THE BANKING-AS-A-SERVICE REPORT: The major players and best practices behind the business model that's reshaping incumbents' DNA
This is a preview of the Business Insider Intelligence Banking-as-a-Service premium research report. Purchase this report here. Business Insider Intelligence offers even more banking coverage with our Banking Briefing. Subscribe today to receive industry-changing financial news and analysis to your inbox.
Banking-as-a-Service (BaaS) — when banks or fintechs offer up their own services for other companies to use, enabling third parties to provide banking services — is starting to explode as an offering as more providers get on board. A flood of providers from all different backgrounds, including incumbent banks such as BBVA, fintechs like Synapse, and neobanks like Starling Bank, are now diving headfirst into BaaS, driven by incentives like fee revenue, the potential for data-sharing deals, and insights they can gain from working with clients that can improve their own offerings. But despite the rush of major providers into the space, no single company is managing to dominate it. They all follow different strategies as they compete along several metrics like breadth and depth of services, reputation, speed to market, and scalabilit, striving to stand out to clients and drive new business. In The Banking-as-a-Service Report, Business Insider Intelligence looks at five major BaaS providers, ranging from fintechs to 20-year-old legacy providers that we think represent a good cross-section of approaches to offering BaaS. The report gives an account of the most important aspects of these providers — including their histories, vital details, and the BaaS services they offer — and analyzes some key considerations that yield competitive advantages or disadvantages for these providers. We then briefly examine a noncomprehensive list of other providers that merit mentioning. The report also highlights some best practices that other providers should note to gain an advantage in winning over prospective clients. The companies mentioned in this report are: 11:FS Foundry, Bancorp, Bankable, BankMobile, BBVA, Cambr, ClearBank, Cross River, Fidor Bank, Green Dot, Marqeta, Railsbank, SolarisBank, Starling, Synapse, Treezor Here are some of the key takeaways from the report:
Despite getting off to a slow start, BaaS is getting hot in the US and UK as providers of all different stripes leap into the fray, seeking new revenue, data-sharing opportunities, and a chance to gain insights that can inform their own offerings going forward. But no one provider is dominating the market and competition remains as stiff as ever as providers compete to establish an advantage in terms of breadth and depth of services, reputation, speed to market, and scalability. The vastly different approaches taken by the giants that offer BaaS reveal some best practices that providers should take note of to optimize their chances of success.
In full, the report:
Describes what BaaS is, the metrics by which providers' performances are measured, and the ways they can establish competitive advantages. Provides a competitive showcase analyzing five major BaaS providers in depth. Discusses selected other BaaS providers that are relevant in the space. Recommends some best practices for gaining an advantage in winning over prospective clients.
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Business Insider Intelligence analyzes the banking industry and provides in-depth analyst reports, proprietary forecasts, customizable charts, and more. >> Check if your company has BII Enterprise membership access to the full report Sign up for the Banking Briefing, Business Insider Intelligence's expert email newsletter tailored for today's (and tomorrow's) decision-makers in the financial services industry, delivered to your inbox 6x a week. >> Get Started Purchase & download the full report from our research store. >> Purchase & Download Now Join the conversation about this story »
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TRANSFORMING USER EXPERIENCE IN BANKING: Here are the strategies winning financial institutions are using to deliver a superior user experience
This is a preview of the Business Insider Intelligence Transforming User Experience In Banking research report....This is a preview of the Business Insider Intelligence Transforming User Experience In Banking research report. Purchase this report here. Business Insider Intelligence offers even more banking coverage with our Banking Briefing. Subscribe today to receive industry-changing banking news and analysis to your inbox. As digital channels become a more critical part of the overall banking journey, banks' design teams need to strategize on how best to create user experiences (UX) that resonate with their customers. A strong UX enables banks to deliver a simple, intuitive, and frictionless digital banking experience. A superior UX can also help banks improve customer satisfaction and bring in new customers. Offering a wide range of in-demand mobile banking features, for example, can satisfy existing customers and drive bank selection among new ones — but only if these features are designed and implemented well: JD Power found that customer satisfaction was negatively impacted across both online and mobile channels by the flood of complex and hard to understand features that are common in banking apps today, per an analysis from its 2019 customer satisfaction ratings. The risk of not delivering a solid UX strategy is high — slower-moving banks face the threat of fintechs and big tech firms that boast a great UX as