Direct Transact, the largest independent provider of banking and payment solutions for banks and brands in South Africa, has teamed up with open banking platform and fintech marketplace FutureBank to accelerate its technology platform capabilities further. The partnership will facilitate the rapid roll-out of embedded finance in sub-Saharan Africa.

Embedded finance is the fintech practice of building financial products or services into non-financial brand customer experiences. It takes collaboration between the brand on whose platform the financial moment is offered, and the financial institutions and fintech partners who enable the financial feature to make it happen. Classic examples of embedded finance include perfectly timed insurance, quick payment solutions, or buy-now-pay-later offers during online checkout.

Launched in 2002, Direct Transact was the first provider of outsourced core banking capabilities and financial services software to more than 70% of South African banks. It currently processes over R40 billion monthly. In addition to being a technology enablement partner to banks, it also helps brands launch financial products and solutions via alliance banking and embedded finance.

FutureBank, meanwhile, is an open banking platform and fintech marketplace that helps banks, brands and fintechs globally integrate new banking and financial service products into their core systems and deploy them at scale with minimal cost and effort.

“Direct Transact believes modern and intelligent banking should be able to plug in and configure composable solutions from exciting third parties who bring new user-friendly elements to the banking experience. FutureBank is a niche fintech company that helps us further enhance our existing capabilities,” said Direct Transact chief commercial officer Christo Davel.

“FutureBank specialises in providing great abstraction layers to banks and financial technology companies. Their technology speeds up and simplifies fintech integrations between banks and third-party fintech partners. Thanks to our partnership, Direct Transact’s interface layer is now even simpler, allowing faster connection.”

Primed for growth

Direct Transact’s work with FutureBank has ideally positioned the company to address the rapidly growing embedded finance market in sub-Saharan Africa. The latest collaboration between the two companies builds on an established relationship and a shared vision for regional innovation and growth.

Accenture analysis has shown that embedded finance for the small and medium-sized business sector is set to boom and could capture up to 26% ($32 billion) of the global SME banking revenue by 2025.

“Embedded finance epitomises the collaborative innovation that African organisations thrive on. It allows multiple players to combine their strengths, allowing a whole new generation of nimble new players to leverage the foundations of established banks to reach new customers with relevant products and services.

“The partnership between Direct Transact and FutureBank will facilitate the rapid growth of embedded finance offerings, helping companies reach the scale they need to ensure sustainable growth,” said Sergio Barbosa, Global Kinetic enterprise software development house CIO and CEO of its open banking platform, FutureBank.

However, without the necessary technical expertise, delivering embedded finance services is not simple.

“To seamlessly embed financial capabilities is technically complex, made more difficult by many banks’ rigid legacy systems. While secure and compliant, Direct Transact’s systems and technology are flexible. And, after our deployment with FutureBank, Direct Transact can rapidly offer more of its capabilities within its customers’ existing technology stacks. This means banks, payment providers and brands can rapidly design and launch new and exciting embedded finance offerings to their clients – solving today’s strategic and client needs and building tomorrow’s solutions today,” Davel said.

The nature of the partnership between FutureBank and Direct Transact promises a bright future for both organisations when it comes to embedded finance in the sub-Saharan region.

“Compatibility with Direct Transact’s core banking capabilities enables us to offer additional capabilities around core banking in the sub-Saharan market. Our partner network is extensive and can benefit from our interoperability and partnership with Direct Transact as the leading core banking provider in the region,” Barbosa said.

The partnership also means FutureBank can offer Direct Transact’s robust, comprehensive core banking capabilities to their clients, who are notable players in the global fintech ecosystem. It’s a match made in fintech heaven,” Davel said.

About FutureBank
FutureBank is a scalable, secure, customisable and compliant embedded finance platform and fintech marketplace that helps banks, brands and fintechs deploy new banking and financial service products at scale with minimal cost and effort. Its simplified integration technology and partner network enable customers to directly embed best of breed offerings in any CX or core system to get to market faster than anybody else. FutureBank reduces integration costs by up to 85%, supports up to 80% of customer-facing functionality off the shelf, and integrates with 96% of core banking infrastructure today (including FIS, 10x Banking, Mambu and now Direct Transact).

About Direct Transact
Direct Transact (DT) is a platform enabling banks and brands to roll out world-class fintech and financial services strategies. Since its launch in 2002, when DT became the first independent software-as-a-service provider to the financial services industries in South Africa, it has built an unrivalled track record as a trusted fintech-as-a-service solutions provider. DT offers banking, payments, embedded finance, compliance, cards, digital identity and finops services.