How product banking factories advance ‘uberization’ of fintech

The financial services companies and their fintech vendors are rapidly entering new reality of the on-demand and peer-to-peer market model. This ‘uberization’ of the industry or so - called ‘sharing-economy’ stimulate the emergence of marketplace banks - an alternative way to traditional banking. The marketplaces start attracting many companies due to its promises of softer regulation and greater flexibility for all parties involved in the economy of scale. BankEx, a product banking factory based on the principles of crowdsourcing, encourages the idea of Uber and blockchain to bring in more efficiency in the interaction and cooperation between banks and fintech vendors. As envisaged by BankEx the banks as a platform or marketplace will very soon transform the world economy shifting focus from efficiency of coordination to the efficiency of production.     

As a marketplace exchange, BankEx, strives to give the world what it needs – fast, convenient and reliable model of products’ formation, delivery and sales which ultimately leads to better customer experience in the sphere of financial services. Igor Khmel, Founder and CEO of BankEx, shares his vision how bank as marketplace concept will drastically change the fintech space in the nearest future.

“It’s obvious that marketplace approach to business is achieving widespread recognition in the industry giving rise to such platforms as Fidor, OpenBankProject or P2P-credit platform Lending Club,” starts Khmel. “BankEx is formed on the ideas of flexibility and decentralization where market players are divided into the bank-owners of products, service-players and financial showcases. We play the role of a marketplace (auction) organizer providing necessary technology for companies to unleash their liquidity and make their money work for them. The products created and traded through BankEx pass the standardization process powered by us. Important to mention that none of activities on BankEx require licensing.” 

In fact BankEx provides the necessary technological infrastructure for the creation of the products and connection of financial institutions with corporate clients and non-banking sale channels. Operating under the principles of fintech labs the participants of BankEx can build a variety of fintech products in relatively shorter period of time, with less people involved in the production process. In BankEx vision the product is considered ta combination of technical and controlling teams, venture capital and/or anchor client. The crucial advantage of the marketplace like BankEx can be the opportunity of cross-selling and investment risk reduction in the authorized capital. In terms of financing there is no financial exposure for BankEx. The portion of BankEx in each product ranges from 25% to 75% pre-money.

“In contrast to traditional banking our marketplace exchange offers a number of benefits to banks and fintech vendors,” comments Khmel. “First of all participation in BankEx softens the requirements of the regulator as banks get flexibility of their reaction to the changes in capital requirements, asset\liability position as well as temporary sales needs. We enable our members to manage portfolio growth and expand salesforce without damaging client experiences, making CAPEX investments and spending a lot of time on product launch. Instead banks can buy and sell the required asset\liability or salesforce service leveraging BankEx products and technology.”   

“Secondly we help players to separate the technical part from the operational one. And the main thing is the environment of BankEx that empowers players with more flexibility and consideration for the interests of all parties with economies of scale and growth. We optimize the business functions of all the participants bringing together product sellers and buyers in a single place with maximum value for business and client and minimum number of intermediaries involved.”

Currently BankEx is working on the following product marketplaces:

FinDelivery – a courier delivery of financial products. A market connecting banks with couriers and external sale channels, controlling personnel as couriers.Technology: outsourcing and optimizing logical flows. Competitors in this market include KartaNaDom, BC-Express (Credit Europe bank) and TinkoffBank in Russia. - automatic booking of the exchange rate through a messenger (chat-bot) for cash currency exchange.

Installment Payments - credit lines for loyal e-commerce clients, similar to PayPal’s service The current industry participants in this area include MFO specializing in POS-crediting, such as Revo as well as credit cards.

Exchange Market for Deposits of Corporate Entities - placement of short-term 2-week deposits for small and mid-sized business through auction in banks using individual rates.

SME crowdlending marketplace - a decentralized inter-banking platform for small business, an alternative to Funding Circle in UK.

Refinancing of short-term massive unsecured loans (MFO, POS, crowd, PayDayLoans). A rival to BlackMoon, the crowdfunding for balance sheet investors known as “marketplace lending as a service (MPLaaS).”

Credit Assets Exchange Market – an exchange market for factoring, leasing, mortgage and other non-standardised credit assets. The similar projects currently operating on the market are FundBox in the US or MarketInvoice in UK.

“The main goal of BankEx is to make banking agile and products more fitted to the customer needs,” concludes Khmel. “We come up with the products that our clients need right now, and structure these products in the way suitable for traditional banks and finance companies. We are also involved in banking, but we have no plans to become bank ourselves. This is our strength, BankEx doesn’t compete or disrupt banks, we partner with them for greater efficiency for the end users and industry as a whole.”  

BankEx is currently looking for banks-partners for collaborative work in the US, Western Europe and Singapore.

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