The arrival of COVID-19 earlier this year has fast-tracked the already meteoric growth in the mobile bank and neobank industry, with stay-at-home orders globally increasing the appeal of being able to bank virtually.
According to Global Market Insights, the size of the digital banking market is estimated to have been almost US$ 8 trillion in 2019. It is expected to experience compound annual growth of more than 6% between 2020 to 2026. The research firm says total global
digital payment transactions exceeded 750 billion in volume, during 2019, at a value of more than US$700 trillion. 2021 promises to be much higher.
Mobile banking and neobanks have disrupted the financial services industry by digitalising virtually every service physical banks have to offer, and more. From Asia,
Africa and Middle East, through Europe to the America’s, up-and-coming fintech providers are creating innovative digital banking and wealth solutions that enable customers to conduct all their financial business through mobile banking or via neo-bank app
In addition to the sheer convenience of being able to bank anytime, anywhere, digital banking solutions offer their financial services providers significant cost reductions because they don’t have to fund expensive physical infrastructure or workforces and
can get to more clients.
As a result of the rapid pace of innovation that is being set by fintechs, traditional banks are teaming up with these newcomers to add on, integrate or create digital banking solutions themselves.
We identified five of the top digital banking technology vendors who are helping banks make this shift by developing white-label mobile payment platforms and other digital functionalities. These include include traditional banking services, personal financial
management, mobile payments, mobile wallets and savings and investing.
11:FS is a London and New York-based fintech firm that builds next-generation banking propositions for existing financial services firms and start-ups looking to enter the digital banking arena or extend their physical services into online and mobile banking.
The company has worked with a wide variety of clients in 32 countries and claims it can define, build and launch a new banking service to market in nine months.
It maintains it can get you to market faster with its differentiated service and by building better banking business models. Through its research, strategy, design and engineering teams focusing on the development of a digital banking proposition, it aims
to create intelligent, truly digital services that customers will love.
Mbanq, which came to market in 2016, uses software-as-a-service to build digital banking platforms for clients; either replacing legacy core systems with best-of-breed technology or setting up fully-scalable digital banking solutions from scratch. Clients
can access its digital banking technology through its white label apps and advanced, modular and end-to-end banking platforms.
Clients include banks, credit unions and financial institutions of various sizes across the US, Europe and Asia. It claims to be one of the most comprehensive and fastest growing digital banking providers globally. The company’s technology is running as
the basis of 15 banks and a further 10 banks are in the process of contracting or setting up Mbanq’s solution.
Velmie is a financial technology provider that has been on the market since 2010 delivering software solutions to financial institutions and banks. It offers custom fintech, block chain and core banking solutions, incorporating Artificial Intelligence and
handling the cloud migration, maintenance and compliance.
It was the first of the first financial technology developers to introduce enterprise blockchain technology in the financial services industry and, as such, was named Top Blockchain Agency for several years by Clutch.
Velmie builds mobile payments and banking infrastructure solutions on behalf of its banking partners and offers a white-label mobile payments platform that comes with tokenization to enable secure, traceable and real-time transactions.
It provides technology solutions to companies in the banking, payments, and trade finance sectors and has deployed its platform in the EU, Americas, Africa and the Middle East.
Uruguay-based Bankingly offers software as a service mobile, online and conversational banking solutions to financial institutions, focusing on low income and underserved customers.
It also specifically targets targets small- to medium-sized banks, cooperatives and credit unions and microfinance companies that often operate in semi-urban or rural markets.
Bankingly’s digital solutions are affordable, secure and sophisticated. Its omnichannel platform gives traditional financial solutions the reach they couldn’t achieve through their network of bank branches.
Utah-based MX offers a diverse range of digital solutions that existing financial services providers or start up banks can use to build innovative online and mobile banking and financial management capabilities.
MX positions itself as a leading digital transformation platform for banks, credit unions, fintech and partners. It was founded in 2010 and has since worked with 2 000 financial instituitions and 43 of the top 50 digital banking providers.
Its Helio mobile app gives customers a holistic view of all of their finances, along with a simple interface and customised features.
How to choose mobile banking technology vendor
In an increasingly competitive digital banking industry, the must-have features of a white-label mobile banking solution are as follows:
1) Simple, intuitive design and navigation.
A key selling point for a mobile banking solution or neobank will be how simple and intuitive it is to use. Thus the quality of the user experience and user interface is a critical determinant of whether a technology vendor is the right partner for you.
Intuitive design understands and anticipates what the user is likely to do next, making the experience of the mobile banking solution simple, functional and enjoyable to use.
2) Instant account opening and onboarding.
A digital banking solution should enable a consumer to open another account on a mobile device quickly and easily because this is fast becoming standard practice. Your technology vendor should thus be able to provide these applications so that customers
can open an account and easily apply for services such as home equity loans and investment accounts.
3) Biometric security.
Biometric features like fingerprint readers and facial recognition are becoming commonplace for digital banking customers. Thus it’s important that you choose a technology provider that is able to incorporate these advanced security features into the mobile
banking and neobank platforms it develops.
4) Seamless P2P payment interface.
Banking apps should integrate smoothly with person-to-person payment interfaces so select a vendor that offers these functionalities. The technology should make card payments to friends and family easy, fast and secure, including supporting NFC tap payment
and allowing customers to fill in their card details automatically.
5) Automated savings tools.
Vendors that offer automated savings tools will enable you to differentiate your digital banking solution from others that merely offer the straightforward banking services, including payments, withdrawals and bank transactional statements. Automated savings
tools open your business up to the personal financial management industry, which offers a wealth of other revenue-generating opportunities, including offering savings and investment solutions, budgeting packages and financial educational tools.
Digital banking solutions offer the potential to reach millions of un- or underbanked customers, as they can gear up to meet the demand. The technology systems upon which they are built need to be scalable to achieve this. Thus your technology vendor should
have a digital banking system that is modular and easily scalable, allowing you to seamlessly meet the demand of a fast growing client base.
The vendor should be able to customize the solution to your exact specifications and incorporate the flexibility you will need to adjust and add to your digital banking solution as customer needs grow and evolve. Also, with the pace of innovation accelerating
continuously, competitive forces will remain acute, and you will need to a vendor who can keep pace with advancements in digital banking and incorporate these into your existing platform.
8) API & Integrations
The vendor should have the experience and capability to handle all types of integrations with the customers’ and traditional banking systems. The vendor should also be equipped to test and train users so that they are comfortable using the banking software
and are in a position to make full use of all the functionality it offers. The technology vendor should have sufficiently designated and expert resources to oversee the integration of the software.
9) Top-notch security
The security measures incorporated into the technology vendors’ digital banking solutions need to be carefully scrutinised to ensure that they are sufficiently robust to protect users from security threats and attacks. Cybercrime is at the top of the list
of the financial sector’s major concerns going forward. Security features could include multi-factor authorisation, NFC inserted sim cards, complete end-to-end encryption and text and email notifications.
The potential offered by digital banking and neobanks is immense, with large parts of the global population un- or underserviced by the traditional financial services industry and the rest unhappy with their existing banks and looking for more convenience
and more cost-effective services.However, competition is intense, with new players entering the market regulatory, and thus you will only stand a good chance of claiming your share of market if you partner with a technology partner that understands your needs
and has the experience and technology it takes to build a distinctive and sophisticated digital banking offering. Critically, the solution must meet the security and scalability requirements that form the bedrock of any successful digital banking solution.