Green Dot And The Future Of Banking-As-A-Service

This same process using a backend as a service will be done with a few clicks and take no more than a few minutes. All right, your instance is up and running, and now you can start coding! That is only the first step of the process, and you will still need to install the web-server, database, framework, etc. The first layer is the foundation and contains the database servers.

  • Financial institutions who refuse to opt-in for a BaaS solution may end up missing out on the opportunity of a lifetime.
  • Established BaaS providers usually have an extensive library of APIs that cover every finance-related aspect their clients can imagine.
  • All of this is now feasible using simple APIs from a BaaS platform.
  • Like GDPR and HIPAA — data privacy and security regulations for the EU market and the US healthcare industry, respectively.
  • We’ve built social media apps, chatbots, and other software using this low-code technique.
  • The banking as a Service model has been revolutionary for the financial sector.
  • Traditional banks will need to adapt and implement fintech solutions.

The BaaS platforms run on robust and well-designed infrastructure. In most cases, that leads to better performance than deploying an application without professional support. On the other hand, a Backend as a Service will allow a much faster launch of the MVP. Supposing it takes four months, it means the end-user feedback cycle will start much earlier.

Frontend vs. Backend

Finally, there are companies that communicate directly with customers. We see six trends in the embedded-finance and banking-as-a-service arena. Understanding and monitoring these trends can help banks, and those who hope to work with on embedded finance, identify opportunities and guard against threats. Tech-savvy legacy banks can fend off the encroaching threat of fintechs by moving into the BaaS space to share their data and infrastructure. The only disadvantage is that the bank can’t control what data fintech companies get.

There are about 10,000 depository institutions in the United States, many of which are community banks. This has resulted in a very fragmented financial system, which has hampered innovation. It’s more difficult to create a simplified digital experience for all depositors when there are so many banks, each with its own old technology. Consumers are more comfortable with mobile banking than they have ever been, and investors are loaded with cash and eager to invest in fintech businesses. As a result, in order to assure client happiness, banks must adopt the BaaS model. Integrating with fintech companies and non-banks also allows businesses to gain access to cutting-edge technology to meet client demands.

BaaS Examples and Advantages

Green Dot announced a partnership with—and a $2.5 million investment in—Gig Wage, a payments platform that provides financial services to underbanked. In addition, Green Dot announced it will partner with Google on the Big Tech’s firm checking account launch in 2021. APIs and applications are key factors in facilitating these changes and need to be developed in a responsible way to provide long-term efficiency and scalability. Relevant has been doing this for over seven years, and our dedicated software development teams excel at it. Consider the option of outsourcing in Ukraine to get quality banking IT services. Banking as a Service describes a model where customers interact with the service provider’s solution integrated into a merchant’s product.

Banks can use a fintech’s digital platform to sell more products effectively. For instance, SoFi offers both career coaching and attractive interest rates on refinanced student loans. This is a great move to cement their place as a helpful financial provider.

Fintech players, in turn, will rely on banks for their resources and infrastructure. AI incorporation and industry-specific app creation are trends that will evolve with time. BaaS platforms are already integrating smarter AI-powered capabilities. It’s a matter of time before it is easily available across BaaS solutions. Traditional banking has the necessary capabilities, but FinTech has what the market requires.

Looking for experienced software engineers?

To know more, please download this template for Android mobile applications. Boilerplate code and repetitive tasks are not excellent ways to allocate developer time. For example, why reinvent the wheel and ask a developer to create a social-login integration? It makes no sense, and it’s much better to use a pre-built template for this purpose. A Backend as a Service will free up development resources on the backend and allow companies to invest more energy on the frontend side. A BaaS or mBaaS will reduce the DevOps team size, allow the organization to work with fewer developers, and focus on delivering exceptional user experiences to the end-users.

BaaS Examples and Advantages

“The Web as I envisaged it, we have not seen it yet.” Shawn is one such technophile since he built his first Commodore 64 with his father. Thereafter, he spiced up the tech space with a blend of quirkiness and illuminating blogs. Spends most of his time in his computer den criticising other technophiles’ opinions. Therefore, it is essential to consider the number of backups per period allowed in the BaaS service. Therefore, when considering a BaaS provider, it is necessary to check how flexible its scalability policy is. Based on the exercise just mentioned, backups can vary significantly in size.


This article explained twenty advantages of using a Backend as a Service. Its advantages include a faster development time, shorter time-to-market, lower development costs, etc. Corporations and enterprises will also benefit from using a Backend as a Service. They will launch digital products faster, create satellite systems with fewer resources, and run multiple software tests simultaneously. Relational database systems such as MySQL no longer necessarily have to be hosted in-house. With Database as a Service – or DBaaS for short – one or more databases are outsourced to the cloud, saving costs and capacity.

This may hamper your BaaS ambitions or reduce your choice of potential provider. For example, if server locations in the EU are an important criterion for you. The main advantage of the vendor solution is the simple configuration of the backend. In just a few clicks, you can create, for example, templates for tables. Backend as a Service can simplify and accelerate app development. But BaaS is not necessarily the right choice for all scenarios.

