Through APIs, BaaS providers have been able to offer a banking infrastructure that can be built and put into use in a matter of months, without requiring financial licenses or large rounds of funding for most uses. APIs can be thought of as Lego blocks that fit together to construct a banking core framework—a user can be established and transactions can be completed through a sequence of API calls. Then, to set up deposit accounts, debit or credit cards, and loans, more customization is added. The BaaS model begins with a fintech, digital bank, or other third-party provider paying a fee to access the BaaS platform. The financial institution opens its APIs to the TPP, thereby granting access to the systems and information necessary to build new banking products or offer white label banking services. With banking as a service, organizations do not have to create fintech applications from scratch.

Providers can host these marketplaces by including solutions from their partners to increase brand loyalty. Initial BaaS partnerships were between banks and API-first fintech companies. More recently, API-first tech companies are entering into BaaS partnerships. These partnerships will potentially extend to all companies in the future that adopt API-based business models. The BaaS solution can be integrated into any non-bank business, such as consulting, transportation, financial advisory etc., that is willing to start offering financial products to its customers. Keep your bank relevant amongst the evolving financial services industry.

Banking as a service providers offer a range of solutions that can be integrated by either financial and non-financial organizations into their platforms. By providing BaaS solutions, it is possible to increase revenues and improve customer engagement. According to PYMNTS, US lenders that deliver banking as a service platforms to their business customers managed to generate between 200%–300% higher returns on assets compared with other banks. BaaS is a model that aims to ensure the execution of financial service—for instance, carrying out digital transactions, issuing loans, or opening bank accounts—delivered online via tech devices. The primary objective of BaaS is to complete a service in a timely and speedy fashion.

Top 10 Biggest US Banks by Assets in 2023

We employ smart security features that answer for full compliance and safety of your customers’ funds. But speed isn’t everything, we also ensured frictionless integration with other technology solutions using 10x SmartAdapters. Watch our on-demand webinar for additional insight into maximizing the power of open banking trends to drive your institution’s success. This blog sifts through the jargon and provides a general guide to understanding the benefits and key differentiators of each model. In today’s banking industry, there is no shortage of terms that banking professionals must know.

She is a former CFO for fast-growing tech companies and has Deloitte audit experience. Barbara has an MBA degree from The University of Texas and an active CPA license. When she’s not writing, Barbara likes to research public companies and play social games including Texas hold ‘em poker, bridge, and Mah Jongg. BBVA Open Platform is a BaaS platform serving the U.S. and global customers. Banking as a service is the provision of banking products to non-bank third parties through APIs.

Financial Wellness and Personal Resources

Consumers, in their turn, can deposit money with their cards or bank transfers. Take one established, medium-large global bank with between $300 billion and $400 billion in assets in Asia. We know for sure that all banks, at least to some extent, are becoming banking platforms. Open banking initiative forces banks to give up their monopoly and open their systems to third parties. 70 percent of the IT budget in European banks is aimed to keep bank operations running and only 30 percent to introduce new services or improve processes. It may look like a staggering amount of money but once you take into account historic circumstances and the complexity of banking software, it starts to make sense.

Railsbank, a London-based BaaS provider, serves the U.K., Europe, and the U.S. Railsbank developed proprietary infrastructure in-house that doesn’t run on top of legacy software stacks, unlike its competitors. Railsbank offers a variety of BaaS products and makes faster payments by directly connecting to payment rails. The embedded BaaS financial services can be co-branded or implemented as white label banking (meaning it doesn’t show the bank’s branding). Services offered through BaaS providers are part of a regulated industry, resulting in a long list of compliance and regulatory requirements you must manage and maintain.

Westpac’s banking pedigree dates back to the early 1800s, yet its ambitions are squarely set on a digital future. Australia’s first bank has embarked on a journey to deliver a completely fresh approach for its customers, and those serving them. It wanted banking-as-a-service to explore new business models leveraging digital-native technologies, that would support its customer-centric approach. It wanted to challenge itself to different ways of working with new partners in and beyond financial services to reach new customers.

In terms of connectivity, BaaS solutions can easily integrate with third-party solutions via API to either add additional services, for example mobile banking or payments, or increase functionality of existing offerings. A number of countries have already begun introducing open banking regulations, indicating that the financial services industry is moving toward an era where shared data and infrastructure will become consumers’ new expectations. Businesses are able to integrate financial services technology into their existing products and services. The ever-increasing number of fintech companies and online banking platforms that use BaaS has been a game-changer in the banking industry.


Examples of brands using banking as a service include Uber money, Apple Card and many many other brands. Even the likes of Monzo, Chime and Revolut use banking as a service as a way to provide better, faster, and cheaper financial products, simply because they don’t have to build an entire infrastructure underneath it. Providing more flexible paymentsolutions, allowing fintech companies to increase sales by making their offerings more accessible. Utilising this strategy, the third parties, such as fintechs, digital banks, or other non-bank business’ can build their own products based on the foundations provided by the bank – integrated via APIs.

Banking as a Platform (BaaP)

They guarantee adherence to financial industry regulations and provide a solid financial framework. As a result, these institutions allow BaaS providers to access their infrastructure, i.e., license, server, and communication equipment. We’ve built a BaaS solution enabling digital ecosystems to embed financial services by leveraging Standard Chartered’s banking licenses and technology stack. BaaS is known as embedded finance when it is inserted into customer journeys as financial products.


