10x’s Chief Client Officer Tam Holmes recently joined an Innovate Finance panel to discuss how Banking-as-a-Service (BaaS) can help banks transform their approach to customer engagement and address industry and legacy challenges.
In the webinar moderated by Tom Graham, Accenture’s Managing Director of Banking, Tam was joined by:
Tam discussed some of the client activity 10x is doing, including its BaaS work with Westpac in Australia.
"We provide a cloud-native core banking platform and offer services for retail and business banking."
"Fundamentally, the aim of the platform is to help banks organise their data better so they can make better decisions for customers in real-time at lower cost."
"What that allows us to do is partner with banks who either want to transform their existing businesses … or want to build a transformational new business.”
"We have a very unique mix of banking and technology experience in the team. That has allowed us to work with some really amazing clients, including large global tier-ones.”
"For a bank you have got to this cost-income challenge. Banking-as-a-Service for banks? They have really got to look at it as a new, interesting and potentially long-term strategic revenue stream.”
Tam said the 10x approach is to consider what services it can offer a bank to enable them to add additional revenue streams into their own approach. BaaS clients tended to fall into two camps: One looking at how the bank can bring new revenue streams to market and improve its P&L The second is working to test and pilot new BaaS services as an operating and technology hedge for the bank’s back book - with a view to ultimately migrating its back book onto the new technology stack.
“That’s the sort of clients we are talking to – doing one of those flavours or both. We see this as a growth part of the market.”
On whether industry interest is about new products or lowering the cost to serve?
"It's genuinely a bit of both,” said Tam, citing an example where with an airline loyalty scheme instead of a consumer having to spend their loyalty points on flights or a curated set of products that they might not want, they could perhaps have a Mastercard or a Visa payment card and be able to spend money on things they do want.
"That is quite a different proposition for a consumer who may take more interest in the loyalty scheme that the airline is offering."
"Banks are going to have to transform themselves to enable the change in the fundamental economics of banking that is required in the next five years."