Understand the Advantages of Banking as a Service (BaaS)

Banking as a Service (BaaS) is already a reality in Brazil and this type of financial service is gaining new fans every day.

With constant technological advances, it is natural that the most varied areas of the economy take advantage of technology to improve their services. This is the case of the financial market and Banking as a Service (BaaS) is one of the modern solutions in the field.

As it is an innovation in the financial market, Banking as a Service (BaaS) has drawn attention because of the ease of use and the advantages it provides for those who use it.

However, Banking as a Service (BaaS) has unique features that differentiate it from other financial services available on the market. Therefore, the ideal is to understand this subject more clearly.

In today’s article, you will understand the advantages of Banking as a Service (BaaS) and realize how it can be of great use to your day to day. We hope you enjoy reading.

What is Banking as a Service (BaaS)?

Banking as a Service (BaaS), or Bank as a Service in free translation, is a technology that paves the way for any and all companies to be able to offer financial services to their customers without having to be a bank.

In this way, a business can freely make available to its customers some functions that are commonly associated with traditional and digital banks, in addition to financial institutions.

With the use of technology in its favor, Banking as a Service (BaaS) has gained notoriety in the digital service options that can be chosen by consumers who are looking for more practicality when it comes to finance.

Banking as a Service (BaaS) in practice

Even with the previous explanation, it is worth clarifying how Banking as a Service (BaaS) works in practice.

Have you ever seen any businesses offering credit or debit cards or even a digital account? That’s right, this is a good example of the breadth of Banking as a Service (BaaS).

Banking as a Service (BaaS) works through APIs (Application Programming Interface), which are shared systems where it is possible to exchange information.

Therefore, enterprises that wish to offer financial services connect with banks and financial institutions that already have these services and, as a result, customers benefit from this.

From the communication of the APIs between the company and the bank, for example, the business is now able to work with financial services and offer them to its customer base. 

Since banks and financial institutions can expand their services through Banking as a Service (BaaS) and companies interested in offering the same services have the chance to fulfill this desire, both parties undeniably win.

In addition, customers using these services will be directly linked to the company offering a card or account, without the bank being the main character in this equation.

You will enjoy reading this content too: Open Finance: What It Is and How It Works

The advantages of Banking as a Service (BaaS)

Like any financial service, Banking as a Service (BaaS) also has notable benefits for those who use it.

Now see some of the advantages that Banking as a Service (BaaS) has to offer. 

Less service costs

The company that relies on Banking as a Service (BaaS) realizes that the costs of carrying out financial services are lower.

This is due to the fact that the company has the option of choosing the financial services it wants to work with.

It is not necessary to hire all the services of a bank or financial institution, it is enough to have those considered as ideas according to the planning itself to meet the demands of customers.

This customization means that there is no waste of time and money in operations, allowing a balance in the company’s accounts.

Greater customer attraction

By offering simplified financial services through Banking as a Service (BaaS), the chances of attracting a large volume of customers are greater.

This is due to the fact that people look for less bureaucracy when it comes to banking and the like, since they are tired of taking so many steps to resolve simple issues of their finances.

If people know that a certain company shortens financial services procedures, it is clear that the attraction of potential customers will be considerably expressive.

When the company perfectly understands its audience, it can offer financial services that meet exactly what they are looking for in a smarter and more optimized way.

Ease of carrying out financial operations

Banking as a Service (BaaS) makes it extremely easy to carry out financial operations that are used on a daily basis.

The reason for this lies in the independence to perform the services, without the need for large market players, such as traditional banks and renowned financial institutions.

That said, all financial operations processes become more agile for both the company and its customers.

More satisfied customers

Taking advantage of the hook of the last topic, having satisfied customers is the goal of every business and for companies that rely on Banking as a Service (BaaS) it is no different.

With a good experience using the financial services offered, customers are happier and tend to become loyal to the company.

This detail brings more credibility and competitiveness to the company, which becomes closer to its customers and improves its image in the market.

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