Learning Objectives/Key Takeaways:
- Uncover multiple ways banks can approach BaaS.
- Learn about the value of OneKey Banking and being part of a network of banks.
- Discover how this model supports the emerging needs of fintechs and enterprises alike.
Jeff Noaki (00:09):
All right, thanks for everyone for joining us. We're here to talk about the partnership between Treasury Prime and FIS and joining the network.
Barbara Negron (00:22):
Hi everyone. I'm Barbara Negron. I'm Senior Director of Product at FIS.
Jeff Noaki (00:29):
All right, so a little bit of agenda, what we're going to be talking about here for the next half hour. We'll, we'll try to wrap up a little early so you can get to lunch, but talk to you about who Treasury Prime is and who FIS is, what our partnership looks like, some of the new products that we're rolling out, particularly our one key banking product, how FIS leverages the Treasury Prime partnership and brings our mutual product to market. And then some outcomes. And then we'll open the floor for some Q and A overview on who Treasury Prime is. We are banking as a service operating system and marketplace. We are built bank first. We are here, we're banking as a service platform that is of the same elk for a bank to go out and partner or purchase a online banking system or a LOS system. We are a platform for the bank to run a bass program. We have a phenomenal sales team. Some of them are here today in the back corner out there, drumming up business on the FinTech side and to bring leads to the table for our banks in partnership with FIS as well. But make no doubt about it, these are the bank's programs, the bank's relationships, your compliance, your charter that is powering these things and we're the software to help you do it.
Barbara Negron (01:58):
So, a little bit about FIS. So FIS is a leading provider of technology solutions. We say that we are the way we want to lead, the way that the world banks, we are the number one merchant acquirer. We partner with over 90% of the global banks in some aspect. We are broken up into three different main areas. Our merchant processing, our banking platform where we offer core banking services as well as payment rails for money movement, whether it be ACH and wire and debit cards and credit cards. And we also have our capital market space where we are funded the majority of the capital market money movement in the world. One of the other things that we are focusing on, and one of our largest focuses is in working with Treasury Prime is our embedded banking and banking as a service platform. So we're building out an ecosystem platform, including as a service, as our main foundation and where we partner with Treasury Prime.
Jeff Noaki (03:07):
Just a little bit about Treasury Prime and FIS and coming together. FIS has a phenomenal product set, great payments opportunities, and a thriving bank network. So with Treasury Prime partnering with FIS, it was a match that really helps bring our mutual products to market a lot faster. We're teaching our banks that are opting into these programs how to do banking as a service, how to do embedded finance, what things to look at, how to bring clients to the table, as well as partnering with FIS and some of the additional products, example on the card front with their payment payments one product and bringing that to not only FIS banks, traditional FIS banks, but non FIS banks too that we're partnering with that can be leveraging some of those card programs. And I think that's the thing that is really the secret sauce here is bringing additional power of the FIS ecosystem. It's new banks, more banks that aren't maybe traditional with their core.
Barbara Negron (04:19):
I think for FIS, one of the reasons that we chose Treasury Prime to partner with is the bank first mentality that we found is very important. Like I said before, we partner with 90% of the banks globally in the world and we found that keeping banks in the forefront and giving them the same power to be able to be part of this banking as a service world was very important for us. Here at FIS, we treasure our bank partnerships and we have quite a large network of banks that we partner with in multiple aspects, not just on our core banking side, but our payment sites. And knowing that Treasury Prime makes very a priority, the banking relationships was important to FIS to move forward.
