Banco Original has decided to turn its Original Hub division into a separate business unit. Original Hub is a Banking as a Service (BaaS) platform that provides a set of technology infrastructure and APIs so other companies to deliver banking services to end customers.
According to the digital bank, Original Hub will meet the growing demand for financial services by fintechs, retailers and public agents, among others. In the first half of this year, Original processed more than 73 million transactions for third parties, including payment services through PIX (the Brazilian instant payment system), payment of bank slips, scheduling automatic debit and withdrawal.
The growth of the market for BaaS platforms such as Original Hub occurs because, in order to operate, fintechs and institutions that provide financial services to other companies and end-users need licenses from the Brazilian Central Bank.
Through platforms like Original Hub, these companies are able to make financial services offerings to other companies (B2B) or to their consumers (B2C). In other words, Original Hub “rents” its technological infrastructure for financial transactions. There are currently about 40 clients, including fintechs and companies from various sectors, including the telephone industry.
“BaaS is the way to offer financial services in any digital ecosystem,” said Alexandre Conceição, president of Original Hub. To meet growing demand, Original Hub is including new services on its platform, such as PIX for retailers and automatic debit scheduling.
Banco Original’s decision comes at a time of innovation for the Brazilian financial and banking system with open banking, a system that will allow customers to share their financial data among institutions authorized by the Central Bank. With this, they will have more autonomy to choose financial services and products and will be able to manage their financial lives on more than one platform or app.
On the market side, open banking has the potential to bring traditional banks, fintechs and other financial institutions that operate under some license from the Brazilian Central Bank on equal terms thanks to the adoption of a standardized technology layer that will simplify communication and data portability between institutions.