Is BaaS dead or simply at risk?

Is BaaS sector dead or at risk ? Here is a good article in Forbes with a focus on struggling fintech.

Neobanks of course are spotted and this is not new check what I posted on it last year. Business built on interchange fee only is not a business, and launching a vanilla plain offer because you're using a vanilla plain stack (from BaaS providers - I'll elaborate right below) is not going to fly down the road.

There was a gold rush of Baas providers launching looking to serve mostly neobanks with more or less the same offer and services when these neobanks needed more products and features that are now available to Tier 1 Banks.

Some BaaS providers new initiatives were to create a marketplace by adding bank sponsors and launching white label UIs, but does it fly really?

Let's consider the angle creating a marketplace with 10-20 bank sponsors. Great, but what's next ? How many Fintech are you going to finally sign and deploy per bank sponsor ? Do you know than around 30% of Bank Sponsors have only 1 Fintech as a client (see here). And how many fintech neobanks can be profitable (see my post a year ago)? How many fintech are active in the US by end of 2022? 493... see here for more information.

You're offering a white label UI. Great again ! But is it just a website offering or do you have the capability with your white label UI to offer more than onboarding, card control, transaction history and moving money ? Fintech need more than that -or maybe not if they consider a basic MVP...

What's the reality and where the market is ?

?? To power Community Banks & Credit Unions that need to pursue an Embedded Fintech strategy (not a BaaS strategy)

?? To bring most innovative features to the market

??To be able to have a real customizable UI

?? To be able to provide most advanced turnkey solutions

?? But more important to have built a platform with a microservices architecture that only allows to build the products and features without being tied to any legacy stack.

Agora (Financial Technologies formerly Agora Services) is the only baas / embedded fintech player that brings all together:

?? a modular banking platform to Banks & Credit Unions to build on top of their core and be able to compete with largest Neobanks and Tier 1 Banks. How ? Check our white paper here Deliver Innovation without touching the core).

?? Most advanced fintech features like sub account / shared account (some baas are claiming to offer it... check what is behind the flyer), split payment between users, bulk payment, donation/charity, green / carbon free offer, money pool, dispute transaction in app, credit builder, bnpl post transaction, embedded AML engine, and much more...

?? fully customized APPs, you can put your brand / logo or even have it fully customized including building the niche products / feature you want. You want to see what advanced feature you should have in any white label UI? Check here

?? Have access to turnkey solutions. Agora is the only provider that has built turnkey solutions that can be deployed to any bank / credit union without core integration or already integrated with your core to provide the next gen open banking solutions. Today teen / smb banking, tomorrow elderly and migrant digital banking solution.

Have you seen one "Baas" provider that has built a real white label solution that can be multi-tenants and is offered by one of the big core ? Now you can say yes - Agora! We have our solutions available through legacy cores as Finastra (see here) and soon through another core. Agora's turnkey solution will be already pre-installed by Q3 2023 to over 1,300 Community Banks & Credit Unions.

You want to know what is the future of Fintech, contact us.

Arcady Lapiro

CEO & Founder Agora