This market has grown driven by the demand for more agile and modern financial services
Fintechs have increasingly distinguished themselves on the market. According to the Distrito Fintech report, Brazilian fintechs have already received $9.1 billion in investments. Among the many areas in which fintechs can operate, the so-called BaaS (Banking as a Service) is growing, which consists in offering banking solutions to other companies.
This market has grown driven by the demand for more agile and modern financial services. Fintechs offer innovative solutions that allow other companies to offer financial services to their customers more efficiently and without having to be a bank.
Basically, a BaaS provides a variety of APIs (Application Programming Interfaces). They have the task of linking a company to different financial services, allowing these companies, not necessarily financial, to offer accounts, means of payment in general, Pix, boleto, cards, credit, insurance, among other solutions.
How it works in practice
A practical example is a company that wants to make loans, so it connects, via an API, to a BaaS. This company does not need to be a bank, it simply connects its system to that of BaaS, which does all the processing, management and regulatory work, which would be the heavy lifting of the banking sector, while taking care of the credit rules and funding engine.
The main benefits of a BaaS are a faster “go-to-market” and the savings of not having to focus on building the infrastructure. It’s an opportunity for companies to expand their service offerings without financial and regulatory burdens.
A marketplace that already has a seller and user base can connect to a BaaS to offer financial solutions to get even closer to its sellers, increase its level of engagement and have more visibility into the needs of its sellers, starting to act on this way with a more complete vision, thus being able to offer a more attractive prepayment of credits, or by linking a better logistics offer, for example, all this because the market now has more visibility than its partner, the seller.
Evolution of new business models
The gain in scale for companies that bet on BaaS is undeniable, the construction of large ecosystems passes through finance and being connected to a scalable, secure and efficient BaaS is essential for the evolution of new business models.
It is important that companies in the sector are aware of the opportunities and challenges of the market, always trying to offer innovative and efficient solutions to their customers, such as solutions that maintain customer data privacy and facilitate the integration of banking systems with other systems corporate . .
Fernando Nunes is co-founder and CEO of fintechTransfer
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Source: Terra
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