Financial concerns have suddenly risen to the top of the agenda across a wide range of businesses, including fintech, banking, eCommerce, and more. Banking as a service is the provision of banking products to non-bank third parties through APIs. Part one looks at the relationship between BaaS and open banking and how it connects with embedded finance. Finally, we believe that Banking as a Service is key in future-proofing legacy banks and replacing obsolete systems that some of the traditional banks still rely on today.<\/p>\n

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This model then accelerates opportunities, giving the bank access to new customers. Building and maintaining a banking infrastructure is a costly and time-consuming process. Banking as a Service allows fintech companies to sidestep these costs and focus on developing their own value-added services and customer experiences.<\/p>\n

Talent Solutions<\/h2>\n

In the platform banking model, the bank owns the customer and integrates services from fintechs. In the BaaS model, the customer is owned by the fintech\/non-bank and integrates services from the bank. BaaS is a model built on the foundations of the open banking framework. It\u2019s a strategy for how banks, fintechs and BaaS providers can collaborate to provide integrated financial services and seamless experiences to consumers. The consequence of having a decomposed stack is that there are multiple ways that the customer’s front-end could be presented.<\/p>\n

According to a report from Deloitte, the global BaaS market is expected to reach $12.7 billion in revenue by 2024, growing at a CAGR of 45.7% from 2019 to 2024. The report also predicts that the Asia-Pacific region will see the highest growth rate, with a CAGR of 49.6%. Startups and SMEs are beginning to take advantage of more convenient and effective business banking.<\/p>\n

Weavr brings Open Banking to Embedded Finance<\/h2>\n

Non-banking companies that rely on banks to provide financial services become customers of their partner banks. Recent technological developments have led to an increase in demand for Banking as a Service. In order to meet this demand, BaaS providers are offering an API-based suite of banking solutions that can integrate deeply into their partners\u2019 operations, including sharing data and revenues. While many fintechs have been at the forefront of this trend, traditional banks have also begun to take advantage of this opportunity and are increasing their market share. With BaaS, APIs connect licensed financial institutions and nonbanks\/fintech providers. But any company can\u2019t simply provide banking services; it must own a banking charter, and such a charter is challenging to obtain.<\/p>\n

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The banking landscape is in continuous flux with new innovators constantly stepping on the scene. So, watch this space to stay up to date on industry developments and to hear our opinions on them. FinTech software, such as banking applications and financial institutions, is more critical than ever. For example, different banking-as-a-service providers offer different sets of services. Unique IBAN accounts for individual users and hit two birds with one stone. First, it contributes to a better user experience as they do not have to make a bank transfer each time they make a transaction on the platform as the funds are securely stored there.<\/p>\n