In the wake of the 2009 financial crisis, Paul Volcker, former chairman of the U.S. Federal Reserve, famously remarked that the ATM was the most impactful banking innovation of recent decades. Though ironic, his comment served as a wake-up call for traditional banks, urging them to catch up with technological innovation. Meanwhile, fintech companies were already crafting business models that would reshape the financial landscape. One way traditional banks can innovate and stay relevant is by offering Banking-as-a-Service (BaaS) solutions.
According to research from Lund University, 80% of surveyed organizations believe that BaaS benefits traditional financial institutions and their stakeholders, including fintech companies, startups, and end-users. As BaaS continues to gain momentum, non-banking financial institutions (NBFIs), merchants, fintechs, and platforms must choose the right BaaS provider to leverage its full potential.
For a deeper exploration of these topics, we invite you to check out our comprehensive whitepaper, which delves into the nuances of BaaS and its applications.
1. What is BaaS and how does it differ from Embedded Finance: Banking-as-a-Service (BaaS) allows non-banking entities to integrate a wide range of banking products and services into their offerings without the regulatory burdens of becoming a licensed bank, significantly enhancing their competitive edge.
2. Critical Selection Factors: When choosing a BaaS provider, businesses must assess their specific needs, evaluate customer compatibility, ensure regulatory compliance, and consider the provider's technological infrastructure and customization options to achieve the best outcomes.
3. Making a decision: Businesses should ensure that the BaaS provider offers enough flexibility, customization options, and seamless integration for a successful launch of financial products and services.
Partnering with a consultancy like PaymentGenes can streamline the process of selecting and implementing BaaS solutions, providing essential expertise in navigating regulatory landscapes and ensuring a successful integration.
We offer end-to-end support in selecting the right BaaS vendor, right from conducting a requirements analysis to defining your product strategy, we can guide you through a thorough vendor selection process to ensure the success of your BaaS integration.
Contact our experts Bas van Donselaar and Shubham Lakhani today for more information on how we can help you leverage BaaS for your business success.
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