Australian bank Westpac has introduced a banking-as-a-service platform.
Australian buy now, pay later FinTech Afterpay is the first third party on the platform.
BaaS is when banks offer an end to end service for non-banks, allowing them to offer digital banking services.
Afterpay will gain Westpac accounts for its customers in Australia as well as money management tools.
What does this mean?
Westpac has recognised the need to change its business model in order to suit changing customer needs, as well as build relationships with FinTechs. These kinds of relationships marry the bank’s existing customer base, trust and experience with new customer-centric tools offered by FinTechs, and allow both parties to quickly offer a range of services to users.