Issue #12 - Unpacking Fintech Themes: Banking-as-a-Service

Here is an overview of the series:

1. Overview on Fintech themes

2. Open Banking

3. Banking-as-a-Service

4. Embedded Finance

5. Embedded Fintech

If you have thoughts or questions to share on this series, please leave a comment.

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Where it Fits

Banking-as-a-Service (i.e. banks delivering services via API) is an enabler for Embedded Finance (i.e. distribution of banking services by non-banks). It was catalyzed by Open Banking (i.e. banks sharing customer data via API) and is a driver of Embedded Fintech (i.e. integration of fintech offerings by banks).

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Why it Matters

• JP Morgan: Rise of Platforms Calls for a Different Kind of Bank

• 11:FS: Banking as a Service: reimagining financial services with modular banking

• McKinsey: Global Banking Annual Review

• The Finanser: Why banking will be free (Part 1)

• Gallup: What Matters Most to Banking Customers

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Use Cases

Image Source: World Banking Retail Report 2021

• a16z: The Partner Bank Boom

• CNBC: This is Goldman’s bet to break into a $32 billion industry serving the world’s biggest corporations

• EY: How traditional banks can build a vision for platform-based banking

• The Financial Brand: How BaaS Turns Traditional Banks Into Digital Deposit & Loan Machines

• Fintechtris: FinTech Platform’s Checklist for Bank Partners

• Transcard: What are the Hottest Applications for Banking-as-a-Service?

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Key Players

There’s too many players to cover in this article, so here’s some links to great lists.

• Tearsheet: Buyers Guide to Banking as a Service 2021

• Aperture: Banking-As-A-Service (BaaS): Navigating The Maze

• Finextra: Top Six Banking as a Service Providers to Lead the Next Banking Revolution

• MONEYgate: Banking as a Service – list of 172 BaaS companies

  

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Challenges

• Barack Ferrazzano: 10 Legal Considerations When Offering Banking-as-a-Service

• Fintech Futures: Banking’s long road to BaaS

• The Global Treasurer: Bank APIs show promise but standardisation issues prevent widespread adoption

• Tearsheet: Beyond Features: What makes or breaks your BaaS partnership

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Predictions

• a16z: Every Company Will Be a Fintech Company

• Capgemini: BaaS platform model is the way forward

• McKinsey: What the embedded-finance and banking-as-a-service trends mean for financial services

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Thanks for the inspiration: Anish Acharya, Nicolas Benady, James Bessenbach, Patrick Dickson, Dion Lisle, Bernard Lunn, Jim Marous, Dharmesh Mistry, William Morales, Chris Nichols, Ben Robinson, Frank Rotman, Rex Salisbury, Ron Shevlin, Chris Skinner, Israel Sotonwa, Angela Strange, Bill Streeter, Simon Taylor, Luc Teboul, Simon Torrence, Zac Townsend, Rajiv Yadlapalli