Banking-as-a-Service: new opportunities, new horizons

Banking-as-a-Service was born relatively recently. But this technological service, in every sense of the word, can be seen as an answer to the challenges of our time. Today, Bilderlings Pay provides a detailed overview.

It’s no secret that in the digital age clients don’t want to put up with limited access to their assets subject to their bank’s business hours or proximity to a branch office. Therefore, more and more financial services are offered outside the physical boundaries of banks and their licenses. This was exactly what drove the rapid development of FinTech. The symbiosis between traditional financial institutions and FinTech start-ups was just a matter of time. Banking-as-a-Service (BaaS) has become a solution of exactly this type.

The payment ecosystem

To put it extremely simply, BaaS allows a licensed financial company to create an easier banking infrastructure. The platform itself unites banks and FinTech companies in something already called an ecosystem. It is likely that in the very near future this ecosystem will be built on the blockchain technologies that are increasingly gaining their rightful place in the world of finance.

What is the main advantage of the system? When scaling a business, each new market means more and more new links must be added to the chain of intermediaries. These are banks, regulators, and supervising and licensing institutions. The procedure for opening a traditional bank account when entering a new market, for example, can be quite complicated. The BааS model helps untangle the intricate knots of banks’ and related institutions’ dealings, which should be very topical for small online stores.

In the real-time mode

For businesses of all sizes, the first step of integrating into the BaaS ecosystem is the opening of an operating account with the widest possible functionality.

For example, with the Bilderlings portal, after completing a simple procedure – that is, registering and passing the KYC procedure (“Know Your Customer”) – customers are given the opportunity to make payments. This does not require a code card or any additional device, such as a code calculator (digipass). Authorization is done via SMS, Google Authenticator or email address. This, of course, makes the use of the service faster and more convenient.

At the same time, by the beginning of the third decade of the 21st century, a multilevel security system has developed on the internet, or at least within the sector of well-known and reputable resources. Therefore, modern methods of virtual identification have proven to be more reliable than the traditional ones.

Bilderlings’ operating account allows you to utilize a convenient internet bank and make payments to any IBAN accounts in euros, dollars and 32 other currencies. Within a month, the system will begin working in 24/7 mode and be available at weekends and by night. By the end of the current year, multicurrency accounts, a mobile version and a number of other services will be available to our customers. Among the latter, it’s worth mentioning the introduction of individual IBAN accounts for customers from the Eurozone.

Direct action solutions

With the help of BaaS platforms, enterprises have an opportunity to significantly accelerate and simplify the processes around launching and scaling their business. The platform has to be independent and should cover a number of countries important for your business, not just one local jurisdiction.

The nature of online commerce requires that it is constantly being scaled in the process of opening in new markets. It is often simply ineffective to set up and structure relationships anew with a new foreign bank.

For this reason, Bilderlings works with all of the EU states, as well as with Great Britain. Our solutions in the field of financial technologies are based on the open API (application programming interface) and are accessible to businesses on a direct basis, including small and medium-sized enterprises.

It’s much cheaper this way

Various solutions are available to help banks use applications or software offered by independent providers of FinTech services without needing to buy or develop their own technologies. There is the successful example of Amazon Marketplace, which makes a profit from leasing their BaaS infrastructure.

The following figures also speak in favor of working with BaaS: FinTech startups in Asia spend about one year on average, and up to 80% of their resources on launching their projects. On the other hand, new merchants launching their services in the US, for example, incorporating a BaaS platform, are able to allocate 80% of their resources to product development, customer engagement and customer services with only 20% spent on the launch itself.

Chris Skinner – one of the leaders and commentators at TOP5 FinTech, author of bestsellers “Digital Bank” and “Value Web”, and managing partner of BB Fund in London – is convinced that BaaS is the bank of the future, the most suited to global e-commerce.

Finally, BaaS is just very convenient; registration generally takes only 15 minutes with verification via services like Telegram. After registration, you can perform any legal transactions you’d like from your account.

“There is no logical reason why banking should not be delivered as an independent service,” – Skinner notes.

It is clear that BaaS today is driving a necessary evolutionary shift in the relationship between banks and clients. Thanks to the widespread introduction of digital and mobile options, we can be more focused on our main activity: our business.

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