FF Virtual Arena: The BaaS Barometer

Banking-as-a-Service has taken the world by storm. The global market is poised to grow to $12.2 billion by the end of 2031, and the industry has seen a wealth of startups that offer pure BaaS solutions to fintechs and incumbents, from solarisBank to the 11:FS Foundry. Many have tried to define what makes this cutting-edge service unique, and the answer lies in who it benefits. 

In this Virtual Arena, we welcome some of the experts who operate in the very heart of BaaS and discuss the role it plays in the modern banking world. Our guests include; Amit Dua, the President of SunTec Business Solutions, Aruna Bhalla, the Head of Partnerships & Open Banking at TSB Bank, and Paul Harrald, the Group CIO at Curve. Together, we look at the difficult questions around BaaS, from its competition with banks to its stickiness with banking customers. 

“It’s a business model, enabled by technology,” said Dua. “Why has it enabled hype? Well because the customers have gotten used to a frictionless and holistic customer experience, thanks to Amazon and Google. And they are increasingly expecting a similar experience delivered in any journey they take.”. 

The customer has become retail savvy, utilising payments in their everyday lives in an open and immediate manner – the autonomy they now have over their financials has consequently been extended to their preferences in banking. 

“67% of consumers now want a superapp to consolidate all their digital activities. That’s huge, that’s them recognising that they need access to an app that does everything,” explains Bhalla. “It is absolutely on the banks to make sure they are attracting the partners to work with them. TSB has spent the last couple of years setting up the foundations so partners can partner with us.” 

The advent of BaaS is not meant to scare banks of stakes in the services they provide. Through collaboration, the service can work as an advantage to incumbents as it can open up their distribution channels and connect their products directly to customers without the need to directly interact with them – it is a win-win situation.