This pressure has only begun to rise as more and more technology businesses enter the banking sector. It allows fintech companies and individuals to sidestep banking licencing rules by interacting directly with a bank. Financial startups may get off the ground much faster without having to deal with a bank’s IT infrastructure. Payment transfer failures can be reduced with bank account verification.

BaaS Examples and Advantages

Ride-sharing and gaming are only two examples of BaaS-powered applications. It’ll only be a matter of time until BaaS gains major momentum among US fintechs. BaaS will continue to evolve in the long run to create apps that are increasingly versatile and robust. Bankable is a London-based firm that enables incumbent financial institutions, Fintechs, and other businesses to launch new payment solutions. A digital ledger manager, card payment programs, and e-wallets are among its BaaS offerings.

What the benefits of a BaaS?

As we know, “data is the new gold” — and can be invaluable to any business that wants to understand the spending habits of its customers. Firms that use Banking as a Service have a distinct advantage since they can gather all of their customers’ financial data from banks and other financial institutions in one place. That helps them see how customers manage their money, when they shop, spend, and save — giving them a leg up on competitors. There are a number of successful examples of this model, including Atom Bank in the UK, Penta bank in Germany, Simple in the US and others.

As BaaS is gaining momentum, new providers appear on the market along with platforms created by banks. While BaaS providers use a closed architecture, platforms are all about sharing APIs with customers. Remember the old days when you had to go to the bank, talk to an actual person to withdraw cash, and then use it to pay at a store? Today, most stores are online, banks are on our phones, and customers can access a variety of banking services without leaving home. Thanks to Banking as a Service , merchants can integrate features like payment processing and financing directly into the customer journey.

It helps the fintech players and businesses to bypass the banking licencing regulations by directly integrating with a bank. Financial startups can launch significantly faster without struggling with a bank’s IT legacy. Now, banks can use this newfound knowledge to create customized offers for their customers. After all, 80% of customers are more likely to respond to personalized offers. Moreover, they can pursue a more targeted approach to multi-channel marketing.

Banking as a service or BaaS allows non-banks to offer core financial services to their customers by integrating with banks via APIs. Non-banks (like fintech and even non-fintech businesses) build products on top of the traditional banking infrastructure. Furthermore, a lot of fintech players are targeting small businesses as their potential customers. They provide user-friendly online banking services and affordable loans to them. On the other hand, 70% of small and medium businesses do not meet their financial needs while interacting with traditional banks. BaaS enables competition in financial services by enabling non-banks to offer core banking services.

Our advice is to always discuss your backend architecture with your IT department or software partner. They should have the necessary experience to determine whether BaaS is the best option. A team of backend developers, on the other hand, will be able to implement each specific requirement with fastidious care. Not only that, they can fine-tune and optimize your software to a much higher degree than standardized BaaS tools will allow.

Like we mentioned earlier, acquiring a banking license entails enormous capital requirements. Moreover, the resources required to maintain legacy systems and comply with government regulations are not available to all. Another way non-bank and fintech players use the BaaS model is by helping customers automate finances and investing assets. They can help customers get a personalized investment with low-cost index funds. Moreover, they can automatically rebalance the portfolio that is consistent with the customer’s investment plan. Furthermore, they can match the investment needs of the customers.

Ready to plunge into the technicalities of traditional and mobile BaaS? There’s no other way to describe its architecture — for better or worse. So, the conclusion is that yes, every large, medium, or small company should have an external provider responsible for safeguarding their data efficiently and effectively. Every C-Level and IT partner should consider a BaaS solution, both for the legal implications and business continuity, as losing data can be very damaging. Still, it is much worse not to have the ability to recover in time before it is too late. This way, we can solve most of our customers’ technical problems on the first call.

BaaS Examples and Advantages

The features list includes a serverless architecture, business logic, authentication, notifications, component library, drag and drop interface, etc. Microsoft could not be out of this game and also has a backend as a service solution. The backend platform integrates with Xaramim (frontend cross-platform) and Azure. Alternatives to self-host Parse are the leading cloud providers like AWS, Azure, or Digital Ocean. The open-source framework is entirely free, and the only cost you will incur is hosting the framework.

Internet Banking

Developers fluent in the Go programming language are in great demand because of the breadth of experience and expertise they offer to project. Clients use their trusted banks but get access to advanced functions to manage their finances. Banks save money since they don’t invest in technological development. Startups benefit greatly from BaaS since they can save money on developing a financial system. Just like coin’s sides, BaaS have some advantages and disadvantages too.

BaaS: What are the benefits?

The main advantage of using CloudKit is the native SDK for iOS. Native applications run on the iPhone operating system and have complete access to the device and functionally. So, it will lead to the best performance possible, user experience, and design. CloudKit is primarily a data store with essential iCloud identification authentication support and an API in front of it. It has fewer features in comparison to other services listed here. Pricing increases pretty fast and costs $100 for every ten req/s.

Leave a Reply

Your email address will not be published. Required fields are marked *

WP Radio
WP Radio