Online banking services
FinTechs belonging to this area offer traditional banking services in a modern way, usually through online services or mobile applications as well as ancillary services – e.g. enabling customers to manage their giro- or custody-accounts online and in real time or offering e-wallet services. Keywords in this context are also API-Banking oder BaaS/BaaP.
API stands for application programming interface and is offered to access data banks and to extract and insert information. API-Banking consequently means the access to data banks of banks to offer new and innovative banking applications.
Through these services FinTechs offer services with new functions, e.g. enabling customers to manage their accounts online and in real time.
BaaS – Bank as a Service/BaaP – Bank as a Platform:
The API-based Bank as a Service platform has a full banking licence, but merely serves as the back end for standalone independent FinTechs, which “use” the licence and the back end of the bank to offer new financial services, launch additional financial products or expand into additional markets.
Attitude of the country towards online-banking services
Online banking is very prevalent in Canada. However, it is dominated by the bricks and mortar traditional banks, trust companies and credit unions. The ability of a FinTech to increase its foothold in online banking largely requires the FinTech company to partner with a traditional bank etc. to gain access to their customer base. The result is that FinTechs in Canada in regard to online banking concentrate on programs and platforms that can be sold to the traditional banking community.
Obligations and requirements to provide online-banking services described above
In order to provide online banking services a FinTech has to register as a bank under federal law or as a trust company or credit union under provincial law. This is a very difficult process and as a result FinTech in Canada in this area concentrates on selling programs and platforms to the traditional banking, trust and credit union players.
Additional comments regarding the legal situation for online-banking services or what FinTech’s must be aware of in this business area
Market size for online-banking services and biggest companies in this business area
As stated above the market for online banking in Canada is massive but it is dominated by the large banks, trust companies and credit unions. Stand alone online banking services are rare and face a difficult regulatory environment.
Additional comments regarding the economic situation for online-banking services or what FinTech’s must be aware of in this business area