What is Banking as a Service platforms?

In the banking as a service platforms (otherwise known as BaaS providers) model, the customer is owned by a non-banking financial services provider which integrates its services with facilities from one or more banks. BaaS is the plug-and-play equivalent offering banking and financial services. BaaS means customers are paying for services as they use them, rather than buying applications. Many finance service and banking providers are now embedding financial services into their offerings to enhance the end-to-end journey for their customers.

 

How does banking as a service work?

Banking platform as a service (BaaS) involves three parties – a Third Party Provider (TPP) which offers a brand of services to end-users; a service provider that supplies modular financial services to TPPs on cost-per-use service; and a registered bank that provides banking functions to service providers, such as payments, back-office operations, risk management, and customer service. Most importantly, the bank is the entity that provides regulatory compliance for the whole BaaS platform.

 

The bank grants access to its systems to a TPP, which means the TPP can use its APIs to interact with customer data. With this access, the TPP can offer banking products and services using its systems.

 

BaaS explained

Built on the concept of software as a service (SaaS), which enables users to subscribe to function-specific services over the internet rather than having to buy and install applications on their computers, banking as a service platform is the plug-and-play banking equivalent that enables users to access financial services over the internet. It typically does this through banks offering up their infrastructure to third-party service providers such as financial-technology firms (fintech), that are offering retail banking services, typically through the use of application programming interfaces (APIs).

 

The list of best online banking as a service providers includes new players such as Mambu, 10X, Thought Machine, and FinXact, as well as products from the traditional core platform vendors. These promise to help banks radically modernize and accelerate the benefits through higher developer productivity and the removal of technical hurdles. They can achieve further efficiencies by leveraging cloud-based services, which enable them to deploy new products and scale infrastructure quickly and use development tools that support automation.

 

Third parties can provide various financial services to their customers by building on top of the existing regulated infrastructure of licensed banks. Service providers from virtually any sector can now incorporate the full range of financial services for their customers and for the customers themselves to conveniently access those financial services even if they are not customers of the underlying bank. With baas providers, service providers can simply pick and mix from a range of financial products and then tailor them to the needs of their customers; in doing so, they can create new financial platforms of their own.

Below is a list of best online banking platform providers currently offering products to both banking as a service and banking as a platform customers:

