How Baas Enables Fintech Innovation
Banking has gone beyond traditional offline buildings and has become a part of our everyday online routine. These changes are seen not only in large cities – even in remote areas people now have access to banking and financial services. This digital jump has become possible due to the evolution of BaaS.
This blog post takes a look at BaaS, and explains the concept and the opportunities it carries for fintech and non-fintech companies looking to give their customers seamless access to the comprehensive set of banking services.
What’s Banking as a Service
Banking as a Service (BaaS) is a concept within the fintech industry that allows banking and financial services to be integrated into non-banking platforms via APIs. In simpler terms, Baas allows outside businesses (whether fintech companies or not) to provide banking and financial services to their customers without having to create and oversee banking and payment systems from scratch, as well as without having to obtain licenses for offering financial services.
Advantages and Potential of Banking as a Service for Financial Technology Firms
BaaS is opening up opportunities for fintech firms and startups to offer banking services that were once limited by traditional brick-and-mortar banks. Let’s examine how the BaaS model facilitates innovation in fintech.
Extended Range of Products
Both licensed and non-licensed entities have the opportunity to provide a diverse selection of financial products and services through BaaS. This encompasses payment services, checking accounts, currency conversion, card issuing, AIS (Account information service), PIS (Payment Initiation Services), and more. The mentioned services need to be incorporated into the primary banking system of a BaaS client.
Flexibility
BaaS enables a modular approach to banking services. This means that companies can pick what banking and financial services they want to integrate into their platforms and adapt them to address the needs of their customer base. In addition, BaaS allows the connection of different BaaS providers simultaneously, provided you own a flexible banking platform.
Customer experience
By integrating banking services directly into their products, companies boost customer experience and simplify financial operations. Customers no longer need to switch between external applications or websites to complete transactions. Apart from added convenience, this also grants better security levels, minimizing the risks of data leakage, unauthorized access, and fraud.
Regulatory Compliance
Since BaaS providers are well-established and licensed financial institutions, they’ve already obtained all the necessary regulatory permissions and passed the required compliance procedures. This allows client companies to use these opportunities bypassing the need to navigate a complicated regulatory framework and obtain their own license.
To sum up, BaaS model allows fintech and non-fintech companies to offer a comprehensive set of banking services without the need to build a banking infrastructure from scratch and obtain regulatory permissions.
If you’re a fintech business or startup looking to capture the benefits of BaaS, S-Pro team has you covered. Their experienced team can build a banking product that resonates with your customers and investors. Don’t hesitate to define a new digital future for your fintech solution with S-Pro.