Jeff Noaki (05:08):
So I want to talk to you a little bit about a new product that Treasury Prime has rolled out and is live in the market with today. And it's our one key banking product. One key is a product that allows a large FinTech or embedded finance opportunity to partner and have relation direct relationships with more than one bank institution, but have one tech integration, have one technology layer that helps them power their program on top of more than one bank. Now this is an obvious benefit for the enterprise, especially with everything going on in the space. There's not a single point of failure for them in their mindset. They can safely and soundly partner with some of the community banks here in the room and not have to go to their boards and say, Nope, we have to be at a money center bank for safety reasons. Instead, they could partner with 2, 3, 4 different community banks and launch and run a quality program. That benefit is clear for the banks. This is really what we built and we built with the bank First mindset here where banks can help participate in run programs together. Just like you all out in the room, probably participate in loan loan arrangements with other institutions that you've built relationships with all day long. This is a very similar mindset of participating in large deposit opportunities when you're thinking of a embedded finance client or a bank as a service client that has a couple billion in deposits that they're maintaining over different verticals. Maybe some a little bit is in commercial, some in consumer, some is in small business. And each bank that's participating in these verticals could stick to what they're traditionally good at. If you're traditionally a consumer bank, those regs, those rules, why stretch yourself into an SMB or commercial when you can pull in another bank to do that side of the relationship partnership as well. And then you as a community bank, you're partnering and you're participating in an extremely large program that otherwise maybe you wouldn't have access to. And this is, I think for us, something that we see as a huge benefit to the future of community banks participating in the bank of the service or embedded finance space. Anything you want to add Barb on that one?
Barbara Negron (07:27):
Sure. In talking to our bank partnerships regarding the one key banking, what we're finding is this allows them to be able to enter the network space, be part of the FinTech banking world without going over what they feel is their expertise. It gives them an entry point where they can be part of a network with the technology behind it and being able to offer their services out while leveraging and their existing knowledge and what they do best. To Jeff's point, we find a lot of community banks that are looking for an entry point, a scalable way for them to be able to enter the market. And this one key banking does that for them.
Jeff Noaki (08:03):
That's right. Really making it so you don't have to chew off everything and you can really stick to what you're good at is the main point here on this one. Alright, how FIS leverages Baas.
Barbara Negron (08:18):
So why FIS Clients work with Treasury Prime? So what are we finding? What are our community banks and what are our bank sponsorships looking for? They're looking for increased deposits in this space. This gives them an ability to bring deposits into the bank at a lower rate. With the lower deposit acquisition costs. They're able to spread deposits across the network with the one key banking. And then I think one of the biggest pieces is for those banks who are interested in working with as becoming or creating a separate line of business for their FinTech banking. This allows them to accelerate their time to market. With our partnership, we were able to leverage and create an already existing ecosystem leveraging our core platforms and our backer offer services. What we like with working with Treasury Prime is that it's FIS products letting first. So we not only work with the treasury Prime who owns the platform, but we own the backend services as well and we own the relationships with the banks. That gives us a unique position to be able to offer these services and accelerate the time to market. And then for banks, what we're finding is this allows them to remain competitive in the digital age. As you see the evolution of banking, this allows you as a bank to be able to go to where the consumers are today and where they're doing their financial services. I think there was a time that we did that by building brick and mortar branches in a location where you wanted to target customers. Or as bank evolution evolved, we went to digital and then mobile. And this is just the next evolution of banking where you're offering your services to where the consumers are at. And this allows us, this platform allows us to be able to enable banks like yourselves to be able to do that and offer these services out to these FinTech partnerships with us and Treasury Prime. We can do that with our suite of products and enable it to Non FIS bank clients who want to offer these banking services without having to jump into the regulatory and compliance base by getting a charter or MTL to be able to offer these money movement services. So this is how we leverage the treasury Prime platform in the backend. We have the products, we have the bank relationships, and this synergy and this ability to bring it to market at a faster scale allows our banks to be successful in this space.
Jeff Noaki (10:39):
And if you're a bank out there thinking about entering in this category but don't know where to start, that's what we're here for as well. Not only are we software that we're bringing to the table, but we're education. We're consultants essentially in the space to help you get your business and business line up to speed. We have a number of contacts that can help you on the compliance front that we can bring to the table. And then on the sales side, FIS has a phenomenal merchant business. So that is a category that we can absolutely help bring clients to the table for you. They're going to be your relationships, your contracts, your programs, but who doesn't want some help with lead Gen? And that's what we're here to do on that piece. So the future of the partnership, we've talked a little bit about FIS product suite and enabling that inside the treasury of Prime APIs and expanding it out to the ecosystem that is just going to continue. We've talked a little bit about payments. One, FIS has some great opportunities on the UI aspects of it to in creating widgets for clients who don't want to necessarily take on the full front end build on the FinTech side, but want to dip their toes into the water of offering products to their end users. And that just opens up the market to you, the banks, and it just expands who you can offer these things out too.
