Monese plans to switch from Thought Machine to in-house XYB for core banking

Digital banking app Monese is planning to ditch Thought Machine as its core banking provider in favour of its in-house XYB platform by the end of the year.

The news was revealed by Santosh Radhakrishnan and Bhavik Sanghvi, chief commercial officer and product director at Monese’s banking as a service subsidiary XYB, in an interview with Fintech Futures.

“We could have continued with Thought Machine, but because of the product strategy, we decided to bring it in house and to seize the opportunity for us to build it ourselves with that no-code/low-code strategy,” Sanghvi said.

Monese’s partnership with Thought Machine will remain in place until December, according to Sanghvi, and the two companies were still discussing opportunities to continue working together in other areas.

The duo also confirmed in the interview that XYB is currently being adopted by a Tier 1 bank, although no name was disclosed.

In response to the story a Thought Machine spokesperson told AltFi: "In our three-year partnership, Monese's experience with Vault Core's hyper-configurable product engine and rich ledger has been a catalyst for them to build XYB, a turnkey solution."

"We wish them all the best in this endeavour, and Thought Machine remains committed to building market-leading core banking and payments technology, which empowers top banks and fintechs to own their entire product proposition, rapidly scale, and plug into the best of the fintech ecosystem as needed."

Monese launched its banking-as-a-service arm in 2021 as part of its Series C funding round to start offering Monese’s own banking technology to other financial institutions, starting with major investor Investec.

Last year this arm of the business was rebranded as XYB and set up as a new subsidiary, in a move not dissimilar to that of Starling Bank which created Engine as a new brand and subsidiary for its banking-as-a-service work in 2022.

Monese last raised funding in September 2022 when HSBC via its Ventures arm led a $35m funding round in the business.

AltFi has contacted Monese for further comment.