What is BaaS? Understand the concept of Banking as a Service

Have you ever thought about adding financial services to your business without having to be a bank? This reality is possible thanks to BaaS - Banking as a Service. But how is that possible? Below, TOOLS Digital Services explains in detail what BaaS is, how this technology works, what the benefits are and the importance of this innovative model. Read on!

What is BaaS?

In literal translation, Baas, or Banking as a Services, means 'Bank as a service', a concept that allows any company, regardless of its industry, to offer financial products to its customers, such as digital accounts, credit cards, invoices and even transfers. The main objective is to facilitate access to new financial possibilities, thus making the customer experience even more complete.

How does Banking as a Service work?

You're probably wondering how companies manage to offer 'banking services' without actually being a bank, aren't you?

This technology works through an API, an acronym for Application Programming Interface, a type of interface that makes it easier for different systems to interact simultaneously in a secure and efficient way. In BaaS, the API allows a banking solution to be installed and used in a system other than the bank's, but without the need to go through a regulatory and bureaucratic system, for example.

But what about in practice? Imagine that an e-commerce offers its customers a credit card full of exclusive advantages, as well as a digital account that allows them to make numerous transactions. Sounds too good to be true, right? But this is already a reality in department stores and markets, for example.

What products can be offered within a BaaS platform?

Banking as a Service can offer a wide variety of products, as well as having the freedom to choose which ones and how the end user (you!) can use them. Here are some examples:

- Pix;
- Digital account;
- Physical and/or virtual card;
- Payment via boleto;
- Payment of bills;
- Cashback system;
- Cell phone credit recharge.

And what are the advantages?

BaaS uses technology to make life so much easier for consumers, bringing advantages such as:

- Flexibility to choose which service, among the range of possibilities on offer, best suits your reality;

- Security with your personal and financial data, since the services are developed within banking systems, one of the most protected today;

- Ease to access financial services and carry out transactions without having to physically go to a bank.

For companies, some of the benefits are:

- To attract a different audience, since it offers new services or more advantages, thus generating more revenue;

- Practicality to rely on end-to-end processes without worrying about bureaucracy;

- Experience centered on the user's needs, facilitating customer loyalty;

As you have seen, Banking as a Service opens up a range of possibilities for non-financial companies to increase their portfolio of services. Are you interested in this solution? Then you need to get to know TOOLS Digital Services' Financial Conveyors. Our tailor made service focuses on efficient financial services operations with a high degree of automation and information security.