Carmela Gómez Castelao participates in the report “The State of Banking as a Service (BaaS)”

Traditional banks are making the commitment to BaaS models, open banking is driving digital financial services, regulatory bodies are increasing scrutiny when it comes to BaaS providers, the banking ecosystem is rapidly changing and increased competition and regulatory pressures are expected in the BaaS sector.

• The State of Banking-as-a-Service (BaaS) is a report prepared by WhiteSight and Toqio that explores BaaS, analyzing the rise of new tools, the emergence of neobanks or where the sector is headed.
• The report also serves as a starting point for understanding the business models, regulatory oversight, drivers of demand and competitive regulatory landscape in the BaaS sector, as well as warning about a number of market players that could slow down the sector due to its malpractice.
• The opinions of executives active in the United Kingdom and Europe (EU 27+1) include that of Carmela Gómez Castelao, Global Head of Open Banking at BBVA.

Keys to the report “The State of Banking-as-a-Service”

• Traditional banks are making a staunch commitment to BaaS models as an engine of growth and innovation, boasting extensive experience in the fields of regulatory compliance and infrastructure. These banks are very well positioned when it comes to the future of the BaaS environment.
• Open banking has boosted account and payment services through APIs, as well as unlocking a variety of financial services as BNPL (‘Buy Now Pay Later‘) digital financial services.
• Regulatory bodies are placing BaaS providers and potential risks to the financial system under the spotlight. The United Kingdom, Germany and Lithuania are worth mention for increasing regulatory scrutiny to prevent money laundering, tax fraud and financial instability.
• The banking ecosystem is changing rapidly following the emergence of BaaS, forcing financial service providers to work with fintech startups, traditional banks, regulators or digital platforms.
• In the near future: it is expected that increased competition, regulatory pressures and the need to provide a greater range of services will be key factors in consolidating the BaaS sector in the years to come.

BBVA’s position in relation to BaaS

Traditional banks have approached BaaS in a variety of ways: serving as subsidiary platforms and laboratories for innovation, merger or acquisition of BaaS startups or acting as partners are just a few of the formulas. To this end, Carmela Gómez Castelao, Global Head of Open Banking at BBVA, pointed out that traditional banks can continue to operate as a “front” for the end customer due, in part, to the confidence that end users of the service already have in them, but also because of their infrastructure.

“There are many references to BaaS as what we understand as integrated finance,” she explained in the report, “where the regulated entity joins forces with the business or fintech to deliver the financial product as partners.” This way of operating offers benefits both to the end customer, who receives more reliable services; as well as traditional banking, which retains its customer portfolio; and new service providers, who find their niche.

BBVA is one of the banks that has adopted a BaaS strategy in Europe and America, with platforms including BBVA API_Market which sees the bank, companies that integrate APIs and service developers work hand in hand.

About Whitesight and Toqio, organizers of the report

WhiteSight is a fintech research firm that takes a design-oriented, and data-intensive approach.

Toqio is a platform as a service for creating and launching banking solutions.