BaaS: Tomorrow's financial solutions, today



The world of financial services is changing – for the better. A multitude of virtual banking and payment options, cardless and accountless services, and now, Banking as a Service (BaaS) are making financial inclusion the norm instead of a privilege, says Anton Coertzen, CCO of leading fintech enablement partner Ukheshe.


BaaS is the latest technology making waves in the financial services world and Gartner predicts it will hit mainstream adoption within two years. BaaS is one of four technologies that Gartner says have the potential for high levels of transformation in the banking sector – the others being chatbots, public cloud for banking and social messaging payments apps.


A Deloitte report also says BaaS is becoming ubiquitous. “It’s reconfiguring the banking value chain, opening the door to disintermediation, and enabling new sources of growth,” it notes.


How does BaaS work?

BaaS came about because the ability to offer banking services such as cards and loans as a non-bank enterprise improves the customer experience and boosts revenue. However, offering banking services requires a banking licence that is difficult to obtain – it also requires significant capital and compliance with strict regulations.


BaaS allows licenced banks to integrate their services directly into the products of non-bank businesses. This means any business can offer its customers digital banking services such as mobile bank accounts, debit cards, loans, and payment services, without needing to acquire a banking licence. The non-financial business can also distribute these financial products under its own brand.


All of this happens through third-party distributors. These distributors build tech that allows digital banks, fintechs, and other third parties to connect directly with a bank’s systems via APIs.


In a nutshell, it enables embedded finance: banks integrate fintech or other FSP products into the banking journey (BaaS), while non-financial companies embed banking products into their own services (embedded finance).


The benefits of BaaS

BaaS is reconfiguring the banking value chain by enabling third-party distributors to offer banking products and services. It’s opening the door to disintermediation and enabling new sources of growth for all parties – whether the bank, the fintech enabler or the third party.


Ukheshe offers banks and other financial institutions a cloud-based API-first BaaS platform that can be white-labelled - essentially allowing the bank’s customers to offer embedded finance offerings to their own customers, under their own brand. Examples include wallet as a service, card as a service, KYC as a service, and more.


Here are just some of the benefits of Eclipse within BaaS:

For banks:

  • Increased sources of revenue: Banks BaaS with Eclipse offers increased sources of revenue for their customers. Not only are banks able to enhance their value proposition to their existing consumer and merchant base, but they could also pivot to be the bank of choice for other Fintechs and Telcos in the market.

  • Cost savings: Banks can leverage third-party technology and infrastructure. Eclipse provides a dedicated environment with a frontend that is specific to banking institutions’ specific needs.

  • Increased customer insights: more customers mean increased insight into customer preferences and experiences. Eclipse provides exactly that – BaaS that has the customer at the heart of every solution, with less hassle, all through a single platform.

For non-banks and fintechs:

  • Less red tape: BaaS allows fintechs and businesses to bypass banking licence regulation by integrating directly with a bank's system through banking APIs.

  • Increased customer trust: businesses can leverage consumers’ trust in banks to increase their customer base.

  • Higher competition: BaaS enables competition in financial services by enabling non-banks to offer core banking services. This means that more players can enter the market, innovation gets a push, customers get access to new products, and it leads to greater financial transparency.

The future

BaaS will become to fintech what Amazon Web Services is to data centres – a game changer; an absolute essential.


Through its multi-functional platform, Eclipse, Ukheshe has long been ahead of the fintech curve by offering both BaaS and embedded finance – even though it falls under the Software as a Service (SaaS) category.


Our strategy has always been to partner with banks, telcos and fintechs to shape their digital payment offering to their customers. It is core to our services to help shape their BaaS solution. We, in effect, enable the enablers and increase financial solutions to banking customers.