4 minute read
Today, I am overjoyed with our launch in three new growth markets: Italy, Spain and France.
While we have already been serving these markets by means of “passporting” individual services under our German banking license, we are now taking it one step further. Through setting up dedicated entities and offering local IBANs in these three new markets, we firmly anchor ourselves in their respective domestic financial ecosystems, allowing us to offer our partners services that are tailored to the local market requirements while also generating high engagement with end customers.
This marks a massive milestone for Solarisbank, and cements our position as a pan-European Banking-as-a-Service platform. Having worked fervently on pushing this over the line with our talented team, I want to take a moment to savor this achievement and reflect on how we got here.
When I joined the Berlin company builder finleap close to seven years ago, “fintech” was still a buzzword in Germany. Today, the German market has turned into a fintech factory, pumping out one success story after another. Solarisbank is among these rising stars. But when I think back to those early days, I couldn’t even begin to imagine that we would reach these heights one day, let alone in such a short period of time.
At the time, finleap was building and scaling new fintech ventures at a rapid pace. However, we kept running into the same hurdle: there were no licensed banking providers in the German market that could cover the compliant handling of payments and deposits that also had the technical capability to integrate with digital applications. Applying for a banking license for each new venture individually was not a scalable option - the capital requirements and regulatory overhead required for an application are simply too immense. finleap needed a partner on eye-level.
So, the idea for a Banking-as-a-Service platform was born: a licensed bank that could provide modular banking services to other businesses via API, so that those businesses could offer financial services in their own branding without having to apply for a banking license themselves.
So, there we were, sitting in finleap’s office, brooding over the idea of a Banking-as-a-Service platform. What structures do you need to set up a bank? What are the steps in obtaining a banking license? And was the Banking-as-a-Service model really going to fly in practice? How could you make it scale? We had no clue at the time how far we could to take this idea.
We were successful in obtaining the license from BaFin, a milestone I am still incredibly proud of today, and launched Solarisbank in 2016. It was an adventurous time, with a handful of people doing everything from sales and operations to fixing the printer.
Only along the journey did we recognize the disruptive potential that we had unleashed with Solarisbank. The trend of embedded finance, i.e., the integration of financial services into the products of non-bank businesses, as can be observed with Walmart, IKEA, Google, Samsung and hundreds more, is still in its infancy. By helping to drive this trend with our technology, we have long surpassed our initial ambitions of building a bank for fintechs. We are also no longer a just a handful of people, but an interdisciplinary team comprised of over 60 nationalities, organized across multiple business units, and impacting the lives of millions of end-customers.
With our geographic expansion to Spain, Italy and France, we are now are now pushing the embedded finance trend to an unseen level of international scale. We believe that there are over 500 million accounts up for grabs in the European market, and with our pan-European strategy, we are giving our partners the tools to win these accounts.
We opted to launch all three markets simultaneously, and managed to complete the launch in less than a year – something our consultants told us would be impossible. On the one hand, the parallel launch provides our existing partners in Germany with uninhibited access to Europe’s biggest markets. On the other hand, the broad geographic coverage also gives us an additional competitive edge for attracting new business.
That’s not to say that it’s only been a walk in the park. Building up three new entities in parallel while also ensuring that business at home runs smoothly was a tour de force. This required coordination between dozens of external stakeholders, including regulators, lawyers and countless further third parties. Only thanks to the incredible commitment and extensive experience across all of our departments at Solarisbank was it possible to pull this off while also tending to “business as usual”.
The first services we are offering with our local IBANs in Italy, Spain and France are our digital banking and cards services which will be followed by our comprehensive suite of digital lending and buy-now-pay-later services. This way, we enable our partners to leverage the full extent of our banking license in every single market, giving them the tools to monetize their users and gain an upper hand over their competitors.
We are very optimistic about the potential of the three new markets for us, especially considering how different the initial conditions are to when we started Solarisbank in Germany five years ago. After all, back then we didn’t yet have the backing of the world’s leading Investors, a cloud-based core-banking system and a team of over four hundred engineers, entrepreneurs and bankers. What we did have, however, was passion. And it’s that same passion that we are now spreading across Europe.