Understanding banking as a service (BaaS) and its benefits

Platforms and marketplaces are reshaping the financial landscape for small and medium-sized businesses (SMBs). Today, they can provide their SMB users with financial services that only banks have traditionally offered, without becoming a bank themselves. This is all thanks to banking as a service (BaaS). 

BaaS lets platforms integrate financial services into their offerings. This integration is in high demand. In 2022 alone, 64% of SMBs wanted platforms to offer business accounts, cash advances, and issued cards to fill the gap left by banks. This is because banks tend to take a one-size-fits-all approach that’s not well suited for companies with smaller margins, leaving SMBs underserved. 

With BaaS, platforms can now cater to the dynamic needs of SMBs. And they’re better suited to do so. They can leverage the relationships they’ve already nurtured with their SMB users and their in-depth understanding of user challenges to deliver highly tailored and efficient solutions.