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Digital Themes

Banking-as-a-Platform

Banking-as-a-platform, BaaP, allows financial institutions to utilize the expertise and resources, including infrastructure and applications, of a platform provider. While retail banking often relies on physical locations to provide customer service, digital platforms enable bank customers to access their banking services from any internet-enabled device. Banking-as-a-platform takes away the pains of building and managing a digital infrastructure to support the desired banking services and allows firms to focus more on delivering a stellar banking experience. Platform providers will already have the servers and software needed to implement a digital transformation, so the financial institutions need only focus on figuring out which software to use and how best to integrate it into their institution.

A platform strategy improves traditional banking by allowing financial institutions to utilize only the products and services they need, when they need them. Banking-as-a-platform enables the financial services industry to choose any and all of the platform’s offerings that fit their needs, with the ability to scale and adapt as their needs change. By utilizing a platform business model, institutions can keep up to date with all that internet-based banking offers. Banking-as-a-platform is also versatile, as it enables data tracking across financial products, services, and applications to help financial institutions understand how their customers are interacting with their services. This allows institutions the insights necessary to focus their resources on which of the services offered that they most need.  

Digital banks are less subject to issues that affect physical banking, such as adverse weather or public health orders, which allows them to continue to run when physical banks might otherwise be closed. It is important that digital banks be able to quickly adapt to changes in the world that may require them to have expanded features or bandwidth when disaster strikes, and Banking-as-a-platform allows for these types of quick responses.

While there are many ways that Banking-as-a-platform can benefit a company, some of the most notable include:

  • Reduced development cost and time: Rather than having to plan and purchase expensive equipment and software, institutions can utilize the existing infrastructure that the platform provides.

  • Utilize existing API catalogs: Instead of researching what APIs need to be used for which applications, platforms can provide a catalogue of APIs and their relevant uses to ensure full use of Open Banking.

  • Customized solutions and services: Financial institutions can collect data from throughout the platform to discover areas of opportunity. This allows for identification of trends and the ability to quickly adapt as needed to optimize the customer experience.

  • Enhanced revenue sharing options: Banking-as-a-platform enables multiple ways to share data with third parties, allowing for new revenue streams and partnerships, including, but not limited to, other banking institutions or social media sites.

  • Enhanced cloud security: Trustworthy platform providers take extra precautions to ensure the security of the data on their servers. This often includes limited physical access, as well as digital firewalls and encryptions services.

 

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Digital banks are less subject to issues that affect physical banking, such as adverse weather or public health orders, which allows them to continue to run when physical banks might otherwise be closed. It is important that digital banks be able to quickly adapt to changes in the world that may require them to have expanded features or bandwidth when disaster strikes, and Banking-as-a-platform allows for these types of quick responses.

While there are many ways that Banking-as-a-platform can benefit a company, some of the most notable include:

  • Reduced development cost and time: Rather than having to plan and purchase expensive equipment and software, institutions can utilize the existing infrastructure that the platform provides.

  • Utilize existing API catalogs: Instead of researching what APIs need to be used for which applications, platforms can provide a catalogue of APIs and their relevant uses to ensure full use of Open Banking.

  • Customized solutions and services: Financial institutions can collect data from throughout the platform to discover areas of opportunity. This allows for identification of trends and the ability to quickly adapt as needed to optimize the customer experience.

  • Enhanced revenue sharing options: Banking-as-a-platform enables multiple ways to share data with third parties, allowing for new revenue streams and partnerships, including, but not limited to, other banking institutions or social media sites.

  • Enhanced cloud security: Trustworthy platform providers take extra precautions to ensure the security of the data on their servers. This often includes limited physical access, as well as digital firewalls and encryptions services.
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