Companies looking to build banking within their model have had to face three big challenges over the past decade: managing bank relationships, keeping up with compliance, and building technology to take their banking to market.
Today’s guest is helping Fintech solve these problems: Itai Damti, CEO at Unit. He joins the show to explain Banking as a Service (BaaS)and how Unit is helping companies with their banking integrations.
“The problem that Unit solves is that building banking is still too hard.”— Itai Damti
Banking as a Service
Itai’s team at Unit helps companies launch bank accounts, cards, payment products and lending services within a matter of weeks.
It’s revolutionary, as far as launching a bank goes. Gone are the days of having to tackle the three big challenges, mentioned above, all on your own.
Banking as a Service reduces years-long timelines into a matter of weeks, enabling healthy competition in the banking sector and allowing for innovation that can meet the banking needs of diverse communities.
BaaS as a part of Fintech 2.0
Fintech’s first generation of companies emerged roughly toward the end of the 2008 recession. Key challenges revolved around data, trust and software functionality.
Today, Itai highlights that it’s all about speed to market. Plug and play options are becoming the winners of this Fintech 2.0 era, and that’s exactly where Unit fits in with its previously-unheard-of speed to market.
The stand-out Unit vision
Unit’s vision can be experienced through their customer experience: sign up on the website, spin up your accounts and within weeks you’re ready to accept your first customers.
Sure, there are only four buckets of financial services (accounts, cards, payment and lending) but Itai believes that Unit’s magic is in how those categories of services are delivered. It’s all about getting the job done efficiently, without compromising on the quality of customer experience.
“We can educate and create a new generation of builders that feel empowered, because it’s so much simpler.”— Itai Damti
For companies seeking their product-market fit, Unit offers an almost risk-free environment where an operation can be launched without first taking on a specific number of staff (compliance staff don’t come cheap, and for good reason).
Businesses that are scaling up also benefit from Unit’s approach to constantly staying on top of all things compliance, as a part of their core service. It means that neither launch nor scale demands your attention on matters that don’t form part of your core service. You get to focus on what you love doing, to serve your target audience, without being derailed by the necessary but peripheral items.
People use Unit to bridge banking gaps
As Itai mentions, the freelancer market is picking up momentum: both in the number of freelancers looking for specific banking services and functionality, as well as the number of service providers trying to meet those needs.
At the core of this activity sits Unit. People are using Unit to build their own offerings such as:
- Cash advances on wages/fees earned
- Consolidation of and differentiation between business and personal finances
- Management of tax calculations and payments
- Cash-back and other reward programs
- Expense tracking
Other types of companies that dominate certain verticals are using Unit to build banking offerings that heighten convenience for their respective customers.
Bundling, partnerships and integrations
Itai believes that with enough time, any business would require products across all financial service categories. Today it’s a banking account, tomorrow it’s a loan account, and so on.
This rebundling capability is what Itai sees as the core of the current and possibly next Fintech generation.
“The bundle mentality, the idea of bringing the full catalog to relationships, is very powerful.” — Itai Damti
In addition to bundling, Unit is deliberate about the way it approaches partnerships and integration. More and more Itai sees the platform approach, which enables builders to arrive from any background and move forward in any direction they’d like, becoming the norm.
How much more can banking improve in the future?
Itai’s excitement about the future of credit products is palpable, particularly when it comes to credit cards and loans to help businesses build up their credit profiles.
Another area offering enormous potential for Fintech companies is international expansion. Now that Unit makes it so quick and easy to launch BaaS solutions, there’s an appetite for it across the globe. Think about it: Expanding your market as a Unit builder becomes something you can tangibly address and take advantage of.
Until next time!
Listening on a desktop & can’t see the links? Just search for Payments Innovation in your favorite podcast player.