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Customers Achieve Efficiency and Cost Savings with NetSuite Banking as a Service

Posted by Scott Derksen, Senior Director of Business Development

For decades, business owners have been frustrated by the need to use disparate point solutions to run their businesses. NetSuite’s value proposition is driven by its ability to consolidate these processes into a single system, driving out cost and delighting customers with a single version of the truth across the organization.

Business banking, as it relates to ERP processes, is no different. In fact, the idea that the system where you record your transactions is separate from the bank where you conduct them is rapidly becoming antiquated. NetSuite’s modern and complete SuiteCloud development and integration platform combined with its Banking as a Service (BaaS) program lets customers unify processes, realizing efficiencies and reducing costs for business banking, just as NetSuite has done across commerce, ERP, HCM, CRM and other business processes.

This is especially important at a time when fintech startups have been challenging market definitions of banking, rewriting practically every operational process and completely changing the expectations of banking customers.

Meanwhile, money transfer apps like ApplePay and Venmo are poised to claim an estimated 60 percent of traditional banks retail profits through the disintermediation of the relationship between the bank and its customers.

These solutions fill gaps for users but splinter the relationships between corporate customers and the bank and can erode value for both. Traditional banks have been scrambling to evolve and keep pace, fighting against aging technology and business processes.

The recently released Oracle NetSuite Banking as a Service (BaaS) Program strengthens bank-to-customer relationships in a digital transformation where banking services are delivered within the ERP system. Combining NetSuite’s powerful SuiteCloud Development platform, its distribution to more than 15,000 customers and BaaS development tools, banks can begin to develop and deliver valued services directly to customers—services like embedded payments, where industry estimates indicate that businesses can save as much as 70 percent in accounts payable processes. Other services include account reconciliation, working capital, lending and many others.

"Providing our clients the ability to seamlessly connect to J.P. Morgan is part of our overall transaction banking strategy," said Jason Tiede, Head of Innovation, J.P. Morgan Treasury Services. "We are excited to offer connectivity to NetSuite's ERP system which will facilitate a better, more efficient experience for our clients."


Figure 1

NetSuite’s team is hard at work supporting BaaS functionality right within native workflows, and the core product will evolve over time.

There are eight functional areas in NetSuite where business users interact with financial institutions (in green and blue above).

There are two types of APIs in the BaaS program:

  1. The Financial Institution (FI) APIs are purpose built for BaaS. Today, they include embedded payments and account reconciliation.
  2. The SuiteCloud (SC) APIs are NetSuite’s general-purpose innovation API stack and they enable support for the functions in green.

Over time, to support BaaS partners, NetSuite will add scope to the FI APIs to support advanced use cases or streamline processes that can be centralized.

Banks may choose to employ current SDN partners to deliver their SuiteApps to the market or build them directly.

More About APIs and Open Banking

Open banking, a way for banks to take part in collaborative ecosystems, partly through open APIs, is quickly becoming an imperative. In fact, according to Forrester Research’s 2018 banking technology predictions, “more than 50 percent of banks will fail to exploit open banking, starting down the slow, painful path to becoming an unintentional utility.” Indeed, a new report from Oracle and MIT Technology Review Insights finds that most banks are still in the early stages of open banking adoption.

However, exploiting those APIs is both costly and difficult, especially at small and midsized businesses.

NetSuite BaaS leverages bank investments in open APIs and delivers application functionality and services to the end customer, giving banks and NetSuite customers an efficient, secure way to transact across the SuiteCloud development platform.

Banks don’t have to worry about being disintermediated by fintechs anymore, they can become fintechs themselves. And they can do it on a platform that is fast, reliable and secure. Several SDN partners are responding to this shift by delivering services to the banks to help them execute quickly.

"NetSuite’s Banking as a Service program helps banks regain control over the customer experience, increase revenue opportunities by connecting efficiently with their corporate clients and getting access to new customers and real-time trade data," said Rob Barnes, CEO of TradeIX. "On the other side, customers using Oracle NetSuite have a single access channel to connect to existing and new financial institutions, thus widening the range of funding opportunities.”

Most important, NetSuite customers will benefit from banks that now have the agility of a fintech, but the power, reliability and trust they have spent decades building.

For more information on BaaS, email baas@netsuite.com.