Bank as a Service (BaaS) is a term describing a “middleware” system that improves banking processes and increases customer service. It’s components are many but the basic architecture consists of three layers- two layers sit north and south of it.
Layer 1: Existing banks provide traditional regulation and licensing as well as core IT infastructure (either at a data center or via a managed cloud/IaaS from the likes of AWS, Azure, Google, etc.)
Layer 2: Middleware services that optimize both the internal processes of the bank and it’s external client-side processes. These processes take advantage of efficiencies delivered via in-house IT and its’ external partners at Layer 3.
Layer 3: Are technology (i.e. Fintech) partners that dominate the software/SaaS market via intellectual property, support staff, and APIs that provide the bank access to technology that they do not own.
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