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Open banking, which encompasses open data and open APIs, is set to revolutionise not just the financial services industry, but the underlying technology which defines the way in which such services are delivered.

New regulation has effectively ended the closed loop systems through which banks offered financial products and in doing so, it has rendered those legacy IT infrastructures outdated. While lagging behind other industries, the financial services industry is now ripe for disruption in a way that will have implications for every brand.

What is Banking-as-a-platform?

Banking-as-a-platform (BaaP) describes the same as-a-service model we have seen disrupt other industries.

Just think of end-to-end platforms like Airbnb or Uber. Banking-as-a-platform will allow you to tap into an ecosystem of fintech service providers to build tailored embedded fintech products natively into your core platform.

And in doing so, endless opportunities are opening up, ushering in a new wave of innovation.

BaaP brings you closer to the customer

The benefits of BaaP go beyond what previous fintech offerings could deliver. Developers no longer need to concern themselves with regulatory compliance or lengthy projects. Instead, they can deploy highly tailored financial services while managing data and overseeing authentication natively within the platform.

Open financial services help to bring a company closer to the customer.

Let’s say your business issues cards or virtual cards to its customers. In doing so, you’ll encourage those customers to purchase your services at discounted rates.

The customer will have higher levels of interaction with your brand and you’ll be able to form much closer relationships by channelling relevant content at the right time. Because you’re cross-selling through a natively embedded as-a-service product, the overall customer acquisition cost will fall. And the data collected from your card issuing will give you actionable insights about your customers’ behaviour.

We’re already seeing many such examples from world-leading brands, such as Apple Card by Apple, Grab and Shopify.

BaaP brings companies closer to the customer

The banking-as-a-platform trend is made possible by the technological evolution of open APIs. These are the digital ports making communication between different companies possible.

What does open banking mean for the server-side architecture of the web?

Banking-as-a-platform allows any brand to natively embed financial services into the customer experience. By shifting from offering white label banking products to an API-first developer focus the control is now in the power of developers.

Together, brands can connect with one another through open APIs, which enables them to offer far more relevant customer experiences. And with an entire ecosystem comprising customisable microservices, developers can choose the specific financial capability they would like to offer to a particular customer profile or at a certain point in the customer journey.

Meanwhile, the platform itself manages data exchange and oversees authentication, as well as ensuring compliance.

Join the new wave of innovators using embedded finance

But trying to “pick and mix” the right combination of services can be time consuming and confusing. HUBUC can help your brand build the right banking capabilities as-a-service by choosing only the services that are necessary for your business.

Schedule a time to for an informal conversation with us to see how.

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