Ditto Structuring a Banking-as-a-Service Offer

FACTS

  • Ditto Bank, French m-banking player focusing on currency management, plans a full-fledged suite of white label banking and technological services.
  • Targets: FinTechs interested in aiming for SMEs.
  • Goal: Provide FinTechs with access to the latest banking innovations, enable them to add financial services for their customers.
  • Ditto Services relies on micro-services. Through an “event streaming” architecture based on Kafka’s technology, and near-automated processes, their platform features scalable services and processes heavy loads in real time.
  • This Banking-as-a-Service platform bets on three sets of offers:
    • Account, payments and cards: scheduled by mid-2020.
    • Credit-as-a-Service: already available for short-term credit applications and likely to include other types of credit lines in 2020.
    • Compliance-as-a-Service: with capital deposit certificates fully integrated in the customer process. Identification and authentication services may be added early next year.
  • Bank increased their workforce for this launch. Roughly 50 project managers and developers (50% of their current workforce) are focusing on expanding the platform.

CHALLENGES

  • High potential market. More FinTechs are featuring SME-oriented services. Nearly 40% of the FinTechs founded over the past three years are addressing this segment.
  • Technological challenge. More often than not, these FinTechs don't have the regulatory approval or technological modules for providing banking services to their customers. 
  • This considered, Ditto bets on their banking licence and cutting-edge technology so FinTechs may add products that would require advanced technologies or regulatory compliance. They may then focus on their core business.
  • Two-fold positioning to boost their business model. Until recently, Ditto mostly was a mobile bank aiming for BtoC segments. Their BaaS offer stresses a strategic shift, and maybe a means for their business model to be more profitable sooner.

MARKET PERSPECTIVE

  • This mobile bank for travellers was launched in May 2017. Less than a year after their founder left, they lay the ground for a new Banking-as-a-Service offer.

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