New Banking as a Service - list of 172 BaaS companies

Product Vendor Description
1 Intergiro.3d Intergiro Intergiro allows you to leverage state-of-the-art banking infrastructure to build financial services rapidly and at a low cost
2 Abanks ASI GROUP Mature -  robust and versatile Financial Core Solution that incorporates the best practices of the international financial market
3 Abowire Abowire Abowire is a Subscription Platform that has everything you need to sell subscriptions. No code & fast setup. Made in Germany.
4 Abraxsys Cor Financial Solutions Integrated multi-currency banking system covering treasury - commercial lending and trade finance with unified customer information.
5 Accusystems - Document Imaging AccuSystems Bank document management solution that helps manage loan applications -  contracts -  insurance -  wire transfers -  audits
6 Apex Banking Software Apex Softwares Comprehensive solution for the integral processing of all operations in a financial organization.
7 aplonHUB Payment Components Add payment functionality to the core system.
8 ARMnet Integrated Banking Axcess Canada Integrated financial management solution for banks -  credit unions -  loan originators and wealth management firms - SOA architecture.
9 Aspekt Microfinance Software Aspekt Microfinance software with integrated Business Process Modelling tool.
10 Aurora Image Item Processing Computer Service Professionals Check processing software designed to provide superior performance and accuracy for the check processing operations.
11 Avaloq Banking Suite Avaloq Fully integrated front-to-back digital and core banking solution -  delivered ready to bank (SaaS) or ready to operate (BPaaS).
12 Axxiome Digital Axxiome An intelligent omni-channel solution designed to simplify -  accelerate and deliver purposeful digital transformation for banks.
13 B2 CS All-round banking automation solution that enables a broad spectrum of bank's business processes to be automated
14 BANC Mall SS&C Technologies Provides accurate and up-to-date access to credit reports -  business reports and other services all from a single web site.
15 BANCOS G&H Bankensoftware Meets customers needs for flexibility and interoperability.
16 Bank Communication System Keystone Computer Associates Operates on IBM mainframes and supports SWIFT -  CHIPS -  DTC -  FEDWIRE -  NBES -  and TELEX transactions.
17 BANKER' S FRONT New Access Integrated -  modular -  multi-channel front-end solution for private banking & wealth management institutions.
18 BankFlex Eon Technologies Ready to deploy omni-channel solution to meet their digital transformation needs.
19 Bankingly Bankingly Solution for financial institutions to provide secure and affordable web and mobile channels.
20 BankMill Mindmill Software Core Banking Software. Browser & Applet Based. Full functionality -  Single Database.
21 BankOne E-QL Business Solutions Any Branch Banking (ABB) System for Co-Operative Banks & Credit Societies to serve the clients better.
22 BankRite BMA Core Technology Banking software with item processing -  deposits -  loans -  teller systems -  reporting -  CIF -  remote deposit -  and ebanking.
23 BankSmart CodeBase Technologies Online software built on a hybrid blockchain model that helps automate front and back office activities in banks.
24 Banksoft Processware Systems Core banking software with built in financial reporting.
25 BankTrade Complex Systems Browser based software solution for trade finance -  letters of credit and international banking.
26 BANKTRON ETRONIKA Omnichannel (Internet -  Mobile -  Web Services etc.) solution for modern financial institutions.
27 BankWare International Financial Systems Web-based platform designed to help banks streamline workflow processes with collateral management -  account charging
28 BANQ BanQ Systems Multifunctional product for transaction processing creating. It could be used as a standalone product or as a part of FinQloud.
29 Bansoft Banking Systems Core Cloud Banking Solution designed for online Financial Institutions.
30 Bantotal Banking System Bantotal Bantotal Core - Bantotal Microfinance - Bantotal Comex - Digital Banking Solutions - Bantotal Treasury - Bantotal Business Processes
31 BCSS Prime Factors Highly-specialized middleware for EMV data preparation and a secure card issuance.
32 BLOCKCHAINIZ Utocat Blockchain access solution. The API is available to all people wishing to carry out a project on the blockchain.
33 bMASTER Enterprise Banking System UniSystems bMASTER is an advanced Core Banking packaged solution covering a wide range of operations for retail -  wholesale and corporate banking.
34 Cashbook Cashbook Cash Mgmt and Electronic Banking solutions for over 100 customers in 20 countries around the world. Integrates w/ leading ERP systems.
35 CashWebCommunity Transtrack International Modular multi-lingual cash management solution that integrates with 3rd party systems and works with domestic and foreign currencies.
36 CAVU Metryus CAVU ready-to-go mobile banking application
37 CenterSphere Centerprise Services Management -  monitoring -  and control solution for financial services organizations.
38 CLX.E-Banking Software Suite CREALOGIX Digital banking platform that combines asset management -  customer service -  and bank document management modules.
39 CMB MFSYS Helps MFIs and Banks strategically respond to today's business challenges.
40 COA for Banking Advanced Software Applications Opportunity management platform with combined CRM -  sales force -  and marketing automation functionality for banking sector.
41 CoBIS Microfinance Software Enterprise Software & Technologies Manage accounting -  clients -  suppliers & loan portfolios through financial planning -  reports & more.
42 Community Banking Systems Genesis Banking Document imaging & loan management software for community banks which helps in banking compliance - audit preparation -  etc.
