explained: Not banking with a bank


Banking as a service (BaaS) is the provision of banking products and services through third-party distributors. Through integrating non-banking businesses with regulated financial infrastructure, BaaS offerings are enabling new, specialised propositions and bringing them to market faster. As customer dissatisfaction with existing offerings grows, BaaS offerings are rapidly gaining ground:

30% of customers are considering switching banks.

42% of customers have used a buy now, pay later service.

2x return on average assets for banks focused on BaaS offerings.

As opposed to traditional banks who owned the entire value chain, BaaS players are largely focusing on only one to two stages of the value chain. Today, successful BaaS players align to one of four configurations:

Providers provide their banking licence, products, operations and/or technology for use by aggregators, other banks and non-financial companies.

Providers-aggregators act like providers, but also couple their own capabilities with other vendors to compose a complete ‘out-of-the-box’ solution.

Distributors leverage end-customer relationships to offer unique financial services propositions.

Distributor-aggregators enhance the propositions they distribute by adding new products or technology from multiple providers.

From ‘Banking as a Service, Explained: What it is, Why it’s Important and How to Play’, Deloitte



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