Barbara Negron (12:12):
Yeah, I think we have a very aggressive roadmap as we look into the future. We have the benefit of working with both sides of the house. As Jeff said, we have the merchant side, which is it's a distribution channel for us to be able to offer these services out to FinTechs. They drive the demand of what the market is looking for. We just sat in, heard a session about real-time payments enabling these types of products within our platform to be able to leverage it out to our third party fintechs to be able to ingest these types of products is what makes this partnership work. Real-time payments, credit card offerings, as Jeff said, the UI piece that gives them a faster, quicker scalable rate. The way we are looking at it in the FIS side on the FinTech side of the house is we define a FinTech as anybody who wants to enable any product or services, whether it be a merchant or e-commerce business. It's not just the banks of the world. It's a larger scale offering. We've seen sports affiliates, gaming networks who want to offer additional payment processing. All of these types of different third parties who can enable some type of money movement or debit card facility, whether it be with loyalty, all of those backend products that we typically sell to banks can now be leveraged and entered into our roadmap to be offered out to third parties. And these relationships that we have allow us to do that and at a quicker pace, which is why we see the future of the partnership being so effective.
Jeff Noaki (13:44):
A lot of these relationships, the bank should really look at these as new distribution channels for you to get your banking products out there into the market, into the hands of the end users. But just because those are different distribution channels doesn't mean that you won't have the same controls, the same oversight, the same tools at your disposal to manage programs safely and soundly. And that's what we're here to do. When I said we were built bank first, I'm being truthful with that. And there are all the tools that you would expect in your traditional business line for maintaining and controlling these programs safely. You would have here as well. You have full visibility into everything happening on every end user account. You have full visibility into all KYC and KYB processing. So this is where if this is done properly, this can be very fruitful for you as the banks and who's looking for new deposits or new revenue streams coming to the table.
Barbara Negron (14:41):
I think that's an important point that you're bringing up, Jeff. I think it's still having control over your compliance and regulatory piece is very important in this day and age and being able to leverage this ecosystem to be able to offer these services out while not losing the control of your compliance. Ultimately, it's the bank's charter, right? And having the ability to manage it and not give a third party if you so choose. If you want to do that as well, that is also an opportunity. But this gives you the flexibility to keep that in-house and be able to manage it appropriately so that you're always in control and always build these relationships with these third parties beyond just this partnership. I think that's an important point that I think is very important. We are finding more banks and banks who are wanting to jump into this space but still not lose complete control of their regulatory and compliance in their charter. Yeah.
Jeff Noaki (15:39):
All right. So I think we've got some time for Q and A if there's any questions? Sure.
Audience Member 1 (15:59):
So I noticed that Treasury Prime offers, for instance, APIs for credit card issuance and credit card management. Now, if FIS also has its own credit card, I mean you are a issuing processor. How do you work with Treasury Prime in that case?
Jeff Noaki (16:23):
Yeah, so Treasury Prime is not a issuer processor. We are not a payment gateway. We're not any of those things. We really are the software in between, we're the connective tissue to those products. So where FIS has the card programs, we are just exposing out their APIs in our developer portal for a FinTech or embedded finance client to come into and connect to easily.
Barbara Negron (16:50):
So I'll just add a little bit to that. So as part of the payment processing, as I said before, we have a lot of the products and we have a lot of the relationships with the banks as the treasury prime. So third parties like fintechs who want to offer these debit card services or these credit card services, they need some type of partnership with the banks. I think we found that in the beginning of this FinTech space, many Fintechs thought that they could disintermediate the banks, they could become the bank. And I think they found as the time progressed and they started to do this, they found that not to be true because they need to understand the regulatory and compliance space. So though they can maybe want to purchase these debit card processes directly, they still need the relationship with the backend process, the bank and the backend processor to enable that. So with Treasury Prime, we're able to expose the APIs in a way that's easily ingested by these third parties. So they do not become the processor, but they're able to run these platforms within their services using our processor, our debit cards, and then leveraging the bank sponsorship. So it's truly, I would say a tri-party, right? It's a relationship with between the three parties so that everybody's successful, both the banks because it becomes a new distribution channel for them to bring customers into the bank market. The fintechs are now able to add these services to their end customers where they're building a relationship and servicing their end customers. And we sit in the middle together to enable both of these parties to be able to be successful in this space.