43 CompliXpert Sydel Corporation Anti-money laundering monitoring and compliance system for financial institutions.
44 Core Banking Solution Mccoy Global Links Enables the financial institution to operate more efficiently and cost-effectively.
45 CoreBank Banksoft Integral and modular core banking system that represents a strategic tool for bankers.
46 Corniche Megasol Technologies For management of private banks -  offshore banks -  and other financial institutions involved in loans and payments -   provides true multiple currency accounting with a uniform back-office interface -  merchant and card services -  payment interfaces and powerful on-line banking facilities. Potentially manage multiple entities with unlimited currencies. Design parameters make it ideal for managing small to medium size banks and branches.
47 CPB Software CPB Software Core Banking -  e-Banking -  Payment System (SWIFT/SEPA) CRS Reporting -  e-Mailbox -  e-Signature -  e-Forms
48 Crassula Crassula Open-banking software platform that helps companies launch online banking -  merchant payment gateways -  FX -  card issuing
49 Credics Solution Credics Rules-based engine platform for transaction processing.
50 Credit Cooperative Society Software Shinewell Innovation Softech .NET based centralized database online software for credit cooperative societies with core banking functions.
51 CSI Computer Services Manages payments -  transactions -  loans & treasury through mobile banking applications & more.
52 Cyberbank Technisys Banking system solution that helps businesses with customized interactions -  service oriented architecture
53 Cyclos STRO Online and mobile banking system for brokers -  banks -  and organizations that wish to conduct transactions in local currencies.
54 D3 Banking D3 Technology Banking system that helps financial institutions manage account opening -  customer support -  & administrations operations.
55 Deposit Solutions Deposit Solutions Open banking solution that enables you to connect bank deposits and depositors across Europe.
56 eBank.net Dais Software Enables banks to streamline workflow processes with biometric authentication -  e-invoicing and more.
57 ebankIT Ebankit Assists financial institutions with customer service -  account opening and augmented reality.
58 EBANQ EBANQ Holdings User-friendly online banking software in the world. Online in 24 hours with the own branding.
59 ENNOXX.BANKING Ementexx Banking and communication platform that enables you to manage information about accounts -  payments and other.
60 Enova Decisions Cloud Enova Decision management SaaS that enables the mid-market to apply AI to credit -  fraud -  and marketing decisions.
61 EpaySuite Canopus Innovative Technologies Ready-to-implement core banking and payment software platform and SaaS for Fintechs and Digital banks
62 Fin Superb Cooperative Society Software Mini Banking software for small cooperative banking operations.
63 Finacle Infosys Technologies Addresses the core banking & web based cash management requirements of retail -  corporate and universal banks worldwide.
64 Financial Banking System Byte Covers all operations of a financial institution with more than 80 modules that can be assembles according to the needs.
65 Finantix PotentiaN Improves customer service and new business opportunities by integrating channels and banking systems for users and clients.
66 FinCraft Nelito Systems Offers unmatched deployment flexibility -  superior scalability and unique functional features that add
67 FinFlowz Profinch Solutions Helps banks with end-to-end branch automation -  branchless banking and agency banking.
68 FinnOne Neo Nucleus Software Cloud-based loan servicing solution that manages end to end loan life cycles by streamlining all workflow operations.
69 FinX Teknospire Digital banking platform that helps banks manage users/agents -  online payments -  transaction data -  and other financial services.
70 Finxact Finxact Core-as-a-service banking system software backed by the American Banking Association and Suntrust.
71 FIS Modern Banking FIS Cloud-native core banking platform designed with API-first functionality that puts you in control.
72 FISA-System FISA Group For the automation of most of the process of a modern financial institution.
73 FISCAL SPREADING FISCAL SPREADING Financial statement spreading and analysis for community banks and credit unions
74 FMS.next PROFILE Digital Banking platform successfully addressing global Financial Institutions and FinTech needs
75 FORPOST FORBIS Current commercial and organisational needs of a bank of any level and size.
76 Franktek Microsystems Sacco Software Franktek Microsystems In Kenya is a complete solution for managing bank clients -  loans -  savings -  and shares.
77 Fusion Essence Finastra Fully integrated cloud-based core banking solution -  creating the foundation for a digital future.
78 G3 TrustQuay Private banking and investment management system designed for the needs of international private banks operating both on and off-shore.
79 Holvi Holvi Modern financial service for the new wave of European entrepreneurs.
80 I-Bank 4.0 Core Banking System Ocean Software Technologies Tools that help gain more control over every critical area of Banking & Finance.
81 iBanking iCrats Core banking for banks -  NBFCs/FinTech companies -  co-operative banks -  Nidhi Companies -  and private banks.
82 iCBS Virmati Software & Telecommunications iCBS is Centralized Core Platform for the Banks for Retail/Corporate/Government/Treasury Forex/Remittance & other business functions
83 ICBS BML Istisharat ICBS Conventional & ICBS Islamic are Customer-Centric business oriented software covering Banks and Financial Institutions activities.
84 ICS BANKS ICS Financial Systems A cloud-based management software -  delivering maximum value to customers -  staff and managers of banking clients of all sizes.
85 iMAL Path Solutions Provider of Digital & Social Banking -  Mobility -  BA -  RM -  Compliance & AAOIFI-certified core banking software.
