RBS recently announced it was launching a Worldpay competitor – called NatWest Tyl. The product will provide payments services to small and medium-sized business and allow retailers to accept card payments both in-store and online via Visa and Mastercard networks.
This got me wondering...if banks like RBS develop and launch their own in-house capabilities, what does this mean for the relationship between them and fintechs? And more specifically, what will the role of core banking providers be in the future?
Banks with legacy systems have long relied on core banking providers like FIS, Finastra, or Temenos to develop the technology to help them function. But as banks start to excel at developing their own tools, core providers will have to up their game to remain competitive, ultimately by finding new ways of providing products and services that banks haven’t come upon.
So what will the role of core banking providers become? As banks become increasingly able to build their own tools, there will be whitespace to teach them how to implement these products and services frictionlessly for end users. We’ve seen this trend in other areas like marketing and advertising.
As companies develop their own capabilities, there’s always an element of education that needs doing. Core providers will maintain an advantage when it comes to knowledge – knowing how various types of tech work with different systems, where the challenges are, and how to best optimise to see maximum results. While big banks are able to buy up the best players and products, core providers still have an edge when it comes to consulting.
RBS has done a great job at elevating and communicating its offering in a way that’s reactive to its various audiences. In addition to NatWest Tyl, the bank has also recently rolled out digital loan service, Esme and their business bank, Mettle. By rolling out products for various audiences they’re not only capitalising on capturing markets across their audiences, but also building out, developing and optimising their tech stack.
Core banking providers should take note of these types of product developments, and respond accordingly.
RBS had to sell Worldpay as part of a bailout during the financial crisis of about a decade ago. Since then, Worldpay and other payment companies have seen their businesses boom as the movement away from cash grows.