The role of Banking-as-a-Service

Monday 12 December 2022 12:39 CET | Editor: Vlad Macovei | Interview

Ulf Meyer from SWK Bank shares details about the challenges in consumer credit and long-term deposits, the future of this industry, and the role of Banking-as-a-Service.



Ulf Meyer from SWK Bank shares details about the challenges in consumer credit and long-term deposits, the future of this industry, and the role of Banking as a Service.


What is the story of SWK Bank and how would you describe your business model, services, and target group?

SWK Bank was founded in 1959 and has always been active in the private consumer loans and financing business. Since 2001, SWK Bank provides online consumer loans using APIs and has ever been a first mover using new technologies. In 2014, it was the first bank in Germany to offer video legitimation. In 2017, we launched the first 100% digital consumer loan giving customers the ability to finish applications within minutes and receive the payment on the following day. Today, SWK Bank is active in Germany and Switzerland with its own brands and provides loan and deposit services for banks and fintechs as a Banking-as-a-Service (BaaS) provider. 

What are the current challenges in consumer credit and deposits? 

The development in the deposit and consumer loan business is characterised by declining margins and increasing customer demands. Digital-personal and fully digital solutions are playing an increasingly important role, especially in the post-COVID-19 era. The consumer credit of the future must become even simpler, more convenient and context-related. Overall, loans will move very close to purchases with hire purchase and leasing continuing to increase. The video identification procedure will be replaced by fully digital legitimation finally also in Germany. In my view, it will be even more important to be relevant to customers as a long-term companion for personal liquidity management beyond the individual financial product.

How is digitalisation, especially in a post-COVID-19 world, remaking the future of the lending business?

COVID-19 has greatly accelerated the digitization of the sector - and will continue to do so in the future. For me, technological innovations will help to offer loans in a more context-specific way. To this end, artificial intelligence will certainly be used in the future to enable real-time offers at the point-of-need. The optimization of legitimation processes will also be further advanced from both a technological and security perspective, with facial recognition or even automatic matching with ID images becoming standard in the near future. With the blurring of product boundaries through other BNPL offerings, I also see new forms of payback on the intersection of debt and credit in the future.

How would you describe Banking-as-a-Service? What is its the role in credit business and deposits? What are the benefits?


The banking industry has been continuously facing new requirements for years. While some come and go, perhaps the most consistent driver is technological innovation. It is changing not only customer expectations but also how services are delivered and who delivers them. New players are entering the market. Meanwhile, existing ones need to take a critical look at their business and operating models in the face of this change, focus on the parts that matter and simplify the rest – by outsourcing processes and IT systems. 

This is exactly where BaaS comes into play. Instead of developing and operating infrastructures, platforms, or processes themselves, banks are deciding to source them in whole or in part. The advantages are obvious: the provider continuously optimises processes while lowering costs due to economies of scale passed down through a highly scalable pay-per-use model. This explains why BaaS is a growing opportunity for everyone, no matter which side of the table, with an expected growth rate of more than 25% per year. And yet, this decision remains a major challenge for every single bank. 

The first thing to decide is which services to source with what level of standardisation. Traditional outsourcing agreements are highly tailored to the needs of the customer. New providers, on the other hand, tend to rely on standardised offerings via the cloud. 

The second decision is all the more important and about the choice of a suitable partner with a proven track record. Think of the availability and mastery of regulation, technology, and skillsets of its employees. As a digital pioneer, SWK Bank has BaaS in its DNA. The technology with digital account check, video legitimation, and qualified electronic signature we introduced in 2017 has now become a basic technology for many processes also offered to third parties – we now serve 14 partners, most of whom we have been doing so for years.

What is on the roadmap for SWK Bank for the next years? 

SWK Bank wants to maintain and further expand its technology leadership in the lending sector. Our distinctive digital expertise will help add further, related products and services. We will make all this available to other financial institutions as a BaaS provider. In doing so, we want to enable our partners to develop better banking experiences faster and more flexibly than ever before. To this end, we will successively expand our partnerships with further innovation leaders in the financial sector to best support our partners in a constantly changing environment.

This interview has first been published in the Open Banking Report 2022. Click here to download the report.

About Ulf Meyer

Ulf Meyer is Managing Director of SWK Bank since 2013 and responsible for Marketing & Sales, Business Development, Legal and Auditing. Before he spent more than four years at SWK Bank in various managerial roles and additionally as an authorized signatory (Prokurist). Ulf Meyer is also managing director of krefa service gmbh, a subsidiary of SWK Bank and Chairman of the Board of Directors of good finance AG in Switzerland.


About SWK Bank

SWK Bank is one of the leading direct banks for loans and fixed-term deposits and considered a pioneer in digitalisation and innovation. The bank employs 150 people, with total assets of EUR 2.2 billion in 2021 and is offering fast application processes with TÜV-approved security  as a Banking-as-a-Service partner for other banks and fintechs. 

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Keywords: BaaS, Open Banking
Categories: Banking & Fintech
Companies: SWK Bank
Countries: Europe
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Banking & Fintech

SWK Bank

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