The digital transformation is underway and it is bringing about changes in all economic sectors and long-awaited social advances. The industry that beats the records with the highest market expansion rates in the world is undoubtedly finance.
As a response to this acceleration banks wish to keep up and streamline more innovative financial services. So, banking-as-a-service infrastructure and platforms are rigorously surging in demand. Thanks to the BaaS business model, ventures can integrate artificial intelligence into their offerings, have a competitive advantage and, hence, access new streams of revenue.
If you’d like to take advantage of all that, BaaS providers are there to help you on the track of managing, deploying, and delivering critical financial services to end users. What are the best providers, how to know which one suits you better and much more answered in this guide. Read on to find out.
What is BaaS?
More famous as Banking as a Service, BaaS is an end-to-end process, which enables the banks to carry out all financial services through an API or cloud platform.
The non-banks such as FinTech and non-FinTech businesses can connect their existing mobile and web apps to the cloud with pre-written software. The result of leveraging regulated financial infrastructure are specialized banking propositions brought to market in weeks, not months.
Beyond that, BaaS offers remunerative opportunities for everyone involved in it:
- New propositions being enabled in the market to meet customer needs
- Differentiating capabilities enabling market participants to win business
- Understanding the customer buying behavior and providing customized solutions
- Accessing the market within a short time period
What do BaaS providers do?
Providers are creating value in the BaaS ecosystem today. Normally, to acquire core elements of the baking tools, businesses reached out to the traditional banks’ distribution channels to build banking offerings in-house.
Luckily, providers expedite and simplify this daunting process by offering unique financial services propositions much faster and swifter. Essentially, they allow their partners to build financial products or services for all businesses by renting out their banking license, products, operations or technology for use. By joining capabilities and forces with other banks they compose a complete out-of-the-box BaaS solution for fintechs, start-ups and other companies.
Best 5 BaaS providers in 2022
SolarisBank empowers its customers to build their own banking products with a powerful German banking license. All the regulatory complexities of banking are handled, so you can focus on your business and invest your time into your customers.
The company offers two main solutions: digital banking and the issuance of cards. Both come with a full suite of features, such as:
- Offering SME loans to the customers in your own branding. Paperless, fast and mobile.
- Availing of the virtual IBANs system to build your own PSD2 compliant payment products or services.
- Onboarding your retail and business customers by verifying a customer’s legal identity with the digital KYC services.
- Leveraging a crypto-custody solution with digital banking services to make your business operate in the crypto market and safely keep and use crypto funds.
SolarisBank is trusted by innovators and entrepreneurs from different industries. No doubt, it will help you get up and running smoothly and securely.
ClearBank is the first fully regulated cloud-native clearing bank in the UK. Thanks to its progressive banking licence and robust technology solutions, ClearBank allows its clients to offer real-time payment and innovative banking services to their customers with as few frictions as possible.
To build a new payment product, financial institutions, fintech, crypto platforms, startups and other entities need to do a minimum of two things: construct the settling process of financial transactions and ensure their existing technology infrastructures can facilitate the new requirements.
Both can be quite tough to overcome. Thankfully, ClearBank has cracked the code to speed up your way to the market and, on top of that, reduce upfront implementation costs and allow the organization to increase the volume of revenue with its cloud-based API.
Railsr, or more widely known as Railsbank, is an embedded finance platform that supplies its users with simple Design Kits, use-case Guides and intelligent APIs. With Railsr you or your agency are able to integrate embedded finance perks into your customer experience using their APIs.
The company is driven by the dynamics of innovations in the digital banking landscape and thus, offers the most ground-breaking end-to-end operations and deep foundations. Some of them include:
- Financial operations
- Card programme management
- Card & payment processing
- Loyalty programme management
- Digital asset management
- AML transaction monitoring
- Data feeds to customer’s ERP
- Financial regulation licenses
- Visa & Mastercard licenses
- Payment scheme memberships
- Central bank direct currency clearing
- Credit licenses
The future behind embedded finance is definitely behind providers like that. Let us explain why. The main aim of this provider is to support and help customers use money around the world —- from virtual wallets and named accounts to facility transfers, exchanges, and multi-currency payments.
Aside from facilitating entrepreneurs launching new financial services, Currencycloud assists and aids traditional banks that are ready to change.
Currencycloud writes: “Banking as a Service (BaaS) is too often seen as a threat by traditional banking institutions. In reality, it’s an opportunity — it’s a new channel for banks to deliver more services and a better customer experience.”
The service actually proves this idea to be true, as those who take BaaS seriously are meant to win.
Treezor makes it possible to cover the entire payment chain: from card issuance to the creation of digital wallets, through the issuance of IBANs or the management of X-Pays. Apart from its main offering components, the provider also offers plenty of features such as credit or check cashing.
Practically, Treezor allows businesses to layer their own financial offerings on top of existing bank infrastructure swiftly and easily. All that makes ClearBank an exceptional provider.
How to choose the best provider?
When there are plenty of options it’s hard to choose but it’s important to keep in mind a few considerations that you may lean on.
Firstly, the provider needs to propose easy-to-use APIs for integration of the platform into your using system. APIs must eliminate costly and hard-to-maintain customization.
Secondly, think about the services you and your customers mostly demand. They have to be included without exception.
Thirdly, if you don’t want to come across risks with the integration in multiple systems, look for a BaaS platform provider which obtains all of its capabilities in one place, like account and card services. No one desires to be torn between multiple providers.
Also, not all providers possess required software to build banking products. That’s when white label BaaS software platforms such as Crassula come into play. You don’t need the hardware infrastructure of a traditional banking software suite to get started as its core banking software can be easily deployed via APIs.
Lastly, providers are obligated to give extensive documents for their APIs to simply integrate the platform. Besides they should also provide support like an implementation manager to help you in case you encounter any problems.
Companies can be digitization ready and shape financial services on their own. That’s the unique beauty of Banking as a Service platforms. No wonder why they are becoming more and more popular. With their enabling financial services to emphasize client-side operations and core competencies BaaS platform providers open up numerous possibilities.
Indeed, there are many providers but let’s look at it positively. It increases the chances of startups and businesses of all types and sizes to choose the perfect fit for their financial services from dozens of excellent options.