Fintech as a Service (FaaS) has emerged as a new disruptor in the financial services industry. FaaS solutions provide companies with access to a broad range of financial services, platforms, and technologies. These services can be integrated into a company’s existing infrastructure, providing a fast and efficient way to expand their offerings and serve their customers better. In this article, we will explore some of the primary benefits of FaaS and its use cases with examples.
Benefits of FaaS
- Increased Flexibility: FaaS solutions can easily be integrated into a company’s existing infrastructure, allowing them to expand their service offerings quickly. Due to their modular nature, businesses can select which services they require, boosting customization and ensuring that businesses can create a unique customer experience.
- Time-Saving: Companies can save significant time and effort by integrating FaaS solutions into their existing systems. This integration is on-demand and nearly instantaneous, with deployment times that are a fraction of the time required to develop in-house solutions.
- Cost-Effective Solution: The majority of FaaS solutions are cost-effective compared to developing in-house infrastructure. By utilizing FaaS solutions, companies can gain access to cutting-edge services without investing significant amounts of capital into the development of similar services.
- Improved Customer Service: FaaS solutions allow businesses to provide more personalized, higher-quality, and low-friction customer service. Since fintech solutions take the burden of backend development, businesses can focus on customer acquisition, product development and the overall success of their brand.
Use cases for FaaS
- Payment and Transaction Services: Fintech as a Service can offer businesses various payment and transaction services. This could include online payments, money transfers, international payments, in-app payments and EMV implementation to mention a few. A great example of FaaS providers offering payment services is Stripe. Stripe allows any website or app to accept payments worldwide.
- WealthTech Services: Digital wealth management platforms have emerged as a popular option for companies to expand their business offerings. By integrating a wealthtech solution, businesses can provide financial planning, investment, and advisory services to clients. Some wealthtech providers including Betterment, Wealthfront, and Personal Capital offer unique portfolio management features that simply automate much of the traditional analytical tasks associated with personal investment portfolio management.
- KYC Compliance and Fraud Detection Services: Fintech as a Service can be used for KYC (Know Your Customer) compliance and fraud detection solutions. KYC regulations require that financial institutions verify the identity of their clients to prevent fraud and financial crime. By integrating FaaS solutions that specialize in KYC compliance and fraud detection services, businesses can verify and authenticate customer identities. A great example of such a platform would be Trulioo.
Examples of FaaS Providers
- Bankable: Bankable is a FaaS provider that delivers white-label payment and banking solutions to financial institutions, brands, and companies. Bankable allows businesses and fintech startups to access its core payments and banking infrastructure and quickly launch their customized payment solutions.
- Mambu: Mambu is a cloud-based core banking platform for lenders and fintechs. It offers various services such as loan origination, deposit services, and core banking functions, and its API-based approach allows users to customize solutions to fit their unique needs.
- Plaid: Plaid is a FaaS provider that allows companies to access financial data and streamline connectivity across various financial applications. Through Plaid’s API, fintech providers receive information such as account verification; account aggregation; and bank, identity, and income verification.
Fintech as a Service is a gamechanger and rapidly becoming the go-to option for companies that want to expand their financial services offerings quickly without investing any significant capital. FaaS solutions allow companies to focus on their customers and overall business goals. As fintech continues to grow as a leading industry within finance, FaaS will become increasingly important, providing companies with endless possibilities to grow and improve their service offerings.