The final session of EBAday 2023 covered the rise of Banking-as-a-service (BaaS). The PANEL looked at the benefits of BaaS and Payment-as-a-service (PaaS) for financial institutions and whether it will increase efficiency, or diversify revenue.
Patricia Hines, CTP, head of corporate banking and payments, Celent, acted as moderator for this session, alongside panellists Fabrice Denèle, payments partnerships, BPCE Digital & Payments; Fernando Lardies, general manager, PagoNxt Trade (a Santander company); Bruno Mellado, global cash management and global head of payments and receivables, BNP Paribas; and Justin Silsbury, lead product manager for Cash Management, Infosys Finacle.
Denèle first discussed what they have done in BaaS in the last year. He stated that PSD1 and PSD2 completely changed the banking landscape and took the monopoly of payments away from banks. In light of this, they invested in their capabilities and have leveraged that to package their own capabilities as an offer on the marketplace.
Looking to the future of BaaS, Lardies argued that the closer you get to retail and individuals, the quicker the changes happen. He argued that the big change has been in smaller value payments and retail, and companies are looking for partners for these payments. He stated that the further you go into the corporate world, the less you will see the evolving business models and the need for BaaS partners.
Mellado argued that the first level of BaaS is providing banking services and some of the “harder” parts of banking to smaller players who do not have the capability to do this themselves. The second level, he noted, was at the corporate level, where he argued that they will need to do in house banking setups. The third level is banks, who he argued will eventually need to make the decision over whether they are going to keep providing banking services themselves or seek an outside partner.
Silsbury argued that banks are now all feeling the need to move into this space and partner with these providers in order to provide the full range of solutions to their clients. He further argued that BaaS offers the opportunity to reach the unbanked people by working with non-banking institutions to reach people who might not be able to easily access a bank.