THE BANKING-AS-A-SERVICE REPORT: The major players and best practices behind the business model that’s reshaping incumbents’ DNA

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Banking-as-a-Service (BaaS) – when banks or fintechs offer up their own services for other companies to use, enabling third parties to provide banking services – is starting to explode as an offering as more providers get on board.  A flood of providers from all different backgrounds, including incumbent banks such as BBVA, fintechs like Synapse, and neobanks like Starling Bank, are now diving headfirst into BaaS, driven by incentives like fee revenue, the potential for data-sharing deals, and insights they can gain from working with clients that can improve their own offerings.

But despite the rush of major providers into the space, no single company is managing to dominate it. They all follow different strategies as they compete along several metrics like breadth and depth of services, reputation, speed to market, and scalabilit, striving to stand out to clients and drive new business.

In The Banking-as-a-Service Report, Insider Intelligence looks at five major BaaS providers, ranging from fintechs to 20-year-old legacy providers that we think represent a good cross-section of approaches to offering BaaS. The report gives an account of the most important aspects of these providers – including their histories, vital details, and the BaaS services they offer – and analyzes some key considerations that yield competitive advantages or disadvantages for these providers. We then briefly examine a noncomprehensive list of other providers that merit mentioning. The report also highlights some best practices that other providers should note to gain an advantage in winning over prospective clients.

The companies mentioned in this report are: 11:FS Foundry, Bancorp, Bankable, BankMobile, BBVA, Cambr, ClearBank, Cross River, Fidor Bank, Green Dot, Marqeta, Railsbank, SolarisBank, Starling, Synapse, Treezor

Here are some of the key takeaways from the report:

• Despite getting off to a slow start, BaaS is getting hot in the US and UK as providers of all different stripes leap into the fray, seeking new revenue, data-sharing opportunities, and a chance to gain insights that can inform their own offerings going forward.
• But no one provider is dominating the market and competition remains as stiff as ever as providers compete to establish an advantage in terms of breadth and depth of services, reputation, speed to market, and scalability.
• The vastly different approaches taken by the giants that offer BaaS reveal some best practices that providers should take note of to optimize their chances of success.

In full, the report:

• Describes what BaaS is, the metrics by which providers’ performances are measured, and the ways they can establish competitive advantages.
• Provides a competitive showcase analyzing five major BaaS providers in depth.
• Discusses selected other BaaS providers that are relevant in the space.
• Recommends some best practices for gaining an advantage in winning over prospective clients.

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