Banking as a Service: Opportunities, Challenges and Risks of New Banking Business Models

This book provides a comprehensive look at banking-as-a-service (Baas), equipping readers with an understanding of the origins, evolution, future, and applications of BaaS and the key differences across global markets.

BaaS is a game changer in the financial services sector, radically transforming both how consumers experience financial products and the business models delivering them. Banking as a Service cuts through the hype to provide a measured overview of BaaS, helping readers to demystify a complex evolving field and understand its key opportunities, challenges, and risks. It provides a framework for understanding where BaaS came from, how BaaS changes the economics and business models of banking products and services, its impact on key stakeholders, and its key regulatory implications.

Banking as a Service explains how business and operating models work, exploring different models such as interchange, deposit gathering, loan origination-to-distribute, legacy, API-first, own licence, match-making, and bank service providers and offers a framework for thinking about whether or not they’re sustainable. It explores how BaaS operating and business models compare in different global territories and is supported by real-world examples and cases profiling organizations such as Blue Ridge Bank, Unit, Synapse, Goldman Sachs, Railsr, Starling, Solaris, Cacao Paycard, QNB, OnePipe, Airwallex, Nium, and Pomelo. It also explains the differences between BaaS, embedded finance, and open banking.

Jason Mikula is the publisher of Fintech Business Weekly, a newsletter going beyond the headlines to analyse the technology, regulatory and business model trends driving the rapidly evolving financial services ecosystem at the intersection of traditional banking, payments, fintech and crypto. He also advises, consults for and invests in early stage startups. Previously, he spent over a decade building and scaling consumer finance businesses, including at Enova, LendUp, and Goldman Sachs. He is based in Amsterdam, the Netherlands