their main competitive advantage. Fintechs' excellently designed apps are pleasing to the eye and simple to navigate. Meanwhile, leading cross-industry players like Amazon and Google have long raised the bar for digital experiences within their core services — and as they venture into finance, they join fintechs in threatening legacy FIs' established market positions. Large financial institutions (FIs) are already focusing on UX design as they reshape their organizations by enhancing their digital channels, and smaller ones can learn best practices from these early movers to inform their own UX strategies. In Transforming User Experience In Banking, Business Insider Intelligence looks at winning UX design strategies employed by leading banks to reveal how other FIs can best capture the UX opportunity. We conducted exclusive interviews with nine major FIs to examine their UX teams in detail, offer insight into their approach to designing UX, and illustrate winning strategies for delivering a superior UX. Their strategies highlight the need to create multidisciplinary teams that place customers' needs and desires at the center of design initiatives, as well as the importance of utilizing a UX design methodology to deliver successful propositions in a timely manner. The banks interviewed in the report are: Bank of America, BBVA USA, Capital One, DBS Bank, Goldman Sachs, HSBC, JP Morgan, Lloyds Banking Group, and U.S. Bank. Here are a few key takeaways from the report: FIs should put customers at the center of their design initiatives by involving them in all stages of the process to ensure maximum uptake of their UX initiatives. They should use an established UX design methodology — like Design Thinking or Double Diamond — to zero in on the best solutions to users' problems. FIs should create multidisciplinary design teams with a broad range of talent and expertise to develop meaningful experiences more efficiently. UX design teams should in turn collaborate with other teams and senior leaders to identify solutions that account for user demands, banks' business needs, and what is technologically feasible. Although the majority of customer interactions are happening digitally, FIs shouldn't neglect physical channels when designing UX, as the customer experience often still involves these channels. FIs need to find the right tools to measure the success of their UX initiatives to better link UX to business outcomes. In full, the report: Identifies the UX oppportunity and provides an overview of popular UX design methodologies that can by deployed by banks. Utilizes exclusive interviews with nine leading banks to show how different FIs structure UX teams, approach UX design processes, and measure UX to link it to business outcomes. Helps banks identify strengths and weaknesses in their own UX strategies by providing insights on winning strategies for designing a superior UX. Interested in getting the full report? Here's how to get access: Business Insider Intelligence analyzes the banks industry and provides in-depth analyst reports, proprietary forecasts, customizable charts, and more. >> Check if your company has BII Enterprise membership access to the full report Sign up for the Banking Briefing, Business Insider Intelligence's expert email newsletter tailored for today's (and tomorrow's) decision-makers in the financial services industry, delivered to your inbox 6x a week. >> Get Started Purchase & download the full report from our research store. >> Purchase & Download Now Join the conversation about this story »
This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research...This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here. In recent years, we've seen a ballooning of activity in fintech — an expansive term applied to technology-driven disruptions in financial services. And 2018 has been no different, with fintechs' staggering influence on the market evidenced by record funding levels for the industry — by Q3 2018, overall funding was already up 82% from 2017’s total figure, according to CB Insights. Additionally, this year marked a watershed moment for the industry, with the once clear distinction between fintechs and financial services proper now blurred significantly. Virtually every incumbent financial institution (FI) is now looking inward and engaging in an innovation drive, spurred on by competition from fintechs. As such, incumbents are now actively investing in, acquiring, and collaborating with their fintech rivals. In this report, Business Insider Intelligence details recent developments in fintech funding and regulation that are defining the environment these startups operate in. We also examine the business model changes being employed among different categories of fintechs as they strive to embed themselves further in mainstream finance and prove sustainability. Finally, we consider which elements of the fintech industry are rapidly rubbing off on incumbent financial services providers, and what the future of fintech will look like. The companies mentioned in this report are: Funding Circle, GreenSky, Transferwise, Ant Financial, Nubank, Cellulant, Oscar Health, Stripe, One97, UiPath, LianLian Pay, Wacai.com, Gusto, Toast, PingPong, Flywire, Deposit Solutions, Root, Robinhood, Atom, N26, Revolut, OneConnect, PolicyBazaar, WeCash, Zurich, OneDegree, Dinghy, Vouch Insurance, Laka, Cleo, Ernit, Monzo, Moneybox, Bud, Tandem, Starling, Varo Money, Square, ING, Chase, AmEx, Amazon, Monese, Betterment, Tiller Investments, West Hill Capital, Square, Ameritrade, JPMorgan, eToro, Lendy, OnDeck, Ripple, Quorom, Chain, Coinbase, Fidelity, Samsung