Digital financial service is the new landscape, and Banking as a Service providers & startups are the backbones that pave the way for a new reality.
Banking as a Service or BaaS achieves building functional, efficient solutions with Banks, Fintech, service providers, brands, and interconnects environment, gain their respective benefits, and provide spot-on adjust strategies.
BaaS has become more fine-tuned to reflect clients’ needs and will attract new customers. It also adds valuable revenue streams, better client profiling, establishes relationships, and manages them efficiently.
However, there’s the question. Is Banking-as-a-services oriented with APIs and applications work as it is responsible for providing long-term efficiency scalability, reaching a vast audience?
In this post, you get a comprehensive understanding of BaaS to understand about best Banking as a Service provider & startups in 2022.
So, stick to the conclusion!
What is Banking as a Service?
Banking as a Service (BaaS) is a system that empowers non-bank businesses, companies, organizations to get/ enclose financial services into their brand. BaaS is also known as white-label banking.
For instance, businesses that are not licensed, however, banks may provide loans or payment options to customers by merging their business system with digital banking.
As a result, to implement this procedure, either the bank creates its platforms or uses a third-party service provider that offers BaaS solutions.
It is a complete model to connect digital banks or third parties-providers with banks’ systems directly through APIs.
It regulates the businesses’ infrastructure, builds a banking system with the top of the providers’, and helps to unlock the open banking possibility of reshaping the global financial services landscape.
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How does Banking as a service (BaaS) work?
BaaS begins with three components that complete experience. Usually, it would be best to have fintech/Brands, digital or licensed banks, or BaaS providers/ third-party providers (TPP) that pay a fee to access the BaaS platform.
The financial institution opens its APIs to the third party that grants access to the system and information to make new banking products or deliver white-label banking services.
However, it gets ahead in open banking, legacy institutions that launch their BaaS platforms. It also opened up new revenue streams.
BaaS has two main monetization strategies:
- Charging clients, a monthly fee for access to the BaaS platform
- Using charge la carte for each service
BaaS providers take care to provide a complete solution for entrancing entire financial services into their client’s platforms. These include:
- Account management
- User interface design
- Risk assessment and management tools
- Products, and more
So, it’s essential to comprehensively know the benefits of Banking as a Service.
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Benefits of Banking as a Service
Financial operations are the most crucial aspect and advantage of any business, and Banking as a Service is considered an innovative digital nature.
Every edge of Business-as-a-Service involved can reap notable benefits from simplifying the process.
Let’s glance at it
1. End Customers
BaaS platforms add convenience, speed, and payment options that are considered some of the perks to enhance the customer experience.
The BaaS tool makes every transaction effortlessly pleasant. For example, you can apply for loans without visiting physical bank offices.
BaaS is one of the essential adoptions that embedded finance helps win the customers’ loyalty and earn more profits from these merged financial outgrowths.
Businesses/Brands also provide significant savings on the infrastructure necessary to adjust legacy banking services.
FinTech’s startups bring the unique hope to execute BaaS financial solutions within a tight timeline, on a reasonable budget, and despite having to acquire a banking license.
The BaaS layer provides the essential two-way data flow between banks and end customers.
BaaS providers provide commission fees and add revenue streams with innovative tactics that stand to gain a lot through the Banks.
It offers positive benefits to innovation that can help overcome legacy issues, secure a better position in a competitive market, and allow a two-way flow of user data in the financial association.
However, they also achieve new perspicuity in their clients’ purchasing and investing patterns.
3. BaaS Providers
Do you know? “According to a report, it is estimated that the global digital baking platform market will reach $8.67 billion by 2027. ”
BaaS sets up profits from the transaction fees the business collects for success with the deniable event of using innovative solutions that third-party make propel the industry forward.
Now understand, what is Baas, and its benefits? Let’s know about different Banking-as-a-Service providers & startups in 2022 that will dominate the market.
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Top 10 Banking as a Service providers & startups in 2022
BaaS is a rapid adoption platform based on banking outcomes and provides notable benefits to banks and clients.
About 79% of bankers state that the banking platform is a service that helps them to contribute to the massive customization of financial services and products. Conversely, about 77% of institutions streamline BaaS technology to connect to other companies.
BaaS enhances alliance between partners, enhances confidence, and provides pioneering BaaS strategies.
So, here are the best Banking-as-a-Service providers that hog the market. The list of top Banking as a Services providers & startups in 2022:
1. Solaris Bank
Solaris Bank is a Berlin-based technology company with a banking license that provides a comprehensively digital BaaS platform.
It holds an entire German banking license and has the right to merge with different business partners in almost any European country.
However, it is one of the best solutions for a modular model for seamless BaaS and demanding integration for customized financial services to particular business requirements.
It operates functioning such as bank accounts, transactions, KYC checks, or payment cards easily accessible through APIs. It is also set to shorten time-to-market, allowing partners to aim for the best value for clients with some reliefs of regulatory burden.
