Chad Wallace, global head of digital Transaction Banking (TxB) at Goldman Sachs, discusses the advantage of BaaS and embedded finance, such as improved flexibility and new partnership opportunities.
Global Finance: What are the benefits of transaction banking-as-a-service platforms over legacy transaction banking digital offerings?
Chad Wallace: TxB’s Banking-as-a-Service platform enables heads of product to embed financial products into their small-business platforms. We see an uptick in use cases where small businesses want to embed payments, business banking wallets and working capital solutions into their platforms to deepen the stickiness of their offerings among their clients. Since BaaS allows our clients to control the entire experience via our APIs [application programming interfaces], we provide ultimate flexibility in designing the user experience. The Goldman Sachs Virtual Integrated Accounts platform also allows partners to create flexible bank account structures that facilitate these use cases.
GF: What kinds of value-added services does Goldman Sachs offer treasurers thanks to better data integration?
Wallace: TxB offers API- and file-based connectivity so that our clients can use the systems they use today, and we plug in behind the scenes. We have pre-integrated with several procurement platforms, accounting platforms, enterprise resource-planning systems, payroll platforms and treasury workstations to streamline the setup process.
GF: How do APIs bring greater innovation and customer experience to transaction banking?
Wallace: APIs allow our clients to pay globally using a single API for domestic and international payments, track the status of all processed payments in real time, track balances of deposit and virtual accounts in real time, and make decisions regarding potential debits on their accounts in real time through our authorizations and filters offering. They also permit pre-integration with leading corporate-based solutions to streamline the setup and implementation process with the bank and embed financial products into their ecosystem, such as marketplaces and accounts receivable /accounts payable platforms.
GF: What are the opportunities for embedded finance in transaction banking?
Wallace: TxB’s embedded finance offering is built on the platform’s core infrastructure used by treasury organizations at large companies, but serves a different client segment—the heads of product at software companies, marketplaces and platforms. This creates an entirely new realm of opportunities for partnerships as well as access to new client bases via these partnerships. We anticipate that partners will use the building blocks of TxB’s BaaS platform—including deposits, payments and working capital—to design products that are best suited for their client bases and delivered seamlessly within existing business workflows.