86 IMEX Surecomp Trade Finance Banking System. Browser-based Thin Client solution in conformity with ICC regulations.
87 Infocorp Web Banking Infocorp Group Omnichannel platform that centralizes all the banks channels -  and helps people love their bank.
88 Interact ieDigital Online banking platform which enables interaction between back office and contact center through financial service providers.
89 Ken-CBS Kensoft Infotech Integrated & comprehensive Enterprise ready banking software solution.
90 Keybank KBS Solutions Integrated landing platform - encompassing accounting  - multi-currency and  - multi-branch capabilities.
91 Kiya.ai infrasofttech AI-based Omnichannel and Open Banking solution
92 Levenger 3Core Software Levy management software for financial service industry.
93 LiveBank Ailleron An omnichannel platform for instant communication over chat -  video -  audio and social media -  optimizing remote advisory processes.
94 Loan Performer Crystal Clear Software Software for microfinance organisations with 300 clients and 700 installed sites.
95 Mambu Mambu A the leading SaaS banking engine powering innovative lending and deposits. A cloud-native solution driving open API-enabled architectures. Mambu helps clients to successfully start up new business ventures -  transform existing operations -  launch new products and expand into new markets.
96 Matrix mid Five Degrees Solutions Modular banking platform that delivers a flexible -  customer-focused banking solution.
97 MBanking MoadBus Mobile banking solution developed with international banks in mind -  supports multi currency and multiple languages.
98 Metabanka Metada Multichannel banking product management platform for creating customer offers -  pricing -  rules & operations.
99 miRevenue Zafin Labs Relationship banking solution to manage product lifecycle -  relationship-based pricing -  centralized billing -  loyalty management
100 MOBIS Ensibuuko Technologies Cloud-based banking software with integrated 3rd party technologies -  accounting -  and SMS alerts.
101 Moneyman Aceway Software Moneyman is cash management software for the small to medium business -  either through brokers/agents or direct.
102 MULTIVERSA DXP - Digital experience and integration platform CoCoNet Solution for banks to create a future-proof digital platform to increase customer satisfaction and acquisitions.
103 MyAzimia MyAzimia Cloud-based peer-to-peer microfinance software that helps manage loans -  customer database -  multiple currencies
104 Naqoda Banking Platform Naqoda Provides a core banking platform that helps financial institutions automate business processes.
105 nCino nCino Cloud banking system through its integrated CRM and loan lifecycle management.
106 Neurona Axon V3 Neurona Software that works as a transactional switch specialized in managing electronic money transactions.
107 NexorONE Banking Systems Serves a broad variety of financial entities such as: Online and Private Banks -  Credit Unions -  eWallets and Trusts & Asset Management Companies. NexorONE has already been deployed to more than 300 financial entities worldwide -  spread throughout 40 countries and in 16 languages. Features include a customizable responsive interface -  user groups and admin roles -  compliance rules (KYC -  AML -  etc.) -  API's and continuous updates.
108 NGDATA Intelligent Engagement Platform NGDATA More than just a CDP -  NGDATA focuses on engagement-based outcomes -  that provide clients with the best results.
109 Nidhi Company Software Adysoft Features for daily cash -  savings -  and loan accounts -  with module integrations for multi-branch -  multi-user -  etc
110 Nidhi Software Hubco Technologies Managing FD - RD - Saving and all types of loans between customers and support Debit card -  IFSC - and more.
111 NLS Banking Solutions NLS Banking Solutions Custom software and database development company delivering world-class services -  products and solutions for Banking Industry globally.
112 Nordigen Nordigen Transaction data API (Open banking) analytics platform for building powerful applications and customer experiences.
113 NovoDoba Abba Banking system that helps manage bank databases -  financial services -  and other operations across locations.
114 Nymbus Core Banking Nymbus Enables financial institutions to de-risk their growth strategy and future-proof their adaptability.
115 Odessa Platform Odessa Browser-based lease and loan management system designed to support the entire lifecycle of leases -  loans and assets.
116 Odin COLD Integrated Financial Systems COLD/ERM -  Remote Check Item Capture -  Low Cost Document Imaging Solutions for the Financial Industry.
117 Ohpen Ohpen Modular core banking platform that streamlines fund management -  CRM -  administration of savings and investment accounts.
118 OLYMPIC Banking System ERI Banking information system that incorporates front and back office -  monitoring tools -  and a communication system.
119 Omnichannel Digital Banking Platform ModeFinServer Helps banks in delivering seamless digital experiences across devices to their customers.
120 Open Banking Platform Portfolio+ Banking platform that connects financial services technology to help clients be in control of their financial data.
121 Open Source Loan Origination System DigiFi Loan origination tool to automate lending process by managing documentation -  application processing -  customer support -  e-sign & more.
122 OpenCBS Open Octopus On-premise and cloud-based solution that enables businesses to streamline processes related to document tracking -  accounting
123 Paynote Paynote Bank-to-bank payments platform targeted at freelancers and agencies.
124 Payveris Payveris Open API -  cloud-based MoveMoney Platform enables financial institutions to control -  simplify and extend digital payments.
