New Global BaaS Report by Brankas Gives Consumers A Glimpse Into The Future of Financial Services

Brankas today launched a whitepaper titled Banking-as-a-Service: Rearchitecting Financial Services Landscape. The whitepaper details the many ways Banking-as-a-Service (BaaS) is changing traditional banking models around the world, enabling customers and businesses to experience financial services in a decentralized way, known today as embedded finance.

Key BaaS trends highlighted include:

• Rapid Expansion of BaaS-Powered Products: Beyond payments, BaaS is enabling innovative products like high-yield deposit accounts, BNPL, merchant cash advance, expense cards, merchant financing for eCommerce and restaurant merchants, and digital wallets.
• BaaS as the Foundation for Embedded Finance: BaaS is empowering fintechs and embedded finance companies across various sectors, from lending and insurtech to telco and travel.
• Diversification of Revenue Streams: BaaS provides banks with new revenue streams through API fees, service charges, and co-branded product offerings with FinTech partners and non-traditional players.
• Better banking for SMBs: BaaS significantly benefits small and medium-sized businesses (SMBs) by integrating financial services directly into the business and operational platforms they use to run their enterprises. Banks can then more effectively serve SMBs.

Exploring the varying BaaS maturity of regions including North America, Europe, Africa, and the Middle East, Brankas points out the tech enablers and regulated banks in each region. In the Middle East, for instance, regulators like the Saudi Arabian Monetary Authority (SAMA), the Central Bank of the UAE (CBUAE), and Banking Regulation and Supervision Agency (BRSA) in Turkey are taking proactive steps to foster a robust BaaS ecosystem. Initiatives include granting permits to BNPL providers and mandating licenses for BNPL services, reflecting a commitment to supporting responsible innovation and consumer protection.

A notable example of BaaS in action is the partnership between Amazon and ICICI Bank in India. The co-branded credit cards offered through this partnership features no cashback cap on transactions, a fully digital video verification (KYC) process, and delivery of the physical card within 5-7 days. Altogether, these contributed to the card’s immense popularity, attracting over 1 million customers within 20 months of launch.

From retailers like Samsung offering credit cards and ride-sharing apps facilitating microloans for drivers to Shopify providing money management services for its merchants, embedded finance represents the visible portion of financial services as experienced by customers through non-banking platforms. It allows users to discover, evaluate, and consume financial services seamlessly integrated into their everyday digital experiences.

To download a copy of the whitepaper, please visit the download page here.