Setting its sights on the Australian market with new office openings this week, plus a fair weight of institutions using its digital banking platform, Dutch fintech Backbase talked to this news service about where wealth managers fit into this digital rearming brought on by the pandemic.
The march continues for digital banking software provider Backbase as it launches new offices in Sydney and Melbourne this week, tapping the growing Australia and New Zealand market. The Netherlands-based fintech recently opened a Singapore hub to manage growth in Asia Pacific.
Global research group IDC has forecast that a 100 new financial institutions will set up in the region by 2025 as Asian markets continue to liberalise and issue new licences. Although the ‘big four’ banks in Australia and New Zealand are expected to stay dominant, in spite of a rocky time with regulators over money laundering, digital challengers look to mop up some of the 35 per cent of total budgets that Tier-1 and Tier-2 banks are reportedly intending to spend on digital upgrades for customers in that region.
This news service spoke to Backbase’s business strategy lead Tim Rutten about what wealth management clients are demanding of fintechs now that the pandemic has put digital services in the full industry glare.
Rutten says since the crisis, the conversation with private banks and wealth managers “isn’t about a project taking a few years anymore but how can we get it live within six to twelve months.”
The firm has around 150 banks using its platform and has seen a huge spike in digital usage from business retail and private wealth clients over the last few months. “We have never had so many RFPs coming our way," he said, with some delight, over a video call. "Banks and institutions are waking up that ‘we need to go even faster, and let’s not build it ourselves, let’s not kick the can around and wait,’” he said, capping the momentum felt by many wealthtech firms as COVID-19 becomes the mother of all disruptors.
Regarding interest in the platform from the wealth sector globally, Rutten says he hasn't "seen any regions that are behind the curve,” adding that not a single institution working with the firm has put the brakes on a project in a “wait and see” approach.
At the height of lockdown confusion, technology and telco providers availed themselves as governments dispersed billions to keep businesses and economies afloat. Backbase said that it worked with dozens of US institutions early on to get initial funds disbursed inside a week. Likewise in Canada, it helped firms using the platform to arrange mortgage holidays and refinancing.
But it saw the biggest push in consumer banking, where seven times’ as many users were onboarded among its retail clients.
Fears over privacy and cybersecurity from the flood to home working and new digital accounts being created has already caused a surge in fraud activity. Questioned about security and privacy issues arising from all the fast tracking, Rutten said it hasn't been a challenge from a pure tech standpoint. "The checks are all there and all proven in many different markets. But it has been a shift for wealth management. Adding a new client to a wealth firm, the KYC flow is a bit more extensive. There is KYC, AML, and all these identification verification elements, depending on the region. Then there is regulation."