125 PayX HBS Technologies Multi-agent -  multi-channel -  multi-currency -  and multi-lingual transactions processing software for the financial sector.
126 Productfy Productfy SaaS platform to build and integrate Fintech applications or add banking services quickly -  securely and cost-effectively.
127 Q2 Platform Q2 Software Software that helps community banks -  regional banks -  and credit unions deliver mobile enrollment and online banking services.
128 Q4 Wealth Management System Quantifacts Trust fee modeling -  analysis -  optimization and reporting for trust banks.
129 RegAdvisorPro Continuity Provider of RegTech solutions that automate compliance management for financial institutions of all sizes.
130 Rockall Rockall Transforming collateral management
131 Rubikon Neptune Software Group Banking solution with modular components offering scalablity -  performance and fast implementation.
132 SAFI Banking EFISYS Online banking platform offering electronic transactions and mobile tools.
133 SDK.finance Digital Retail Bank SDK.finance SDK.finance Digital Retail Bank Future-proof Core Banking Platform
134 SecurePaymentz SecurePaymentz Cloud-based banking system to streamline banking and transactions and administer affiliate and bitcoin system .
135 Siena eTrader Eurobase International Multi-asset -  multi-venue electronic trading system that provides limit order management -  pre and post trade processing.
136 SMART System Advanced Financial Technologies All-in-one underwriting and pricing software solution for mortgage bankers -  banks and lenders.
137 SmartAnalysis Trintech Bank statement analysis tool
138 SNL Banker SNL Financial Internal banking reporting solution with proactive -  effective management of key performance indicators such as risk -  cash and growth.
139 solarisBank solarisBank AG Enabling the business to offer financial services by building the own banking products with the API accessible banking platform
140 Sopra Financing Platform Sopra Banking Software Provides banks and specialized lenders with an unrivaled solution for loan servicing.
141 Sovereign Finzsoft Solutions Sovereign finance & banking software for lending/investments and automated loan origination.
142 SpeciVim Specitec Banking systems management platform that provides KYC solutions through centralized client database -  onboarding
143 SQN: Safe Deposit SQN Banking Systems Safe deposit management and fraud detection application with virtual safe box for easy document access and visitor logs functionality.
144 Stacc Insight for retail and SMB STACC Module-based platform solution -  enabling financial advisors to give precise advice based on unique customers insigh
145 StarCARDMAN HMA STARware Debit Card and ATM management solution for banks with high volume of transactions.
146 Strands Finance Suite Strands Enable banks to offer personalized customer experiences and create new revenue streams.
147 Symphony ALSEGO Banking Middleware: Reduce costs and automate the business processes.
148 TCS BaNCS Tata Consultancy Services Solutions to manage treasury -  payment processing -  wealth portfolios -  loan origination -  and more.
149 TellerGraph Castle Creative Services Manages bank branch staffing costs and improves customer service with advanced statistical modelling.
150 Temenos Transact Temenos Group Cloud-based banking management tool that helps with transaction processing -  operational scalability -  product designing -  and more.
151 Tipalti Tipalti Remits supplier payments on the behalf in 6 different payment methods (US ACH -  international ACH / eCheck -  wire transfers -  PayPal -  prepaid debit card -  paper check) and in 120+ currencies to over 190 countries. Tipalti also offers early payments seamlessly integrated into the process -  making it easy for suppliers to get paid early.
152 Titan Central Software Core Banking Systems with modular components providing a comprehensive banking solution.
153 TLM Platform SmartStream Technologies Transaction lifecycle management solution that enables businesses to manage liquidity -  collaterals -  reconciliations -
154 TOPAZ Banking Stefanini Modular system that supports institutions of varying capacities and complexity.
155 Trade360 CGI Group Global trade platform that offers corporate portal -  cash management -  payables -  and receivables functionality.
156 Treasury Prime Treasury Prime Helps banks and fintech companies expand their services.
157 TrustBankCBS Trust Group Browser-based solution with core banking -  e-banking -  and branchless banking capabilities.
158 Ultimate Digital Banking Solution Alkami Technology Software to analyze account data -  transfer funds -  and make loan payments.
159 union System Global Union System Global Core banking solution that helps with data migration scripts & blue print documentation.
160 Union.core Union Financial Technologies Core Banking -  Credit Scoring and Digital Engagement. Combine for a full Bank In a Box solution.
161 Unity Loan System Credex Systems Loan Processing System. Features: Application Processing; Calculation of interest -  insurance and fees
162 Universa Smart Solution Integrated -  enterprise banking system.
163 Vault Thought Machine Cloud-native -  core banking platform.
164 Velmie Wallet Velmie End-to-end Mobile Banking and Wallet platform available as a White-Label Solution
165 VeriBranch VeriPark Empowering bank tellers -  sellers and advisors to efficiently execute transactions
166 Websoftex Core Banking Websoftex Software Solutions Web-based multi-branch application for managing back office needs of banks.
167 WIREinfra Bankinfra Technology Automate wire transfer process. Features include ticket printing -  automated OFAC scanning -  etc.
168 Xelerate SunTec Business Solutions Banking system that helps commercial/corporate banks manage invoices -  billing -  consolidated statements using drill-down functionality.
169 zeb.control zeb Bank information system that addresses all aspects of modern bank management
170

