HSBC will launch a Banking as a Service (BaaS) offering to let customers create and provide business banking services through their own platforms.
The bank is working with Oracle NetSuite to provide international payments and expense management services embedded into NetSuite’s new SuiteBanking solution. NetSuite customers will be able to automate accounts payable, accounts receivable and reconciliation processes, so users can pay bills, send invoices, get paid and have cash flow visibility.
This development is not just about the UK market.
Barry O’Byrne, CEO, Global Commercial Banking at HSBC, explains: “Embedding our solutions into our customers’ platforms is central to our strategy of supporting our clients’ growth across all regions, from Asia to the Americas. We envisage this to be the first alliance of many.”
Evan Goldberg, Executive Vice President of Oracle NetSuite, adds: “SuiteBanking is the first step in bringing the worlds of ERP and fintech together. It will help our customers automate all of these processes in one single suite, while increasing visibility and control, so they can maintain healthy cash flow as they grow.”
With this proposition, NetSuite “would become the first major ERP suite with natively-integrated banking solutions”.
HSBC intends to broaden its BaaS offering with more solutions, including HSBC Global Wallet, its multi-currency digital wallet for making and receiving international payments.
This BaaS offering will use the bank’s APIs to embed its solutions in clients’ own platforms. HSBC launched its API Developer Portal in June this year, providing developers with access to a range of HSBC’s API solutions, and a sandbox environment for testing.
HSBC is the first SuiteBanking alliance partner.
At the recent Sibos 2021 conference, Finastra, Visa, SAP and HSBC talked about the rather juicy BaaS market. The view was that the market is “not embryonic” – but is presently looking at use cases.
According to Future Market Insights, the demand outlook for the BaaS platform market remains “impressive” as it forecasts sales to surpass $12.2 billion (£8.88 billion) by the end of 2031.
In other news, and last month, UK challenger bank Starling has plans to make its BaaS solution offering available in the EU, including France, Germany, the Netherlands and Spain.
It’s aiming for H1 2022, subject to regulatory approval.
Described as “Starling as a Service”, the digital bank said it will enable businesses to build their own financial products on Starling’s platform, such as savings or current accounts, integrated digital wallets, kids’ cards and debit cards.
Starling handles the technical and regulatory demands behind the scenes, while the businesses take care of their customers with embedded banking solutions.
The challenger launched BaaS in the UK in 2018 and has 25 payment and banking services customers, including Raisin, CurrencyCloud, Moneybox and Vitesse.