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HOW BANKING AS A SERVICE EMPOWERS GROWTH

Integrating non-bank businesses with financial services enables for ubiquitous services.

Finastra predicts the total market opportunity for BaaS will exceed $7 trillion by the end of the decade. BaaS is essential to promoting growth and addressing the demands of an expanding digital business ecosystem

According to McKinsey, 

“Companies of all types and levels of maturity – including retailers, telcos, big techs and software companies, car manufacturers, insurance providers, and logistics firms – are considering and preparing to launch embedded financial services to serve business and consumer segments.”

A BaaS unique technology enables fintech and banks to get integrated via API so they can build a regulated and licensed financial services proposition and deliver core banking-type services at the same time. 

Banks are already creating new ecosystems to enable them to operate and compete in this open-world

Below are the following trends that made the adoption of BaaS mandatory:

The active growth of digital banking

While most traditional banks are rebuilding their structure to follow up the rapid digitalization rate. Most recent payment methods  including e-wallets and payment apps are challenging banks on faster technology reorganization and improvement. 

The BaaS opportunities successfully replace these banking functions and offer a more ubiquitous and wide field for an activity for non-banks.  

The rise of Open Banking

Open Banking provides consumers and corporations a safe and secure method of transmitting financial data via API. API acts as an intermediary between different applications that allows them to swiftly and securely interchange data.

While open banking API provides access to consumer data, BaaS API as a part of Open Banking also presents a framework that provides access to banking functionality. 




BaaS services empower businesses to expand the borders of their activities and enhance operativity. The increase in demand for banking-as-a-service infrastructure can be explained by the way it improves business values and offers innumerable opportunities for expansion of the market. 


  • An embedded BaaS makes it possible to provide better interoperability between the services in an ecosystem

The rapid digitalization demands from all payment landscape members to be digitally well-equipped to be able to provide end-to-end services and drive innovation. 

Most traditional banks typically are slow in this regard. The BaaS Services providers enable digital orchestration. 


  • Growth model and business capabilities

The cutting-edge technologies offered by fintech will enable market leaders to enrich their services propositions and improve customer acquiring rates. 

End-users of BaaS services have the opportunity to boost the customer reach by offering a more comprehensive set of services. Diverse industries such as the clothing and food industry refer to BaaS platforms to contribute to the best customer experience. 

BaaS providers are enabled to provide a superior service to their customers since a higher level of technology and innovations empower them to embed their products on a wider range of products and thus expanding the range of propositions.  


  • BaaS enables seamless regulation compliance

In recent years banks witness rising compliance and regulation requirements. The compliance demands greater technology investments. However, collaboration with fintech provides incumbents with extensive capabilities both in technology and regulation, reducing costs on digitalization and modernization.

The BaaS solution provides a better path forward in this sense eliminating the need for complicated regulatory and documentary work. 


  • Enhanced customer experience

BaaS services are centered around the customers. The companies have the opportunity to boost products they sell with attractive incentives such as rewards, points, and bonuses to attain the customer and boost the revenue.

Customers increasingly search for a simple, direct, and integrated experience. The Integrated BaaS model perfectly fits this notion as its orchestration capabilities which enables end-users for fast and differentiated frictionless services in one place. 

BaaS drives innovation and leverages the power of API and cloud technology to enable the incorporation of banking services into the products and ecosystems, rapidly changing demand for more agile services prompts payment service providers to embrace new technologies to stay afloat.


ABOUT GUAVAPAY:

GUAVAPAY BaaS services empower the growth and development of your business and enable you to take control of finance management.

A global digital ecosystem comprising of highly differentiated payment services and various technological propositions such as API and white label the full scope of payment transactions. 

Get in touch today to learn more about GUAVAPAY opportunities and contact our team at info@guavapay.com!

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