Why the Future of Banking-as-a-Platform Depends on Non-banking Services

August 2023

Fintech & Payments

Daniel Bedford

Senior Research Analyst

Banking-as-a-Platform, or BaaP, is a business model that enables third-party partners to build products and services for bank customers; most commonly a technology company that can provide APIs while the bank manages data exchange, oversees authentication and ensures compliance.
 
As we discuss in our latest banking-as-a-platform research, these services predominantly focus on core banking services such as payments, wealth management, insurance, and cryptocurrencies.
 
However, there are a wealth of other services that BaaP can facilitate; services that can strengthen customer loyalty for traditional banks at a time when fintechs are seen as being at the cutting-edge of innovation.
 
Some notable examples found across digital banking platforms such as Monzo, Starling, Revolut, and Fidor, include:
 
Analytics and Data: Businesses and current account holders are both interested in data on their spending and earning and to gain insight on their habits.
 
Accounting Services: Accounting services can help small businesses and self-employed individuals track their revenue, tax and payroll.
 
Borrowing: Eligible users can access arranged overdrafts, business loans, credit cards, emergency loans.
Broadband and Mobile Deals: Monzo are reportedly considering adding broadband and mobile deals to their marketplace.
 
Crowd Finance: Starling are reportedly looking for P2P investing partners to add to their marketplace.
 
Cybersecurity and Risk Management: Business account holders can invest in reinforcing their cybersecurity to protect themselves and their data and scale this to their business.
 
HR Software: Banking marketplaces can provide access to HR software such as communication platforms like Slack and employee software such as Bamboo HR that can help employers manage their staff’s holidays and employee benefits.
 
Legal Advice: Legal guidance to business customers, such as unpicking legal jargon and assisting to create contracts, policies and documents needed for a successful business.
 
PFM (Personal Finance Management): Budgeting and saving tools, simple account spending analytics, long-term savings assistance.
 
Personal Wellness: Doctor’s appointments, sport and exercise classes.
 
Utilities and Energy Providers: Businesses can access the energy and utilities they need to successfully run their businesses. Monzo includes energy switching supported by OVO Energy and Octopus Energy.