What’s Next for BaaS: Revisiting Risk, Infrastructure, and Channels

Banking-as-a-Service: Navigating a New Frontier – Part III

Business challenges and regulatory pressure have pushed BaaS sponsor banks and their partners to revisit their operations, pivot their strategies, and in some cases, drop out entirely. This report looks at the state of the BaaS market, what went wrong with it, the way forward for sponsor banks, and our outlook on the future of BaaS and embedded finance

Key Findings of the Research

  • BaaS grew too fast when fintech was on a hot streak. The pullback in fintech funding in 2022 is a rapid contraction.
  • Problems for BaaS have almost always been rooted in poor controls within the BaaS Strategy
  • BaaS is not for all Banks. The need for BaaS expertise in compliance, risk management, governance, audit, and technology is a must requirement.
  • BaaS industry’s recalibration is healthy for the industry.
  • Expect to see regulators get a better grip on BaaS with normalized BaaS risk and compliance management.

What's Next for BaaS: Revisiting Risk, Infrastructure, and Channels Report!

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