- Key insights: Will Artingstall, global head of digital asset payments and ecommerce solutions within Citi's Services business, sat down with American Banker to discuss the bank's banking-as-a-service business and how it fits into its larger corporate payments strategy.
- What's at stake: There has been a re‑emergence of de novo approvals and charter acquisitions by fintechs seeking to internalize capabilities previously accessed through BaaS partnerships.
- Expert quote: "What's interesting for me personally is what used to work for a treasury or a corporate-based use case doesn't always work as well for an ecommerce-based use case," Artingstall said.
Will Artingstall,
That has shaped the way he thinks about the interconnectivity of embedded payments, which are a key priority for
Artingstall's early days were spent in client sales management, followed by a stint in South Africa, where he managed the bank's liquidity business and served as the country head. But it wasn't long before the payments industry called, and landed him in San Francisco.
"I went out to the West Coast as a transaction banking practitioner," Artingstall told American Banker. "That was my first role in global payments. I helped the bank figure out what the future of our payment strategy should look like based on what our West Coast tech clients were really asking of the bank at the time."
Today, and for the last three years, Artingstall has called New York City home, where he boasts an ever-expanding remit that began with ecommerce services and has since expanded to digital assets payments and banking as a service.
"If you think about the historical position of payments, we went and sold out to a large corporate and we gave them a solution that helped them make proprietary payments, payments for [accounts payable], payments for Treasury, money movement for rebalancing [and] FX positions," Artingstall told American Banker.
"The interesting stuff in payments happens in this customer-of-the-customer space, where they use my payments to embed it into a service that's offered by a platform or by tech," he said.
That platform play opens the door for the bank to reach new customers that increasingly want to offer payment, treasury services or even digital wallets, and comes as more fintechs pursue banking charters to sidestep previously required banking-as-a-service partnerships.
"For several years post [global financial crisis], there was little activity in obtaining (or buying) bank licenses" Jefferies analyst John Hecht said in a research note. "Since 2017, given regulatory shifts, there has been a re‑emergence of de novo approvals and charter acquisitions, particularly by fintechs seeking to internalize capabilities previously accessed through BaaS partnerships."
How do you see banking-as-a-service and ecommerce working together?
WILL ARTINGSTALL: Banking as a service has two components to it, and most of those products are virtual account-based products. We've launched a virtual account wallet capability here in the U.S., that's a really exciting API-native, high speed rail, that allows me to fully embed Account Services and
And then the second one that we have is also a virtual account product, but focuses a little bit more on things like reconciliation for payment intermediaries and funding use cases. We call it Payer ID. Essentially it's a receivables product where you issue a virtual [International Bank Account Number] product. The client would pay into that virtual IBAN. We deposit into our client's traditional account, and we give them that account number as a true reference ID, so they know exactly who's paid them at any one time in the transaction.
The ecommerce horizontal is a super interesting space, and that's really led off from the fact that one of the things we came to an early realization in ecommerce and fintech in particular, they don't come to us and buy one product. They tend to buy 20, because they're trying to stitch a service together for their platform.
What we've done within that ecommerce horizontal is we've stood up a use case practice for marketplaces that allows me to think about all of the 10 to 15 products they'd use within the bank and create a true, embedded end-to-end value proposition for those customers, and then develop any products on the fringe that they may need.
How are the two different?
This is a legacy talking point, but it's one that really brings it home and resonates every time we talk about it. If you think about a ride hailing app, if they want to create an instant, on-demand payout service for their drivers, that's an API and an instant payment on the back end. "We would package that up as a service or a solution to a platform. That's the type of thing we would do out of the ecommerce business.
The BaaS product set is a lot more integrated. For example, a marketplace that wants to offer wallet services to your seller, that would build out of the virtual account wallet solution. I'm going to be able to give you all of the
In both cases, usually I have a direct relationship with the platform, and the platform has then got a direct relationship with the ecosystem participants, who are either the users on their platform or the recipients and beneficiaries on their platform.
What's interesting for me personally is what used to work for a treasury or a corporate-based use case doesn't always work as well for an ecommerce-based use case.
The resiliency expectations from an ecommerce client or a fintech are completely other level, the automation expectations are a completely other level, the ability to scale payments as a whole– we're not even talking like the same stratosphere as you would talk about with a typical treasury.A treasury making a few 100,000 payments per month for vendor payments and payroll is very different to a payment intermediary who's making millions of payments and high peaks at very specific times of the day.
For us, co-creation is a very defined thing. It's really speaking to something I've seen within a customer that I know I can co-build a product for and that I can replicate for other customers. You're really talking about alternative buying centers that are plugged into that co-creation process.
By the time it's been launched with a customer, it's commercially ready to be used with other customers. In regulated financial services, [minimum viable products] are something you do for an internal test or for a small scale project. You don't want to go through the processes you have to go through to launch a product, unless your plan is to make it commercially viable for multiple clients. The day we launch it with a customer, it's ready to be sold and ready to be packaged up, and our sales teams can usually start to position it with other customers almost immediately.
At what point in the conversation with the client do you decide that the new product you're developing is something you'll want to sell to other clients?
We prefer to do it as early in that process as we can, because what that usually does is define how much sweat equity you put into the conversation. We want to define that within the first a couple of weeks. If we don't have at least the line of sight that we can do that and sell it to multiple clients, it becomes tricky.
The reason I say so early on in the process is it dictates how you run the co-creation, because what I don't want to do is go to the nth level of bespoke building, because then that becomes a one-client solution. Whereas, if I'm thinking with the design principles of reselling to multiple clients, my vision or my perspective on that shifts, because I'm so focused on trying to think about a product that can be packaged for other customers as well.
Frankly, I've not seen us yet do a co-creation where we haven't had that principle in mind right throughout the process.
