Zūm Rails is working on perhaps its most ambitious product yet.
The Montreal-born financial technology firm, known for merging open banking and payments so businesses can use whichever rails they want, today announced the development of a Banking-as-a-Service project.
The forthcoming offering will enable companies to offer a suite of bank-like services directly to customers using the same platform that powers their payments capabilities, according to a statement from Zūm.
“Over the past five years, we’ve proven that companies can move forward with any payment rails they want, including instant payments, without waiting for regulators to create the infrastructure for them,” explains chief executive Marc Milewski. “Now we’re looking to do the same with bank-like services.”
Despite Canada’s slow crawl toward open banking, Zūm has been advancing the front, raising $10 million earlier this year to do so.
Leading the work on Zūm’s latest concept is Miro Pavletic, who joins the firm as Head of Banking as a Service following experiencing growing fintech startups and holding executive-level positions at TD Bank, CIBC Capital Markets, and CSAM.
“Miro is one of few people in our industry who has been able to consistently bring ambitious projects like this to life,” noted Milewski, “and we will lean on his experience as we work to solve the North American market’s most significant challenges.”
The introduction of BaaS presents an opportunity for consumer-facing companies to offer services historically provided by banks, including card issuing, transaction settlement, and identity validation, directly to their own customers—which is a big deal, according to Pavletic.
“There is an immense market opportunity for non-banks to harness BaaS and accelerate their speed to market,” he says.
Doing so has the potential to enhance the customer experience and drive revenue growth for companies, according to Pavletic.
But implementing such a complex solution is easier said than done.
“Two major roadblocks currently standing in the way of implementation are regulators pushing back the goal post on open banking and the need for multiple vendors and resources,” says Pavletic. “Our work will remove these roadblocks so that our clients can better personalize their experiences, deepen customer relationships, and accelerate their time to revenue.”
Zūm was founded in Montreal in 2019 and was named among Canada’s most innovate startups in 2022.
Other fintechs in Canada with bank-like ambitions include the venerable KOHO and the rapidly growing Wealthsimple.
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