BaaS, SaaS, DaaS, etc. are accelerating in popularity with increased usage in business and education articles. Which begs the question, what does the “as-a-service” part of those acronyms even mean in layman's terms and how can it help business owners?
The as-a-service business model shifts the relationship between buyers and suppliers from producing value and instead helping adopt and facilitate value creation in that relationship. It is meant to bring understanding to the value offering in more than “goods” provided, and offer the operational efficiencies that the term service brings forth.
With that in mind, where Singe Payables’ expertise lies is in the bubble of Banking-as-a-Service. Banking as a service refers to a type of digital banking solution that allows third parties companies, that are not as regulated and restricted as banks (more to come on that), to build and provide new financial products and services. These financial products and services are typically API driven with some examples being payment processing, account management, and lending. API is a part of banking vernacular standing for Application Programming Interfaces which allows softwares to communicate with secure access. The development of APIs is the driving force of innovation in the banking industry, allowing third parties to have quick access to the already existing KYC that banks have developed.
Why did Banking-as-a-Service Develop?
With the development of APIs as the backbone of Banking-as-a-Service, this allows fintechs to step into the revolution of combining banking and technology. Whereas traditional banking is slow moving and conservative mainly due to regulation and bureaucratic processes, fintechs are able to be nimble and innovative. The compliance and regulatory banking that holds traditional banks back from innovation is why tech companies in the financial space have really taken off. Every fintech company is paired with a traditional bank for their necessary financial infrastructure and regulatory compliance support, but these newer business models have the ability and potential to quickly respond to changing customer needs and preferences in a way that traditional banking never could.
Watch Shannon Shawgo interview subject matter expert Mike Pociask to better understand how BaaS works within the banking industry and financial technology space.
As Mike said above, BaaS developed as a way to stay competitive in a rapidly evolving financial services market and to meet the demands of customers. Baas allows banks to provide a wider range of financial services to reach a larger customer base through partnerships with fintech companies and other third-party providers. By offering BaaS, banks can also generate new revenue streams, reduce costs, and improve operational efficiencies. Additionally, offering BaaS helps banks stay relevant and innovative in the face of increased competition from fintech companies, traditional banks, and neobanks – and this is just the beginning.
What is the Future of BaaS?
Banking as a Service (BaaS) is set to revolutionize the financial industry in the coming decade as more companies recognize the benefits of offering banking services to their customers. The largest of tech companies are already offering these services such as ApplyPay. Meta, Microsoft, Amazon, and Apple are among some of the biggest players that are understanding how banking can integrate into their core offering. Banking and payment processing services is yet another layer to a company that can better enable customer relationships and create value in the products and services offered. BaaS will enable companies to provide a more comprehensive range of financial products and services to their customers, improving customer loyalty and retention. The technology behind BaaS will also enable companies to offer more personalized and customer banking services to their customers, creating a more seamless and convenient banking experience.
With the continued growth and development of digital banking, BaaS helps companies to differentiate themselves from their competitors and offer unique value propositions to their customers. In the coming decade, companies will either grow with technology and create more partnerships or fall behind in competition which will create an emergence of new players in the BaaS market. Overall, the future of BaaS is bright and we can expect to see continued innovation and growth in the years to come.
Revolutionizing your AP
Singe Payables is an example of a fintech llc providing Banking-as-a-Service to businesses and customers alike. Offering digital banking solutions via virtual payments enables companies to take advantage of technology in house to create more revenue, reduce cost, and enable operational efficiencies within the accounting department. Our user friendly interface allows for payments to be distributed to suppliers with a click of a button, all the while generating a percentage back in rebate for using the free service. More secure and efficient than paying with a check, Singe Payables ensures that stepping into digital banking is a breeze with our white glove treatment of clients. Suppliers like the change too as it will create efficiencies within their departments as well and create a better relationship with more feedback than before.
Take a step into technology with Singe Payables, where Business is Personal.
To learn more and receive a free assessment into how many of your suppliers are already accepting payments by virtual card, contact us today. We would love to help.
Comments