easy as we provide our regulatory expertise and
Therefore, to start building your own banking compliant banking solutions to our partners.
service, a strong partnership is required if a
company does not want to do the heavy lifting and We can also help fintechs identify customers in an
invest time and resources in acquiring its own instant with our proprietary Bankident solution. Fully
banking or an e-money license. compliant with German anti-money laundering laws.

Whether you need a provider with a full banking What’s more, we have all the solutions to complete
license or an e-money license, Solaris can help any any fintech offering: Cards, accounts and sub-
fintech company to build its own banking service. accounts, limit setting, deposits, withdrawals, and
if you really want to go all in you might want to take
a look at Securities Brokerage or crypto and
banking combined.

By the way: We are a pure B2B2X company and do

not compete with our partners when it comes to
end customers.

Find out how you can work with us and expand

your product portfolio with perfectly tailored
financial services. Take our survey so we can
evaluate your needs.

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Thank you!

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