Banking-as-a-Service: Navigating a New Frontier – Part I & II

Banking-as-a-Service: Navigating a New Frontier – Part I & II

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Banking-as-a-Service: Navigating a New Frontier


“Every company will be a fintech company.” That phrase traces its roots back to a presentation given by Angela Strange in November 2019. Since then, many different versions of this idea have been splashed around in the media, all driving home the same point that banking isn’t just for banks anymore. This notion, that any brand can get into financial services, is a powerful one. But it misses a very significant point — for nonregulated companies in the US to offer financial products, they generally have to partner with an actual bank.

Banking-as-a-Service, or BaaS, centers on this kind of partnership, by which a regulated bank provides its charter to a nonregulated brand, enabling the latter to offer financial services to their customers. If this sounds like white-labeling, that’s because it is. But it’s also more than that — there are a slew of operational and compliance components that go into launching “bank,” and the actual bank underneath needs full oversight and visibility into how those components are being managed. That’s where BaaS providers come in. These technology-first facilitators help the bank to manage their BaaS operations, while working with fintechs or brands to set up all of the components they need to get to market, from their risk stack to their ledger.

Banking-as-a-Service: Navigating a New Frontier, II


In part one of this report, Banking-as-a-Service: Navigating a New Frontier, we took a look at what the BaaS model looks like from the bank perspective and how an emerging crop of BaaS vendors is setting the standard for this new way of distribution. In this second installment, we focus on banks that have decided to go direct, building their own BaaS platforms and managing their relationships and operations in-house.

BaaS is an extremely popular topic today, and for good reason — many banks are struggling on customer experience, and it offers a way to offload that piece to a third party while still collecting not only deposits but also fees and other revenue. How to do BaaS, though, and how to do it well are really hard for most bankers to wrap their heads around. This report offers best practices and case studies for those beginning to explore this new frontier and considering going it alone.

Download both reports here!

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