Every presenter at the Digital Banking Conference seemed to have a different definition of BaaS. What’s more, some of those differences weren’t exactly slight. What we were able to figure out is that the term BaaS encompasses two very different scenarios. In one, the financial institution is the provider of the service; in the other, it’s the consumer of the service.
In the “FI as provider” scenario, imagine a fintech that needs, among other things, a bank charter, BINs, Fed access, etc., in order to function. In this scenario, the FI can provide “banking as a service” to the fintech.
In the “FI as consumer” scenario, let’s suppose, for example, that your FI wants to launch a discreet digital brand without having to invest the time and money to start such a project from scratch. A fintech vendor can provide your FI with “banking as a service,” doing all the heavy listing while you provide little more than your charter.
So the question isn’t, what does BaaS mean? The question is, what does BaaS mean to you? It all depends on where you are and where you want to go.