As life begins to return to some semblance of normality, more than a few digital conveniences that consumers have enjoyed throughout the pandemic have found a permanent place in their daily lives. These include mobile apps, online banking, and other digital platforms that consumers rely on. The technologies behind Banking as a Service (BaaS) enable seamless and connected banking experiences for consumers through sleek and professional platforms that can help financial institutions (FIs) and other organizations entering the banking sphere improve their data, personalize their customer experiences, and know what customers will need before they do.
In this edition of Digital First Banking Tracker®, PYMNTS examines the state of BaaS and its future. It also explains how new players can enter the field and offer new amenities to help both consumers and FIs.
Around the banking space as a service
Maintaining the status quo is no longer enough for traditional banks if they hope to remain competitive. Banks are integrating the same artificial intelligence and data-driven tools as neobanks and FinTechs to keep pace. A sudden explosion in the number of FinTechs and growth within the neo-banking industry has driven higher consumer expectations for rewarding and engaging banking experiences. Seventy-five percent of survey respondents said offering inexpensive, quick and easy-to-use products that are readily available is what drew them to these traditional banking competitors. Unrewarding relationships with traditional banks can drive customer enthusiasm for FinTechs. Forty-nine percent of respondents said their relationship with their current bank was unrewarding and 48% said they did not feel an emotional connection to their bank.
As banking and technology merge more than ever, the need to increase regulatory compliance spending is growing rapidly. The benefits of artificial intelligence (AI) and other technologies that enable personalization or prediction are invaluable, but their implementation requires all regulations to be met, which can be complicated by the fact that many vendors technologies behind the new money management tools may have no prior experience in banking. Spending on regulatory technologies has increased, with research predicting it will grow from $68 billion in 2022 to over $204 billion by 2026. The same study found that 26% of digital onboarding processes related banks will have adopted AI programs by 2026, a rate that currently stands at 8%.
To learn more about these and other stories, visit Tracker news and trends.
Remitly on alignment with partners and trust with underbanked populations
The challenge of moving to a new country as an immigrant is never easy, and unfortunately, accessing banking services is among the most difficult transitions for new residents of the United States. Dan Webber, Managing Director of Passbook by Remitly, seeks to ensure that this often underserved segment of the population has access to transparent and convenient international remittances while partnering with the best organizations possible to ensure transparency, privacy and compliance in the United States and the United States. abroad. Ensuring these customers are connected is never easy, but achieving this goal is absolutely vital for this organization.
To learn more, visit the report.
How Open Banking Developments Are Shaping the Future of BaaS
The technologies behind BaaS are incredibly valuable, as they facilitate smooth and seamless experiences and pave the way for new players to enter the market. Key to this movement has been open banking technologies, which have grown in popularity around the world in recent years as white-label financial services and BaaS technologies have taken hold. However, the field is still quite open and the potential benefits are clear: direct banks that invest in open banking platforms will now be rewarded with new revenue streams and partnerships with the most successful FinTechs.
The Digital-First Banking Tracker®produced in collaboration with NCRexamines how the ongoing digital shift is changing the way consumers bank and making banking as a service and related technologies more accessible than ever.