Riders on the Storm

Paypal and Square together have valuations that rival large banks

Source: Market cap as of June 2021

How are new
entrants building market share?

By leading with product & experience

Easy, smooth and elegant

By changing the business model & how they deliver value

By segmenting based on socio-economic needs

Source: Company websites and press releases

By leveraging distribution effectively like tech companies

Source: Zeta analysis

By building for the consumers of tomorrow

Millennials will experience rapid growth in their share of wealth to nearly 16% by 2030, but their per capita wealth will trail that of older generations. Firms will therefore need differentiated services to serve Millennials profitably.

Gen Z now controls $45 Billion in annual spending, and the oldest Gen Z customers are nearing 24. The group numbers nearly 60 Million in the U.S.

Gen Z members over the next decade will “grow up to be the most demanding consumer the world has ever known”

Fintechs are rolling out new apps and tools with the Gen Z user in mind, to help them build credit histories while still in college, and allow them to earn savings rewards for completing household chores.

Source: Crunchbase as of July

What’s preventing Financial Institutions from doing the same ?

Legacy Technology

Outdated to serve digital needs

Legacy technology results in:

High technical debt & consumption of large chunks of IT spends
Slow delivery of new products & features to market
Low STP rates and dependence on manual processing - keeps costs high

Banks spent anywhere from 65-70% of their annual technology spends on maintaining legacy systems

Source: Wall Street Journal (2019), Technology Is Banks’ New Battleground

“New card programs are entering the market on card platforms that are flexible and agile and can provide a great cardholder experience. Legacy issuers must offer a similar experience or risk losing market share. Unfortunately, many legacy card programs exist on platforms that are not easily scalable, inefficient, and costly to upgrade, putting legacy banks and credit unions at a disadvantage in the market.”

David Shipper,

Senior Analyst, Retail Banking & Payments practice at Aite-Novarica Group

Discrete components

Restrain product delivery and innovation

Discrete components result in :

Highly complex integrations and custom connecters for creating new innovative products
Increased costs due to integrating solutions from multiple vendors and maintaining them
Data being stored in silos in each discrete component - integrated view of data difficult or not possible

Lack of cloud adoption

Impacts scalability & resilience

Lack of cloud native systems result in:

Inability to scale systems elastically to meet increase in demand
Difficulty in managing system resilience
Higher costs in maintaining captive data centers and redundant capacity

Not API First

Inability to seamlessly integrate partners and build ecosystems

Systems that are not API first result in:

Inability to support Open Banking
Inability to support embeddable banking
Inability to drive innovation through partner focused ecosystems

Compounded by Macro Headwinds

Low
Interest Rates

Pressure on NII, with need to increase fee based income

Stagnant efficiency rates

Flat yield with high operating costs

Changing demographics

Pressure on NII, with need to increase fee based income

Pandemic

Optionally digital to optionally physical

What do FIs need to win in this new landscape?

Customer centric digital strategy

Product factory of services, mapped to life journey, delivered with high frequency

Highly
personalized

Mapped to their financial needs

New revenue
models

Improve efficiency by lowering TCO

Reimagine what is possible

Status quo is insufficient - must leapfrog neo and challenger banks

Build for Tomorrow

Principle 1

Control

Control all aspects of your business by controlling all points of integration and using a single stack

Principle 2

Pace of change

Build to allow rapid change and deployment of new products & features. This allows for quick iterations and product feature releases

Principle 3

Composability

Decompose technology tasks to their basic form instead of using monoliths. Use a micro-services led approach to allow quick composition of new products

Principle 4

Scalability

Embrace cloud based technology to allow for rapid scaling on demand

Have a workable plan for how to get there

Billions of dollars have been spent on M&A + stack upgrades - too risky & too slow

“Upgrading from a legacy platform requires a comprehensive strategy. Financial institutions must weigh the benefits of a slow and steady change against a parallel solution that allows for testing, control, and rapid installation."

Brian Riley,

Director of Credit Advisory Service at Mercator Advisory Group

How can we help you?

Zeta enables you to launch innovative financial products that can compete & win in a crowded marketplace.

With Zeta's Omni Stack solution for FIs , you can launch new financial products within 90 days. What sets Zeta apart is its single modern stack consisting of core banking, credit and debit processing, loans and deposits with 100% API coverage and modern interfaces.

Why Zeta?

Time
to Market

Launch new products in < 90 days and new features in days

Modern
Experience

Provide modern, neobank-like experiences with a fully private-labeled & customizable mobile app

Increase
Income

More customer retention, higher engagement, and contextual cross-sell for real gains in revenue

Lower
TCO

Eliminate complex multi-vendor integrations and leverage simplified pay-as-you-go billing

Modular greenfield deployment

Launch new programs in parallel with your existing legacy systems with zero overlap

Open
Banking Ready

100% API coverage and extensive SDK support - built for you and your partners

Infinite
Scalability

Elastically handle peaks and troughs in volume with our cloud-native, loosely-coupled, microservices architecture

Extensive
Backoffice Capability

Configure products, support customers, launch promos, build dashboards and manage all your banking operations in one place

About Zeta

Zeta is a modern banking tech company providing a bank-in-a-box solution to financial institutions around the globe. Co-founded in April 2015 by Bhavin Turakhia and Ramki Gaddipati, the company has 800+ employees and is headquartered in San Francisco, USA with offices across UK, Middle East, and Asia.

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