What is Banking as a Service (BaaS) — and How Does it Differ From SaaS

In the age of cloud computing, selling solutions that used to be hosted on-site as services that are now handled remotely has become the norm.

You may be familiar with SaaS, or software as a service, but what about another contemporary cloud-powered product known as banking as a service, or BaaS?

Well, if you’re new to this concept, let’s unpick what BaaS brings to the table, where it diverges from SaaS, and why you should pay attention to this influential niche.

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The basics of BaaS

In the simplest terms, BaaS allows existing operators in the finance sector to secure cutting-edge features for their in-house apps which they would otherwise have to develop themselves.

The idea is that through the use of white label payment solutions and APIs, the integration of everything from e-wallets to full-blown digital banking platforms is a breeze.

Examples of BaaS companies

There are a plethora of BaaS providers on the market today, each of which aims to deliver a range of benefits to clients which we’ll cover in a moment.

Bankable is a good example of this, as it is a BaaS company that provides the framework its customers need to expand the functionality of digital money management solutions. Scalability and flexibility are part and parcel of what it offers, and it has been a powerful disruptor in this space since joining the fray.

A deluge of other pioneers are present in this market right now, including the likes of Intergiro.3D, MangoPay, Contis and Efuce. This means that there is plenty of competition, so for those organizations that have a need for BaaS, the choice and cost-effectiveness is undeniable.

The benefits of BaaS

The main selling point of embracing BaaS rather than taking the in-house approach is that it makes improving or launching a banking app that much more affordable. And at a time when fintech firms are shaking up finance and toppling traditional brands, this makes a big difference.

Another advantage is that it means small companies can achieve compliance with security regulations with ease, rather than this being a major stumbling block.

As with any cloud product, scalability is part and parcel of BaaS. As the needs of the client increase along with demand, a cloud-powered banking infrastructure will be more than capable of coping with this, rather than imposing caps on how many customers can be served.

There’s also the outsourcing of the monitoring, maintaining and updating of the infrastructure and software which deserves mention. It allows banks of all sizes to stay agile and limit their exposure to unplanned downtime.

The differences between BaaS and SaaS

It should be apparent that BaaS is distinct from SaaS specifically because in the case of the former solution, the client is still responsible for developing aspects of the software themselves. Meanwhile, with SaaS, the entire app is made externally, and businesses simply pay to access it, without having control over it.

There’s also the slightly tricky issue of BaaS being confused with backend as a service, which is a category of cloud products that share the same acronym. While they both deal with software development, backend as a service is more about integrating with any type of web or mobile app, rather than focusing solely on banking-related functionality.


In summary, banking as a service is an exciting and innovative area of the broader cloud market and is already bringing about major changes to the ways that financial organizations design and launch digital solutions. As finance shifts away from old-school approaches, BaaS will become even more meaningful.

Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.