Audience Member 1 (18:26):
If I may ask a follow up question to that. So basically the FinTech then has the choice to use FIS through treasury primes, APIs, which they will expose as the issuing processor or use a third party endpoint. It's up to the FinTech. Is that a correct?
Barbara Negron (18:45):
So the FinTech, what we do is that we create a partnership. So we introduce these fintechs to these sponsor banks, and then we are enabling the bank's products through the platform. Now we have the relationship with the banks that we enable the banks to purchase these products, and then it's enabled through the platform. That's right. But really it's really a relationship that we are building together between the third party and the banks.
Jeff Noaki (19:10):
And it's not just about the API for the FinTech to consume, it's also about the bank console and the bank admin portal. No, that Treasury Prime is presenting all that information for the bank to have full control and oversight of these programs.
Barbara Negron (19:23):
I think that's an important point. As part of this relationship, they have dashboards, you have the FinTech dashboard so that the fintechs are getting visibility into their, what's happening. I think we're finding more and more with our third party fintechs and our merchants, that data is becoming very important to them for them to be successful. I think we all know data's king, so having the access to see how their customers are transacting on a day-to-day basis allows them to market their end customers at a better scale. On the other end, the banks are also getting their dashboard where they're seeing how their fintech's part partnerships are working. It allows them to control and be able to navigate their FinTech business as well. And they have access to the data through the platform as well, which allows them to be successful in the space.
Jeff Noaki (20:07):
And then on top of our dashboard, treasury prime packages up all the transactions that are happening and going through and we're partnering with, whether it's you're already in-house transaction monitoring platform or we have a couple preferred partners on that front that all that data would go through for you guys to have on the transaction monitoring front as well. Yes.
Audience Member 2 (20:42):
Thank you. I wanted to build on the last comments you just had about the data itself. So you spoke about dashboards, but tell us a little bit more about the data that's kind of going in through these systems and who has access to them. Sure. How each of these partnerships can use that data to build their own relationships. As there's partnerships, most banks and others want to build their relationships with their end customer. So how does that all work?
Jeff Noaki (21:13):
Yeah, so the data that's coming through, particularly for the bank, it's your data. The bank is owning that information that is coming through, whether it's from transactions or end user data or clients and stuff like that. But it's also partially owned and maintained that could or could be accessed by the FinTech. So the FinTech or embedded finance client who's bringing that client to the table, who's offering up these products in their brand, but powered by you the bank, that information is then Parson available to both parties, but it is distinctly separate. So one FinTech won't be able to have other fintech's information within the bank. It's very much a parent child relationship. The bank has, a parent gets access to all programs and all data while each FinTech only gets access and information of their own. Does that answer your question?
Barbara Negron (22:12):
Complex. Well, I think for the bank, depending on how you build the relationship. So I think what we find is that each one of these fintechs and banks are building a relationship as well beyond what we are doing with them. So it's a direct relationship between the FinTech and the bank as well. So if a bank views it as a distribution channel, as Jeff said, it's like another line of business where you're managing the relationship and the accounts within that line of business portion. I think the tool that's being provided allows you to keep it if you so choose in a place where you can manage it and edit easier scale, because everything is all in one area to manage. If you view it for the FinTech space, they are truly what are driving customers into the bank. They're what driving the customer base. It's going to benefit both the FinTech and the bank if the FinTech is successful in this area by bringing more deposits and more transactions into the bank based on their success. And then allowing it to keep it in one succinct place for the bank allows them to manage it at a sim easier scale.
Jeff Noaki (23:23):
And your point's taken on the complexity and the oversight of the FinTech and that's fair. But having the bank and these clients work together on programs. So you want those Fintechs embedded finance clients to have that data so you can work on fraud together, you can work on transaction monitoring together. You can have safer and sound programs by partnering on this front and not just keeping everything to the bank. Any other questions
Jeff Noaki (24:00):
All Right, I think it's lunchtime. Thanks everyone. Thank you.