Banking as a Service Providers

Banking as a Service Providers in Europe that offer the core banking capabilities and the brand that faces the consumer can be different entities. For example, Grab, which began as a ride-hailing service in Singapore, has embedded payment services and its own wallet into its Uber-like app, so it now also provides e-commerce, mobile and point-of-sale payment services through an API-driven platform. For Grab, the Dutch payment company Adyen, with its own banking license, functions as the license holder.

 

It has been projected that banking platform as a service currently produces $29 trillion in the e-commerce market and TPPs are producing solutions that offer customers more choice and greater convenience.

 

This structure is useful for service providers that want to market themselves as being as similar as possible to a licensed bank, with comparable capabilities, offering equivalent services such as current accounts, savings facilities, and debit and credit cards. With BaaS, the payments company offers this range of services without actually having to hold a banking license itself. By engaging with a regulated bank via the BaaS platform, the payments company has the advantage of offering banking products to the public at a lower cost because it saves time and money by not having to obtain the necessary regulatory licenses required to offer certain banking products and services. It can also rely on the technology infrastructure of the bank which frees up time and cost for the payments company to focus on its business strategy.

 

For banks, the benefit is that they can build relationships with the fintech sector, allowing for collaboration rather than competition. As well, by monetizing the banking as a service companies facility, fintech activity becomes a revenue source for the banks. Fintechs also have the flexibility to respond quickly to the changing needs of customers, and so collaboration with them allows banks to continue benefiting from mobility embedded in the platform.

 

Banks have a high cost of maintaining compliance with regulation and despite spending billions, often do not build developer and brand-friendly APIs. It is this gap that the Banking as a Service providers fill. Some banks have already recognized the digitalization trends that have swept across the industry in recent years and as a result, will be better positioned to support TPPs than those that have stuck with more traditional systems and infrastructure, and so will be able to move into the BaaS arena more seamlessly.

 

The benefit for end-customers is that they receive the best of both worlds: the convenience of financial services through an on-demand digital platform and the depth and robustness that come from a licensed, regulated banking institution.

 

BaaS offers a radically different approach to financial services, that dismantles the traditional banking model and places its component pieces into the hands of a wider range of players.

Banking-as-a-Service market size and forecast

According to the Global Banking-as-a-Service (BaaS) Market report, the market was worth USD 637.40 billion in 2022 and is expected to reach USD 6,944.9 billion by 2030, expanding at a CAGR of 32.9% from 2024 to 2030. The high growth rate can be attributed to banks and financial institutions’ increasing adoption of BaaS services to provide innovative and flexible financial services to customers.

 

Growth drivers for the BaaS market are:

  1. Rapid Digital Transformation: The rapid digital transformation of banking services is one of the primary factors propelling the expansion of the BaaS market. With the increasing adoption of digital financial services, banks and financial institutions are seeking innovative ways to serve their customers more efficiently and effectively.
  2. Increasing Presence of Innovative New Players The BaaS market is also being driven by the increasing presence of innovative new players. These companies are introducing BaaS solutions that are more efficient and cost-effective than traditional banking services. This has led to many banks and financial institutions adopting BaaS services.
  3. The presence of application programming interfaces (APIs) is another important factor driving the expansion of the BaaS market. APIs enable banks and financial institutions to offer their services to third-party companies, allowing them to provide a vast array of financial services to their customers.
  4. Increasing Demand for Digital Financial Services Another factor driving the expansion of the BaaS market is the increasing demand for digital financial services. Customers are seeking more flexible and innovative financial services that can be accessed via multiple channels, including mobile and the web, as the use of digital financial services grows.

 

Competitive Environment

The report on the Global Banking-as-a-Service (BaaS) Market provides a comprehensive analysis of the market’s competitive landscape. The report contains a comprehensive analysis of the market’s leading players, their market share, and their product offerings. Finastra, Solarisbank AG, BBVA, and Saxo Bank are among the leading market participants.

