Berlin fintech Solarisbank eyes European expansion in 2021

[BERLIN] Digital banking platform Solarisbank will enter a string of new European markets next year, chief executive officer Roland Folz told Reuters on Monday, as it became the first German bank to shift its entire operation into the cloud.

The Berlin-based startup operates a so-called "banking as a service" model, enabling partners like South Korea's Samsung Electronics to offer branded accounts and financial products to their customers.

Solaris said it had completed the migration of its core systems, digital products and databases to AWS, the cloud computing unit of Amazon, within a year of launching the project.

That positions the provider of digital bank accounts and payment cards, know-your-customer checks and lending services to expand together with its partners into countries like France, Italy and Spain.

"We want to grow with our existing partners and ensure that they can spread their business and value proposition across Europe," Mr Folz said in an interview.

Four-year-old Solaris raised 60 million euros (S$96.1 million) in June from investors led by HV Capital, bringing total backing to 160 million euros. At the time it hosted 400,000 accounts - a number that has since grown to 750,000.

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The partnership with Samsung, whose venture arm has also backed Solaris, introduced the South Korean smartphone leader's payments app to Germany as well as offering a split-pay product for users to buy now and pay later.

Tying its white-label services into branded ecosystems makes Solaris a play on a shift away from traditional banks to mobile financial services. Solaris also supports fellow Berlin startups Vivid Money, a personal finance app, and commission-free stock broker Trade Republic.

With an estimated 80 million Samsung device users in Europe, converting even a couple of per cent of those would create a digital bank with more than a million users.

"The ambition level could be higher," said Mr Folz, a veteran of Deutsche Bank. "The opportunity is there to build a substantial financial powerhouse for any of the big techs out there."

Of a total market of one billion accounts in Europe, half could be taken by technology ecosystems rather than traditional banks, Mr Folz reckons.

"That would put maybe 500 million accounts up for new ownership," he said. "There's a tremendous opportunity to win some of those."

REUTERS