Bankable is a London-oriented BaaS company that provides various financial solutions. It enhances Fintech and financial companies to roll out new payment options for time, and cost-effectiveness also assists the client with general and technological circumstances.
Bankable provides e-wallet, virtual ledge managers, digital baking software, and payment card solutions. It also provides features PCI-DSS certification hosting in Tier-4 data centers for high-end security to stand out in the competitive market.
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3. Starling Bank
Starling Bank can’t be recognized as a pure BaaS provider but can be said to be a retail bank with BaaS operations.
It enables features such as FinTech’s, banks, and corporations to operate its license and provide their clients’ FSCS-protected accounts for keeping, transferring, and receiving funds in real-time.
It is a service platform that takes charge of smooth account opening, automated AML, KYC services along with regulation consideration, providing partners to launch and scale their personalized goods rapidly and efficiently.
Pi1 is a cloud-based BaaS platform that comes right after the most popular Fintech startup in the UK. Project Imagine and Dash devas launched it in 2019.
It supports Fintech and banks to undertake innovative financial solutions in a limited duration of three months.
Its traits Pi1 platform, third parties operate in 90 seconds with KYC check and get access to advanced analytics to watch the overall clients’ pathways and change their marketing tactics simultaneously.
5. Green Dot
With a Walmart partnership, Green Dot is a branchless bank that established its BaaS way to assist the unbanked gain access to banking services.
It provides complete payment options banking programs with marketing and branding services.
Green Dot assists a business with account opening, card issuing, payment processing, fraud prevention, and regulatory factors that allow partners to innovate and launch groundbreaking financial solutions.
BBVA is the first bank to launch a holistic suite of BaaS products and enhance third parties in the United States.
It opened an opportunity to implement their bold financial concept, supported through an agile and changeable model of BBVA.
It’s an open banking-as-a-service platform with features of various payment options, management, KYC, and KYC assessment procedures, account origination, card issuance, and many more.
7. Fidor Bank
Fidor Bank German digital-only rival banks that assist financial, retail, and telecom businesses in getting their digital banking concepts.
Its startup provides an end-to-end white-label banking solution with bank license around Europe with the proper technology, risk management, go-to-market tactics, enhanced customer experience.
It also helps design, test, and build its customer’s digital banking forecast into an entire service exclusive to the fidorOS (fOS) digital banking platform.
TrueLayer is an open banking fintech startup that equips an outlet to create financial apps that attach to bank data, platforms options, and verify accounts.
It provides its features to design clients’ SMB applications in several coverages, together with payments options, online lending, insurance, investment services, cryptocurrencies, and many more.
Treezor is considered a “one-stop-shop payment solution” and is an API-based white label core banking platform that performs and obscures the full payments range.
It provides more than 40 licensed and unlicensed facilities of payment management by allowing fintech customers such as neobanks, professional banks, and marketplaces.
Treezor offers their clients customized payment services such as wire transfers, peer-to-peer (P2P) transfers, account management, digital wallets, check to acquire together physical, virtual prepaid, debit, and credit cards with dedicated International Bank Account Numbers (IBANs).
Digit, oriented in San Francisco, California, helps users with their finance app for better clients’ understanding and management of their money. It analyzes every user’s unique needs and offers a digital solution that makes investing and saving more accessible than ever.
Digit entirely performs small amounts of money each day into a saving account to get the user closer to their financial goals and eliminate the stress and anxiety of money management for user-specified allocations such as retirement savings and vacation savings.
Its machine learning engine user interface takes care of spending patterns income into account when moving money when using money and even considers aims, balances, and bills, so users are never left with limited cash on their packet.
How to Choose Best Banking as a Service Providers & Startups in 2022?
It’s never late to decide how appropriate your business is to merge with a financial services platform. However, when choosing the best BaaS providers & Startups in 2022, you must take care of the following:
The Internet is something where nothing is hidden for long. Review reviews carefully do research properly, and testimonials to get an accurate opinion.
2. Service Relevance
Once you are done with reviews, consider the services offered by listed providers to ensure that they cover all your business needs.
3. Ownership Services
Ensure with every question regarding the APIs and solutions on offer powered by providers, companies, and third parties.
Understand the providers’ tech stack, resources, and stamina for prospects. Know that they can stay on your every need as their client base expands and helps in business needs or not.
5. Compatibility and Speed
Get the quick and reliable providers and deliver the solution your business requires.
There’s no doubt that businesses in other industries see the comparable potential to use platform models.
As a result, banks must comprehend their distinct competitive position, realize their advantages, and significantly increase what they may consider core business activities.
The future relationship between the bank and the consumer will be considerably more intimate and participatory.
However, getting there from here will include significant changes in Business and operating models and the way resources, business processes, and technologies are put together to produce value.