How Banking as a Service Changes the Finance Industry

While BaaS is still developing and finding ways to become a mass-adopted solution, reviewing its crucial perks is a must. For this reason, it’s more accurate to check BaaS benefits for customers, enterprises, and, of course, banks. Let’s start by taking a closer look at how customers will benefit from this technology:

• A more diversified choice of services. The good news about BaaS for customers is an option to have a wider choice among various financial services. Since the business logic behind BaaS is that organizations seek customers, enterprises aim to deliver operational excellence. One prominent example is the introduction of personalized features, which are virtually non-existent in conventional banking systems.
• User experience enhancement. Technically, the traditional banking system looks old-fashioned, especially from the user experience standpoint. An option to get all required services in just a few clicks, ranging from loans to nuanced transfers and electronic payments, is something that boosts customer experience considerably. Thanks to the BaaS functionality, it’s entirely possible for users to get a top-notch experience, which stands out from the existing market alternatives.

While it’s clear that BaaS has an untapped potential for boosting customer experience, reviewing how banking as a service providers benefit from it is relevant too:

• Banking without banking capacities. For an enterprise delivering BaaS solutions to its customers, getting all required regulations can be too much of a bargain. Thus, becoming a third-party mediator between the financial organization and the intended audience is more convenient. This way, enterprises deliver top-notch solutions associated with banking, such as payments or loans, without the need to pass all required regulations.
• Business continuity. While it’s clear that a mere integration of the third-party solution is always viable, some services rely on complex infrastructure too much. In other words, some enterprises need a digitally innovative service without completely reshaping their infrastructure from scratch. For this purpose, delivering banking solutions as a mediator is an excellent way to satisfy all customer needs without too much hassle.

And since BaaS providers cannot function without banks, they benefit from BaaS, too, forming an ultimate win-win-win solution. In particular, banks benefit from this approach by:

• Increased revenue without intense workloads. It’s common for a neobank or a modern financial institution to operate through the cloud to deliver its services. This model means utilizing the existing infrastructure to process more clients from alternative channels. Without the considerable investment for development and efforts to attract customers, delivering financial solutions is a top-notch option for a modern banking institution.

A comprehensive operational picture. Modern banks sometimes struggle to get proper feedback on their service quality. The customer journey becomes more transparent when operating under the BaaS model, allowing banks to gain valuable insights for further changes. From this perspective, financial institutions get valuable input, which can be translated into introducing more functions or fixing the existing errors.