Format: On-demand
The Banking as a Service (BaaS) business model, where licensed banks partner with technology companies to provide financial services, has provided new economic opportunities for banks, faster speed to market for tech companies and innovative new products and services for customers. The demand for digital financial technology products has increased dramatically since COVID, with one research report noting that 88% of US consumers have tried at least one fintech app. With the increase of internet access and smartphones globally, developing nations can access financial services via fintech apps where they may not have had access to traditional banking systems. BaaS revenue alone is expected to rise from $1.7 billion in 2021 to over $17.3 billion in 2026. Rapid growth in BaaS has come with major growing pains including widespread regulatory enforcement actions, customer harm and the potential for increased regulatory requirements. Notably in 2024, a major BaaS technology platform failed causing harm to over 100,000 consumers with $265 million in deposits unavailable for months. It is essential that internal audit, risk and compliance professionals understand the rapidly developing BaaS business model, regulatory perspective and appropriate risk management to keep their organizations and communities safe.
Learning Objective(s):
- Understand the Banking as a Service business model and key terminology related to BaaS, embedded finance, fintech, neobanks, APIs, etc
- Review top risks associated with BaaS and key learnings from regulatory enforcement
- Obtain a comprehensive understanding of appropriate BaaS risk management to be considered by internal audit, risk and compliance professionals