So far in the digital payments landscape of India, there have been several fintech start-ups that are being used rigorously by the massive population of the country. Even in the conscious mind, people have stopped figuring out the differences between banking and non-banking applications.
And all of this has been made possible with the ideology of Banking as a Service (BaaS) adoption. BaaS is the concept where non-banking firms can offer crucial banking services to their users by integrating with the main financial institutions or banks through APIs.
In this way, the non-banks, such as the fintech companies, will be provided with the liberty to build applications or products on top of existing banking infrastructure. Not just fintech but even non-fintech companies can integrate BaaS models for their business.
Here’s everything about how BaaS is revamping the digital payments sector!
The Key Players Involved in Making the BaaS Model Successful
The execution and success of BaaS require the contribution of three major players in the sector, including the bank, the BaaS platform, and a fintech company.
Banks play a major role in providing the physical infrastructure layer to the BaaS providers! In this case, FidyPay is your BaaS provider, and we have exposure to all of the core banking systems. The banks are the IaaS service providers, and they rent out their services to the fintech or non-fintech companies.
The next player is the BaaS platform, and its role is to provide your business with software to build a safe portal for ensuring communication of data with/from the bank. It is known as the middleware layer.
Now, FidyPay is your one-stop BaaS platform for helping your fintech business get to collaborate with the bank facilities for you to be able to offer financial services to your end customers. We do it by plugging in with your business. We are licensed to operate as a banking service provider and will integrate those services into your platform through API. You can count on us as a back-end service provider who will be a host to your non-bank or fintech business.
And the final player is your business! Your fintech business will interact with the end users or customers. Your business will be integrated with our platform so that you can make the banking services available to your customers. We meet all the compliance regulations to ensure your business is legal and has all the rights to operate smoothly.
Factors that are Influencing the Utilisation of BaaS
Fintech is currently growing and enhancing the way people have access to financial solutions. Keeping aside the demand part, there are a few other factors that have been paving the way for Banking as a Service to be an integral inclusion, which include:
1. Boosting Innovation
All of the banks now intend to catch up with the growing pace of the fintech firms. Therefore, they readily partner with the BaaS service providers to connect with the fintech companies and innovate their financial solutions.
2. Easy Banking
Small & medium enterprises or startups are now searching for easy banking solutions. And there’s no better way to acquire that than joining hands with the fintech service partners. As the fintech service demands increase, so does the BaaS integration with the banks.
3. Mobile-First Approach
Digital transformation is at its peak today, and the mobile-first approach has taken over! Hence, everyone wants to access banking services or facilities through remote devices without heading out to the banks. As a result, it is a phenomenal boost to the BaaS integration.
Benefits for Fintech & Non-Fintech Businesses with Adoption of BaaS
Here are some of the benefits that the fintech businesses will experience upon collaborating with our BaaS solution:
1. Improved Cross-Selling Capabilities
BaaS intends to help you create new revenue sources upon establishing a successful link with the banking services. You can implement the cross-selling capabilities due to the integration of API. It means you can pair up the services and offers to encourage your end-users to invest more in your platform, which will help you earn a good profit.
2. Provide Debit and Credit Cards
Being a non-bank, when using the BaaS model, you will have the liberty to provide your customers with debit or credit cards. The customers will be able to manage the settings of their cards, right from the application portal, with all of the other information made available in an approachable manner.
3. Enhanced Customer Trust
The banks don’t just have a lot of resources to offer, but they also earn customers’ trust. When you integrate those business services into your fintech application, you will also be able to acquire that level of consumer trust. Hence, people will trust your services and give you a better chance of earning higher revenue.
4. Bypassing Strict Banking Regulations
The third-party solution providers and the non-banks will have restricted access to banking capabilities and customer information. And acquiring the licence from the banks is a very strenuous job! Therefore, we are here to help you integrate with the BaaS services, to help you bypass those regulations, gain accessibility to those banking services, and then provide them to your end customers.
What is Pushing Forward the BaaS Implementation for Fintech & Non-Fintech Businesses?
Here are the reasons why BaaS implementation for the Fintech & Non-Fintech companies is increasing at a rapid pace within the country:
1. Increased Demand Among the Customers
A lot of people today are inclined towards using modern-day technological solutions. Thus, integrated financial solutions are eventually gaining demand. Easy-to-access financial products are of utmost help for consumers to manage payments & accounts, apply for loans and others.
2. Growing Fintech Industry
The fintech industry is booming worldwide, and India is leading with it. Fintech companies are experiencing a high adoption rate, for which the banks are actively providing their BaaS solutions to the BaaS providers for facilitating the services through the fintech startups. The BaaS model is the only way for fintech businesses to debut in the Indian market. It is because buying the licence isn’t economical for the fintech startups!
3. High Banking Revenue
The banking revenue will decrease over time if they do not upgrade their service offerings by adopting technology solutions. The most feasible and trending way of saving revenue growth and earning better profitability is to partner with fintech companies. In this way, the banks can serve many customers and meet their financial needs through the mediator businesses.
FidyPay Brings to You the Stand-Out BaaS Solution for Your Business
FidyPay is on a mission to help promote the digital payments landscape in all ways possible. And as the fintech companies are contributing the most to this motive, we are readily offering Banking as a Service solution to all budding entrepreneurs who intend to be part of this sector.
We have the tools and expertise to help your business modernize with the right solutions. We will integrate the right API strategy to streamline your business operations and enhance your customers’ experience.
If you are a budding entrepreneur with an idea to offer financial services to your end customers, then BaaS is the only acceptable model for you to get started with. With the best BaaS services, FidyPay takes off the hassle of starting up the foundation of your business! We will deal with all of the integrations while you can focus on marketing your brand among the target audience. If the idea sounds convincing, connect with our team, and we will take this further!