Pay, Google Pay, Apple Pay, Bank of America, TransferGo, Klarna, Western Union, Veriff, Royal Bank of Scotland, Royal Bank of Canada, Facebook, ThreatMetrix, Relx, Entersekt, BNP Paribas, Deutsche Bank, Gemalto, Lloyd's of London, Kingdom Trust, Aviva, Symbility LINK, eTrade, Allianz, AXA, Broadridge, TD Bank, First Republic Bank, BBVA Compass, Capital One, Silicon Valley Bank, Credit Suisse, Ally, Goldman Sachs. Here are some of the key takeaways from the report: Fintech funding has already reached new highs globally in 2018, with overall funding hitting $32.6 billion at the end of Q3. Some new regions, including South America and Africa, are emerging on the fintech scene. We've seen considerable scaling in older corners of the fintech ecosystem, including among neobanks and alt lenders. Some fintechs, including a number of insurtechs, have dipped into new markets to escape heightened competition. Emergent areas like blockchain and distributed ledger technology (DLT), as well as digital identity, are gaining traction. Many incumbents are undertaking business transformations that aim to reimagine everything from products and services to front-end systems and back-end processes. In full, the report: Details the funding and regulatory landscape in the US, Europe, and Asia. Gives an overview into a number of fintech segments and how they've changed over the past year. Discusses how incumbents are reacting to fintechs in order to stay relevant in the changing financial services sector. Evaluates what the future of fintech will look like and what trends to look out for in the coming year. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to: This report and more than 250 other expertly researched reports Access to all future reports and daily newsletters Forecasts of new and emerging technologies in your industry And more! Learn More Purchase & download the full report from our research store SEE ALSO: How the largest US financial institutions rank on offering the mobile banking features customers value most Join the conversation about this story »
FINTECH AND FINANCIAL INCLUSION: How low-overhead direct banking models enable banks to profitably serve the US’ 33 million underbanked households
This is a preview of the Fintech and Financial Inclusion research report from Business Insider Intelligence....This is a preview of the Fintech and Financial Inclusion research report from Business Insider Intelligence. Purchase this report. 14-Day Risk Free Trial: Get full access to this and all Fintech industry research reports. Historically, the US banking industry has discussed financial inclusion solely in terms of corporate social responsibility (CSR). Offering services to the underserved — unbanked consumers who lack access to banking products, and underbanked consumers who make only limited use of mainstream financial services — has long been economically unviable. But two forces have flipped the conversation from CSR to a genuine business opportunity. First, digital tools from mobile banking to AI are driving down costs and allowing financial institutions (FIs) to offer previously untenable products, such as fee-free accounts or credit scoring based on unconventional data. Second, the US' financial landscape is more competitive than ever, as fintechs, incumbents, and even tech companies like Amazon vie for larger shares of the overall space. That's creating a compelling reason for banks to seek out fresh growth opportunities, and the financially underserved represent just that. And with close to 33 million US households either unbanked or underbanked, the opportunity for fast-moving banks is huge. In Fintech and Financial Inclusion, Business Insider Intelligence explores the business opportunity for incumbent banks looking to tap the growing opportunity presented by the financially underserved, highlights through case studies how innovative players are utilizing technology to capture share in this market, and outlines recommendations for how banks can enter the space as well. The companies mentioned in this report are: Amazon, BBVA, Chime, Citi Bank, Experian, FICO, LendingClub, Petal, and Synchrony. Here are some of the key takeaways from the report: Despite the US being one of the most developed financial ecosystems in the world, a quarter of households in the country make little or no use of mainstream banking products. Several barriers have stymied underserved consumers' adoption of mainstream banking products, both from the consumer and FI perspective. Innovation in digital banking channels has helped reduce some of these barriers to adoption, making financial products viable for consumers and FIs alike. Banks planning to target consumers that are financially underserved need to consider a number of factors, including product fit, financial literacy, and how they measure metrics for assessing of a financial inclusion effort. In full, the report: Details the key reasons why millions of US households are either unbanked or underbanked. Forecasts the market opportunity of serving this group. Explores how seven players have leveraged technology to tap into this lucrative market — Citi Bank, Chime, BBVA, LendingClub, Petal, Amazon, and Synchrony Financial. Provides actionable recommendations for how banks can successfully pursue a financial inclusion project. Interested in getting the full report? Here are three ways to access it: Purchase & download the full report from our research store. >> Purchase & Download Now Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now Current subscribers can read the report here. Join the conversation about this story »