Visa and Solarisbank also partnered with FINOM to launch an innovative business account in Italy that combines banking, e-invoicing, and finance management services on a single platform. Meanwhile, BaaS integrator AAZZUR extended its partnership with Railsr to increase its compliance-ready core banking products while becoming the front-end BaaS provider for Railsbank’s DACH clients. The BaaS model enables non-bank organizations to integrate financial services into their digital products. In the case of open banking, non-financial institutions only use bank data for their products.

And Hair Flair can easily spend that extra capital on their business card they have through The Brush. The card is tied to their financial account and can access all of their funds in one place. Funds are immediately available, so they can use their card as soon as clients pay for their services. They can use the card to pay for business supplies and expenses and, if the platform decides to do so, they can earn rewards as they spend (like getting money back on salon-related purchases or receiving a free month of The Brush).

Start building your own banking service

These mainstays allow us to provide access to financial networks as well as hold and move money securely. The plan was to use fully configurable microservices architecture to provide a cloud native core banking platform. This would enable the bank to leverage APIs, making it easier to navigate and harness customer trends, market conditions and regulatory requirements.


Based in the UK, Trustshare is a financial technology startup that provides escrow infrastructure as a service. Established in 2020, the organization lets customers easily integrate a white-label platform into marketplace apps. It is also possible to aggregate transactional data from multiple user accounts to provide consumers with a full picture of their finances. At the moment, open banking is among the top fintech software development trends. This opportunity comes as financial services incumbents struggle with low performance.

This way, you can focus on how your core business and embedded finance can work together, rather than building banking infrastructure from scratch, yourself. The initial rollout is set to focus on financial institutions in the Asia-Pacific region, with other areas to follow soon after. The business of banking is moving out of the exclusive realm of banks and into a comprehensive ecosystem to bring personalized, customer-centric offerings to market faster.

This can provide crucial insights into customer patterns and help fintech companies better personalize their financial products and offerings. Coming up with many benefits, banking as a service enables both financial and non-financial companies to cut down expenses, reduce time to market, and ensure a better customer experience. With BaaS solutions, it is possible to avoid the complex and time-consuming process of obtaining a banking license.

What is Banking as a Platform?

Your BaaS provider should significantly help handle compliance and regulation requirements on your behalf, minimizing the amount of internal resources you need to maintain them on your own. Non-licenced businesses today are connecting to banks’ systems to offer a wide range of digital banking features aggregated into their own products via an assortment of banking-as-a-service archetypes. Despite some challenges, however, BaaS still brings many benefits to the financial services sector and it’s the customer who is rightly the biggest beneficiary of these advancements. With BaaS, they have more choices and are able to enjoy the full experience of, for example, buying their own house, rather than simply getting a mortgage from a bank. Overall, the whole ecosystem benefits because there is more value creation that is happening via BaaS. Therefore, banking institutions and non-financial businesses should unite.

Where required, and if permitted by applicable regulations, we can tweak Standard Chartered products and services to avoid duplicating product value propositions that are already on the market. A Software as a Service is a licensing model which can be accessed on a web browser thanks to the use of APIs. This concept can be extended to many topics other than banking, such as CRMs or even calendars. In a sense, a BaaS model is a sub-type of SaaS applied to financial services.

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For more information on how BaaS operates, please read our dedicated blog post. By leveraging a BaaS provider, fintech companies can expedite their financial products and services into the marketplace promptly, at a fraction of the cost, and without a charter. Meanwhile, integrating with nonbanks enables financial institutions to capitalize on new revenue streams and expand their product offerings. Open banking enables better collaboration between banks and fintech service providers by connecting them with Application Programming Interface software. APIs provide a secure way for institutions to grant the right technology partners access to their data. By working with a partner, the institution can bring new products to market and offer their customers more innovative and valuable financial services.

The Main Difference between Open Banking and BaaS

Moving into the banking-as-a-service space helps traditional banks stay in the game by turning a looming threat into a booming opportunity. Operating as a net consumer of partner APIs and open banking, this business model allows the bank to quickly explore new, digital services with the help of third party partners. As a result, the bank is able to rapidly offer new services and/or explore new markets, whilst still owning the customer. Delivering products and services in a highly competitive landscape, businesses across a variety of sectors can gain a competitive advantage by integrating BaaS platforms. Thanks to BaaS, organizations can create new systems faster and digitize existing processes, which is especially important during disruptions such as the COVID-19 crisis.

The cloud native 10x Banking platform helped Westpac realise its vision of creating a brand new and customer-first business model. 10x and Westpac have a common goal around fundamentally transforming how the bank uses technology to improve customers’ financial well-being. As a licensed holder, a bank can lend its charter to a fintech provider for a fee. The fintech then communicates with the bank’s infrastructure—otherwise known as the BaaS Platform Provider—to use its financial solutions or capabilities. We hope we could shed some light into the potpourri of technical terminology and business models in the evolving banking and fintech world. The banking landscape is in continuous flux with new innovators constantly stepping on the scene.

How BaaS works for platforms

As customer demand grows, you may want to provide access to additional services, such as financial accounts. These various financial services are all related to dealing with money—accessing it, storing it, spending it, and moving it—so your systems need to be able to talk to each other and pass important customer information. Rather than scaling your embedded finance offerings using various point solutions, look for a single system that can support a variety of financial services as you expand. In North America, delivering a full suite of banking and payment abilities is what most companies are striving to achieve.

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