 

The market for banking as a service (BaaS) can be broken down into two categories: large enterprises and small and medium businesses. Large businesses currently command the lion’s share of the market and are expected to post the fastest compound annual growth rate (CAGR) over the course of the forecast period. Banks currently hold the largest market share and are expected to grow at the highest projected CAGR in the BaaS market. The BaaS market can also be segmented based on the end user, which includes NBFCs and the government. The market for BaaS is further subdivided into several categories, one of which is geography. These categories are North America, Europe, Asia Pacific, and the rest of the world. Competition in the banking industry is becoming more intense as a result of the rise of financial technology and neo-banks. Modern core banking systems make it possible for newcomers to the industry to disrupt markets that have become stagnant and create value through rapid onboarding and customer retention.

 

Third-Party Provider

As a typical model, BaaS will involve a Third Party Provider (TPP) gaining access to a bank’s systems, which means the bank then allows the TPP to use its APIs to interact with customer data. Once the TPP gains access, it should be able to create and offer banking products and services using its systems. Some of the most important banking functionalities that can be made available to service providers include payments, back-office operations, risk management, compliance and customer service.

 

There are three basic elements involved the banking as a service business model:
Brand: The company providing the services embeds financial APIs into its customer offering;
Service provider: The company that supplies modular financial services to brands as a service;
License holder: Typically, a licensed bank that partners with service providers which in turn enables partner brands to provide compliant financial services.

Banking as a Service vs Open Banking

This has many similarities to the new form of finance management known as Open Banking, but there are distinct differences between the two. BaaS is primarily a platform that exists under the umbrella framework of Open Banking. Open Banking is focused on offering transparency to customers by providing them with information on the various features of different bank accounts and BaaS requires this structure in order to gain the trust and confidence of the customers. One primary difference between BaaS and Open Banking is that the latter’s customers are transacting directly with their own designated banks, whereas with BaaS platforms it is the service provider itself with which customers interact.

 

Platform Banking:

Until very recently, there was only a single general definition of what actually defines banking in terms of how it presents itself to the customers. People and companies dealt with physical banks through face-to-face interactions in bricks-and-mortar branches. Now, with the rapid growth of a new model of banking that is based on digital banking as a platform (baap) that interfaces through computers and mobile devices, there is a split, which can be phrased as comparing banking as a platform vs banking as a service.

 

Platform Banking Defined:

Platform banking can be described in terms of the relationship between the bank and the customer, where the bank ‘owns’ the customer and provides all the required services.

 

Banking as a Platform

The platform model is based on connection rather than control. Outside of banking, familiar companies like Airbnb and Uber use this to run scalable, cost-effective operations that connect consumers directly to the services they want.

There is now a driving force that will make every bank, at least to some extent, require a platform model. Starting in 2018, the PSD2 regulations in Europe force banks to open their systems via interfaces for account information, services and transactions. Banks are becoming banking platforms by way of regulation, to which third-party companies have access.

 

In banking as a platform (baap), the bank is seeking to provide services and experiences to its customers through a digital interface over the internet. By either designing and building suitable applications, or engaging third-party software and services technology firms, the bank will provide applications, servers, storage and networking to open its services via the internet.

 

With digital banking as a platform (baap) , banks focus on their core functions, which are to deliver products, services and experiences while leveraging their infrastructure, platform and scale. The goal is to gain a foothold in the digital banking sector while reducing development time and cost, and to provide most products and services across a single portal for the customer.

 

Probably the most advanced platform for the banks is the payments platform, which created a change in the way payments are made. It has been responsible for making payments cheap, real-time, fast, and simple enough to complete on a mobile device. Numerous examples of payments platforms abound, with the most prominent being PayPal, Square, and Apple Pay.

 

Finding the best Banking as a Service platforms

Any business that wants to introduce fintech products or services like online banking, credit financing, credit management and credit scoring, cash flow optimization, branded credit/debit cards etc. is facing the very expensive and lengthy process of creating all of these facilities from scratch, as well as getting the necessary regulatory approvals.

 

By being able to choose from the best BaaS providers that offer premium Banking as a Service software, you will get everything prepared and ready to go. That’s why getting advice from the experienced banking consultants at Money-Gate can make the road smooth and fast, and save you time, effort and money.

With our help, you could be providing complete fintech services for your customers in less than a month and at a small fraction of the costs of doing it yourself.

The rapid development of BaaS platforms over the past few years has made the range of choices its own hurdle. This is where expert advice from our experienced team at Money-Gate can assist you. Before taking any chances, you should talk to us and find the one that best meets your needs.

