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How banking-as-a-service (BaaS) works

banking-as-a-service

If new fintech technologies attract you then read my article about BaaS platform to have better understanding how the system works with banks!

Before, traditional financial institutions (mainly banks) were the only option for clients to get any sort of financial services (transfers, loans, payments, etc.). Appearance of new FinTech companies with friendly apps and intuitive services for customers made any financial operations easy and faster thus starting a new era of innovation.

What are BaaS platforms?

BaaS or Banking as a Service is a concept which is destined to revolutionize the financial industry and relationships between clients and banks or other providers. It became a main component of open banking, in which banks provide more financial transparency options for account holders.

BaaS is an end-to-end process that allows fintechs and other third parties to connect with banks' systems. They connect with the help of API so they can build banking offerings on top of the providers' regulated infrastructure, as well as unlock the open banking opportunity reshaping the global financial services landscape. Actually due to API this revolution became possible.

How do APi work then?

APi are a set of commands, instructions, etc., which allow two software programs to communicate with each other. This simplifies the work of programmer developers, so as they don’t need to write code but can use predefined functions. So, if we integrate the API of a payment system into your online business, users can purchase products and easily pay for them through, for example, a charge to their bank account.

Bank services

How does banking-as-a-service work?

The BaaS process begins with a fintech or other third-party provider (TPP) 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.

Developing a BaaS solution also allows banks to establish relationships and partnerships with emerging fintechs — thereby keeping themselves ahead of the trends.

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. The number of companies offering financial services developed with API is going to increase more and more! Do you agree? If you have your question, please write it below, I would be glad to answer your questions or to introduce your project to my team at Astorts Group to be evaluated.

Alessandro Rocco Pietrocola is an entrepreneur and investor based in London and operating mainly in Europe, Asia and Oceania with main focus on UK, Baltic Countries, Russia, China, Hong Kong, Malaysia, Singapore, Middle East and New Zealand as area of interest! At the moment is the CEO of Astorts Group. He is an UK FCA (Financial Conduct Authority) Approved Person and is has great experience as director of regulated companies. He uses to dedicate part of his life to inspire others and help them achieve the most out of their life. Since he was 20, he had successfully founded and managed several companies operating in the field of management consulting, wealth management and fintech. He loves travelling, he is a cigars lover, an amateur golfer and a dapper man.

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