Francisco Jaramillo is the General Manager for Spain of Solarisbank AG, in charge of establishing and directing the business and the operations in the market. As a leading Banking-as-a-Service (BaaS) platform in Europe, Solarisbank joins Finnovating, the first global Fintech platform that connects X-Tech startups, corporations and investors from around the world, to increase its presence in the Spanish market by enabling non-bank companies to offer financial services.
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Finnovating (F): Could you summarize a brief review of your professional career as an introduction?
Francisco Jaramillo (FJ): I joined Solarisbank AG as General Manager for Spain after forging a recognized international professional career; working for top-tier financial and technology companies in Spain, the United Kingdom, the United States and his home-country Ecuador. I began my professional career in the banking sector at Citibank in the United States and Ecuador, and then at Banco La Previsora and at Banco de Préstamos in Ecuador.
In Europe, I joined American Express as a General Manager Commercial Payments in Spain, and later I was Regional Manager Commercial Payments Central Europe. Then I moved to VISA, first as Vice President of Strategy and Market Planning for Continental Europe and the United Kingdom, becoming later Managing Director for Southeast Europe. After my time at VISA, I have been part of the management team in companies in the financial technology sector such as TSYS, and Marqeta, a company in which I was Head of Financial and Banking Institutions for Europe before joining Solarisbank AG.
(F): You are the current General Manager Spain of Solarisbank AG. Could you explain the core business of Solarisbank AG? what services it offers?
(FJ): Solarisbank is Europe’s leading Banking-as-a-Service platform. It is important to explain what exactly is Banking-as-a-Service (BaaS) to understand the opportunities that this disruptive technology opens up. BaaS empowers any company to offer financial services compliantly and rapidly via easy-to-integrate APIs. Companies who leverage BaaS platforms can seamlessly integrate financial services such as digital banking accounts and payment cards as well as identification, lending and digital assets services into their own product offering. This trend is also known as Embedded Finance or Contextual Finance and more and more neobanks and non-banks are entering the financial service market to take on traditional banks. Based on our research we believe that almost 500 million accounts in Europe are up for grabs within the next 5 to 10 years.
(F): What is Solarisbank’s value proposition?
(FJ): Solarisbank is a fully-licensed bank – with a full German banking license, and local IBANs via branching in Italy, France and Spain – and therefore on top of the pyramid of the offering of financial services, also providing the necessary tech stach for a seamlessly integration in non-banking products.
Hence, looking at the contextual finance opportunities, we move into the background, being the technological and regulatory enabler leaving the customer relationship and the creation of value-added services to the selected partner.
Solarisbank’s API-based business model makes it easy for companies from any sector to access its unique platform rapidly. Leveraging the full German banking license partners of Solarisbank can integrate a wide range of modular products, including digital bank accounts, identification and lending solutions, as well as digital asset services.
(F): How do you think Solarisbank contributes to promoting and transforming today’s financial sector?
(FJ): The trend of Embedded Finance or Contextual Finance, which is meant to disrupt the financial sector, is driven and accelerated by Banking-as-a-Service platforms like us; Solarisbank enables rapid integration via simple APIs and has no conflict of interest due to its focused business mode. We are seeing growing interest from major brands and ecosystems to talk to us about embedded finance solutions; more customers are already onboarding and will go live in the coming months. Our goal is to provide the core European bank on which the European embedded finance market thrives
(F): How do you think the implementation of digital functionalities will impact the traditional business model?
(FJ): We are convinced that the future belongs to customer-centric business models, those type of solutions will continue to win market share from traditional bank-centered offerings. That is why our product development will always adapt to what the market wants and what our partners need. This constant evolution is one of our core values. The reality is that branches are dying and adoption rates on digital baking products are on the rise, especially among the younger customer groups. Customer-centric ecosystems that leverage big data and AI will be able to provide services that are tailored to the needs of a customer and easily compete with the quality of a consultant.
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(F): How has Solarisbank expanded internationally?
(FJ): Solarisbank was founded in Germany 2016 and we have experienced a huge growth over the last years. The revenues have doubled year by year and top-tier investors joint our cap table. In fact, our Series D round was oversubscribed with a total valuation of 1.4 billion, becoming an unicorn and cementing our position as the pan-European market leader.
We have just opened branches in France, Spain and Italy in July this year. 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
(F): What do you think are the secret ingredients of Finnovating that make it a unique platform?
(FJ): The Finnovating platform, through the development of its own algorithm, will be one of the support points for Solarsbank AG to find and to be found by potential partners for collaboration and co-creation in projects related to contextual finance. This is part of the strategy of internalization, where Solarisbank will support Spanish brands to further develop their local presence and geographic expansion.
(F): Why is Solarisbank AG interested in being part of Finnovating? What are you looking for in the first global fintech platform?
(FJ): Solarisbank deeply believes in Finnovating’s differentiation within the financial ecosystem and relies on the platform to be an important touchpoint in its entry into the Spanish market. Our main objective is to pave the way for embedded finance in Europe, enabling the innovative and customer-centric players in the financial services market. For this reason, it is essential for us to rely on partners as powerful as Finnovating.
(F): What will be the trends of the future of banking according to you?
(FJ): We definitely see a trend towards vertical banking, or niche banking, with more and more neo-banks going into this direction targeting very specific target groups (from sustainable banking, to banks specifically for women or for example freelancer solutions).
The trend of embedded finance is fundamentally changing how we interact with financial services and is destined to disrupt the financial services industry. If we consider figures and data the trend is more than clear: According to research we conducted in cooperation with the Handelsblatt Research Institute in April this year, the potential for embedded finance and thus Banking-as-a-Service is immense. In Europe alone, nearly 500 million bank accounts are up for grabs in the next few years. Lightyear Capital estimates that the global market for embedded finance will grow from around EUR 22.5 billion at present to around EUR 230 billion by 2025.
(F): What factors determine whether a brand can successfully offer embedded financial services?
(FJ): Our Embedded Finance study, ‘When brands become banks’, created together with Handelsblatt Research Institute focused on e-commerce players in order to research this phenomenon. They are also showing already ambitions to integrate embedded finance products – for example at check-out.
Our assumptions were that brands need a high customer satisfaction & trust, they a high interaction rate, a digital business model and they have to have experience with digital solutions (i.e. payments or check-out).
The key factors speak about Customer Satisfaction but also about contextualization – to be seamlessly integrated, providing end-to-end customer experience. (More concretely: high customer touchpoints lead to demand for accounts, while high shopping cart values make loans attractive).
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