The best Banking as a Service platforms can open the doors for core banking software as a service to slot right into your company’s existing infrastructure. Cloud based core banking solutions let you deploy and manage the financial infrastructure without adding physical facilities like servers, firewalls or routers and without the need to set up additional security services. All of this is built right into the service provided by the cloud. Cloud core banking operations and financial services work with a seamless interface between your financial infrastructure and your selected bank or fintech company that gives you a way to integrate into their systems using a third-party BaaS app on your website.

 

Banking as a Service needs to provide for a wide range of needs, including:

Core banking services such as

  • Payments
  • Loans
  • Mortgages
  • Customer accounts access
  • Credit/debit cards, especially branded cards
    Know Your Customer and other regulatory compliance
    Credit scoring.
    Currency exchange services.

When introducing BaaS systems, companies will integrate the financial infrastructure of providers into their business stream by integrating the APIs of their chosen provider.

It’s essential for companies taking their first steps into BaaS to have experienced and expert advice. Our team of banking experts here at Money-Gate brings you more than 12 years of hands-on experience on behalf of corporate customers in the field of digital banking. Let us be your partners in choosing the right BaaS platform that meets your specific needs.

 

Some of the best-known core Banking as a Service providers in European includes:

SolarisBank – Europe’s largest BaaS platform provider, based in Germany. Provides digital banking services, branded debit & credit cards, consumer finance, KYC.

Railsr – based in the UK. Provides the widest range of BaaS products through its Embedded Finance Platform. Facilities include Financial operations, Card program management & payment processing, Digital asset management, Settlement & clearing, and AML transaction monitoring.

Treezor – based in France. It is already established as an EMI authorized by the French regulator to operate across the EU and is a principal member of the Mastercard network. Provides access to the entire payment chain via its BaaS API, from receiving to issuing payments.

Bankable – based in the UK. Provides services like Virtual ledger manager (allows companies to improve cash management and reconciliation); Digital banking (IBAN accounts, payment cards; Payments through SEPA and SWIFT); Payment card API (offers a branded consumer card program conforming to PCI-DSS).

 

FAQ
What is the definition of core Banking as a Service?

There is no single definition of what Banking as a Service (BaaS) is. The closest thing that can be applied is to describe what BaaS does. Banking as a Service is a type of “white-label banking” where a business enterprise can offer its customers the kinds of financial services usually associated with banks or financial institutions, solely by employing third-party facilities like back-end cloud-based computer services and applications.

 

What does a core banking system do?

A core banking system can be defined as the back-end system of a financial enterprise that processes transactions, updates customer’s accounts and interfaces with common inter-banking financial platforms like SWIFT and SECA for movement of funds between the enterprise and other financial institutions. Core banking systems should include shared capabilities for deposit, loan and credit processing and should interface with the company’s general to general accounting and reporting systems.

 

What is a core banking system architecture diagram?

Core banking system architecture is the basis of efficient cloud services and digital banking.

The basic purpose of the architecture diagram is to provide the following basic abilities:

  • Operational Excellence
  • Security
  • Reliability
  • Performance Efficiency
  • Cost Optimization
  • Sustainability
  • Business Agility
  • Cost Reductions

The architecture must support the financial institution’s critical banking processes like accounts, payments and credit/debit cards, and for processes like marketing, regulatory reporting and CRM.

 

What is Banking as a Platform vs Banking as a Service?

In Banking as a Platform (BaaP), the bank is providing services to its customers through a digital interface over the internet built on its own applications, servers, storage and networking. With digital BaaP, banks focus on their core functions, which are to deliver products, services and experiences while leveraging their infrastructure, platform and scale. The goal is to gain a share of the digital banking sector with reduced development time and cost, and to provide most products and services across a single portal for the customer.

Banking as a Service (BaaS) is the plug-and-play banking equivalent to Software as a Service (SaaS) that enables users to access the bank’s financial services over the internet through the bank’s provision of their infrastructure via third-party service providers such as financial-technology firms (fintech), that are offering retail banking services, through the use of application programming interfaces (APIs).

 

 

 

 

About the Author: Gilad Oren

Founder & CEO of GBO International Financial Services, with 25+ years in finance and online marketing. Former private banker turned entrepreneur, specializing in global corporate services for gaming and crypto sectors. Expert in integrating traditional finance with innovative fintech solutions. Let's connect in LinkedIn: https://www.linkedin.com/in/gilad-oren-326231220/

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