Vodeno is transforming the financial services industry, offering instant access to the most comprehensive cloud-native banking-as-a-service platform available on the market.
“Vodeno was founded to build the most comprehensive banking-as-a-service (BaaS) platform in Europe with the ambition to expand globally,” said Tom Bentley, who joined Vodeno in January as Chief Commercial Officer. With a wealth of experience in the digital transformation and technology sector, The Fintech Times sat down with Tom to discuss the Banking-as-a-Service sector, and uncover exactly what makes Vodeno an industry game-changer.
Originally founded in 2018 in Poland, Vodeno’s founder, Wojciech Sobieraj, had created Alior Bank during the financial crisis in 2008. Despite this, the company went on to be the sixth-largest bank in Poland before Sobieraj left the venture in 2015.
“Wojciech went on to work with Warburg Pincus, a global private equity firm, with the aim to achieve two things: first was to create Europe’s first fully cloud-based bank, free from the legacy systems of traditional banking. This was achieved through WP’s acquisition of Banca Monte Paschi Belgio which was digitally transformed to Aion Bank, a full-service digital bank now live in Belgium and Poland. “Alongside that, Vodeno was set up as a technology company, which enabled us to provide all of the associated services that you think about when it comes to Banking- as- a- Service: everything from payments to lending, compliance to onboarding.”
Vodeno’s operations were instrumental in creating Aion Bank in a short amount of time with the VODENO Cloud Platform serving as its technical backbone. Where dull banking migration for traditional projects with a full-scale bank can take anywhere between 12-24 months, Vodeno achieved it in less than six.
Today, Vodeno and Aion Bank partner to offer embedded banking services to both regulated and non-regulated brands and businesses. “By partnering with a fully regulated bank in Aion Bank, we are able to provision everything from a full-stack perspective,” said Tom.
“When Warburg Pincus acquired Banca Monte Paschi it was a very manual-based traditional bank with a lot of legacy technology,” explained Tom. “Vodeno’s role within that transformation occurred across a six month period to fully digitise all of the processes, including onboarding, maintenance and, of course, the actual digital app in which Aion services its customers. Vodeno’s task was essentially to undertake all the migration activities, the provisional, the software, etc. Through this development process with Aion Bank, today, we’re able to white-label a lot of these services in a really unique way.”
A Key Differentiator
When it comes to the BaaS services that they offer, Vodeno tends to stick out above the crowd due to their advantage of access to Aion Bank’s full banking license. Where many traditional BaaS providers offer things like payments-as-a-service, Vodeno starts to differentiate themselves with their lending products, as Aion’s license allows them to provide lending-as-a-service.
Tom said: “When you start to think about embedded finance and where that term is coming from, we’re able to provide not only the technology that allows non-regulated and regulated brands to offer credit to their customers, but we’re also providing the balance sheet and all of the appropriate products against that. So for example: consumer credit, buy now pay later, this is really where we start to differentiate. We also offer several auxiliary services alongside the bank when it comes to onboarding and compliance.
“The way that I like to describe it is that we’re offering true BaaS, and true BaaS means that rather than just provisioning traditional financial services, with that full banking license and the fact that we have a full cloud data technology, we can offer a lot of different variants of what the industry is looking at from an embedded finance perspective.”
Vodeno’s target clients can generally be broken down into three categories. The first is regulated entities who want to use Vodenos services because they’re building their own proposition. The second segment is a non-regulated entity, which is where BaaS starts to take shape. This could be other fintechs or companies that don’t have all the necessary licensing arrangements in place. The third category is made up of e-commerce, digital platforms and brands, where if you look at embedded finance they can provide customers with a unique financial journey and customer offering.
“The latter is a brand new landscape for us, which is super exciting,” said Tom. “It’s really about providing that OS for FS, or operating systems for financial services. However brands want to interact with us, whether they want to use our license or their own etc, we’ve built ourselves in such a modular way that our customers have limitless choices.”
It cannot be understated as to how important Vodeno’s partnership with Aion Bank – and access to a full European banking licence – is to their operations, allowing them to stand out in the industry and provide products and services that many of their competitors can’t.
“A banking license is a very difficult thing to get, and there are very few players across Europe who are built to provide BaaS with that full banking license, so it helps us to stick out from the crowd.”
“When you think about BaaS as an industry, there have been entities around for a long time. For us, it all comes back to the fact we partner with a true bank, and we’re obsessed with those regulatory and compliance components that traditionally, most vendors leave to the bank or the customers.”
“There’s this fundamental change where the industry is going, and where we become unique, with this interest and responsibility in these topics, and industrialising them through technology.”
The challenges of embedded finance
Delivering embedded banking is no easy feat, and according to Tom comes with its own specific set of challenges.
He said: “The difference between any other ‘as a service’ business and a Banking-as-a-Service business is that fundamentally, banking is always built around trust, and that trust comes through the fact it’s highly regulated and fully compliant.
In terms of building the technology, we’ve had to keep security in mind. We worked very closely with Google as a key partner of theirs to build our platform in the cloud utilising their modern security principles.”
Another challenge comes from educating the client on the nature of the services that they provide. “Rather than just selling technology where you can stand up APIs and let the customer get on with it, our relationships are extremely close due to the fact we’re a regulated business with obligations to the end customer,” said Tom.
Finally, providing technology that gives the user a frictionless experience within financial services is another challenge that Vodeno has overcome. “Making these services lightning fast so that companies can consume them easily is key. We use a variety of partners in order to quickly be able to onboard customers, which is an expectation in the modern era, this, in turn, makes it a faster time to market for customers.”
Vodeno is no stranger to industry partnerships and has recently announced major partnerships with Bankable and Temenos to strengthen their offering.
Vodeno and Aion Bank have also partnered with Talenthouse in order to bring embedded banking services to millions of creatives across Europe.
“This is a really good use case of embedded banking,” said Tom, “As it’s essentially giving banking services to an underserved community. Talenthouse is creating something that is true embedded banking to serve their members. This is a brand that is bringing millions of creatives together to produce an asset that makes banking together across those different communities.
“By selecting Vodeno, they’re not just investing in the baseline product, they’re really looking further ahead in terms of their road map and what we may be able to offer in the future through Aion Banks banking license.”
With the future of the fintech industry often tied up in collaboration, Tom believes that partnerships are often the key to success.
“For me, fintech is a team sport. Disruption is a team sport. So, we’re really working with partners to deliver the best of our capabilities – and their capabilities – to provide unique offerings that we think are going to turn the dial up on the industry. I think you’ve got to come together in order to push the envelope forward.”