Equinix, Inc., a digital infrastructure company, has launched a report: ‘The Future of Banking-as-a-Service ’. It includes in-depth analysis and findings on how industry attitudes towards BaaS have changed in response to the Covid-19 pandemic.
Business leaders have been talking about disruptive technology for many years, but few could have imagined the catalyst for disruption that 2020 had in store for them when the pandemic hit. As a result, the pandemic only accelerated the digital transformation journey, which was already underway within the sector.
As the digital economy continues to evolve, merchants, consumers and businesses are changing the way they interact. This has resulted in a rising demand for personalised experiences which offer an opportunity to leverage an ecosystem-based value chain that supports a frictionless user experience.
To take full advantage of this opportunity, increasing numbers of non-finance digital brands are embracing BaaS. At the same time, this allows banks to attract new customers and offer a greater range of services to existing clients. Thus, BaaS is increasingly seen as a way to complement banks’ core businesses.
Adrian Mountstephens, Senior Manager, Business Development for Banking & Payments, Equinix, said: “It’s clear that the global pandemic has brought into focus what businesses really need to do to go digital. As BaaS promises a fast and effective route to market for financial services products embedded in digital channels, we expect to see adoption increase through 2021. However, there are significant macroeconomic headwinds across the globe, making conditions challenging for everyone.”
Report insights include:
- 76% of businesses are more likely to use BaaS as a route to market since the pandemic hit.
- 91% of respondents view BaaS as a faster way to bring products to market.
- 80% of businesses now see BaaS as a way to extend their reach into new geographical markets.
Adam Cox, Co-founder and Director, Open Banking Expo, and joint author of the report: “Covid-19 has magnified the long-term digital shift that has become a permanent feature of everyday life, particularly as e-commerce has become more widely accepted by consumers. Until recently, brands would have partnered with banks to build an application for their customers, often a frustrating and laborious process. But BaaS—through the use of APIs and licensed banks’ secure and regulated infrastructure has now removed much of the time and cost previously associated with the process and made it much easier for brands to embed services into their own offerings.”
To find out more or to read the report in full click here.