Banking as a Service is a model that empowers non-bank companies to integrate digital banking services into their products and services. Globally, Banking as a Service is at USD 356.26 Billion in 2020 and is projected to reach USD 2,299.26 Billion by 2028, growing at a CAGR of 26.33%. Before Banking as a Service, only licensed banks could offer services such as deposit accounts, loans, credit cards, and payment services to consumers and businesses. With Banking as a Service, companies can integrate directly with a bank that offers Banking as a Service, or with technology platforms that partner with banks and other providers.
Technology platforms that offer Banking as a Service provide customers with easy to deploy APIs so developers can directly integrate customizable financial services into their products and services. Companies pursue banking services integration with the goal of retaining customers, boosting engagement, and increasing revenue. Airlines can offer their frequent flyers mobile deposit accounts with branded debit or credit cards. Apps can embed payments services so end users don’t have to input their card numbers for every transaction.
Because the Banking as a Services platform acts as an intermediary between the company and the bank, they can support regulatory requirements like compliance and KYC.