Regulation & Compliance
December 11, 2024
Disruption is a buzzword that is often bandied about in the media for one reason or another but rarely do we take time to consider what it actually means in the marketplace.
To watch that in action, we need only look as far as banking and how banking as a service, or BaaS, is changing the landscape of the once-staid financial industry forever.
And much of this is driven, in part, by the eCommerce revolution. The need for robust and secure solutions to transactions on the Internet gave rise to a slew of new service models that are completely dismantling the “old way” of doing things.
From the benefits of digital banking to offering new, customized solutions for businesses in the digital age, here are four key ways that BaaS is disrupting the traditional brick-and-mortar banking system forever:
Banking as a service is, by necessity, oriented around technology and using access to that platform in order to build out customized solutions for businesses and clients. This differs from the old model that often offered one-size-fits-all solutions.
The use of technology makes offering these types of bespoke solutions cost-effective and viable because they largely rely upon automated processes to drive forward an end result. They also make perfect sense for online businesses as they are incentivized to offer the best technology possible on the market. In other words, staying on the cutting edge isn’t an option for BaaS providers, just as it isn’t for online businesses in general.
BaaS often is seen hand-in-hand with digital banking solutions and online commerce. This can be anything from providing point-of-sale access as needed whether via mobile or other devices as well as offering businesses access to services as needed.
All of this is made possible by state-of-the-art security procedures and processes to protect all parties involved in a transaction. It also benefits both sides of a transaction in that it allows for an online business to conduct trade anywhere in the world without having to jump through the necessary regulatory hoops and hurdles that are often associated with doing so in the physical space.
The ability of businesses to pursue customized and unique financial solutions to their firm’s needs results in a world that is described as the financial equivalent of plug-and-play or, in other words, banking services and financial technology are on tap as needed and rapidly adaptable to changing conditions.
Probably the single greatest strength of BaaS in the realm of digital banking is that its solutions are scaleable on a level previously made difficult by cost considerations as well as lack of technological infrastructure.
In other words, banking solutions can grow, change, and adapt as the business’ needs fluctuate. This is particularly integral in the online world where a company’s fortunes can literally change overnight.
Actually, a recent report, “Banking as a Service: Reimagining Financial Services With Modular Banking,” noted this very phenomenon, saying: “The banks have a high cost of maintaining pace with regulation and despite spending billions, often do not build developer and brand-friendly APIs. It is this gap that the Banking as a Service providers fill.”
We consider that the future of Banking is already here. This is actually our core business since the very beginning of the launch of our services.
It will only be evolving and the scale with which we will be witnessing exponential growth in this context will only continue to grow. If you would like to learn or understand more about the points touched in this article do contact our team and will be glad to answer your specific questions.
There are numerous advantages of Monneo’s digital banking services that we have successfully deployed among our client’s business operations. The businesses of our clients shape one of the most product or services advanced industries and shape the trends of the global economy. Most often in a digital business landscape.
Contact us to learn more about how can help you with digital payment solutions or apply directly for your virtual IBAN on our website.
The Payments Association
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