He asserted that BaaS is a must to have among their “go forward plans,” especially for smaller, community banks that want to diversify into new revenue streams without having to invest the time and resources necessary to establish new front-end or digital onboarding activities. In contrast to creating individual contracts with commercial clients that already have active user bases, he asserted that BaaS is an excellent technique to draw additional customers and more deposits.
According to Nowicki, embedded finance offers a range of fresh financial services and solutions that businesses may utilise to monetize their enthusiastic users. This is referred to as the “side of the house” for enterprises.
But when businesses create and promote checking accounts or business accounts through non-traditional channels, in interactions with customers, and in back-office procedures, an increase is projected over time.
Businesses also gain advantages.
Benefits are especially useful for firms that rely on banks and assistance platforms like Treasury Prime because they don’t construct or have those accounts on their balance sheets.
However, he asserted that in order for BaaS and a new generation of financial services to reach their full potential, banks will need to change their mindsets beyond merely embracing APIs and become comfortable with the idea that an intermediary will be present when they connect with end customers.
Nowicki asserts that data links financial institutions and commercial enterprises and is transforming how businesses operate. He provided an example of how platforms for accounting software could develop into useful places to have checking and accounts “embedded” in the mix.
In light of this, Nowicki questioned why bank accounts couldn’t be accessed through the same UI ecosystem as opposed to navigating between sites or moving files. The tiny firm selling goods on Etsy is another example that can grow since its bank account, which is embedded on the internet, is well-positioned to record payments in a smooth continuation of eCommerce.
