SunTec's President, Amit Dua, discusses how banking-as-a-service (BaaS) presents an opportunity for the financial industry to expand and improve financial inclusion. Dua highlights that smartphones have given people access to instant communication, and the financial industry is beginning to understand this. By offering BaaS, banks can facilitate day-to-day living, helping families and businesses financially plan for everything from long-term goals to unexpected emergencies.
Dua notes that BaaS has the potential to offer savings accounts and insurance to the 1.2 billion people worldwide who currently do not have access to them. This would encourage financial inclusion, reducing extreme poverty and boosting shared prosperity, as well as achieving seven of the 17 Sustainable Development Goals. Despite some challenges, such as the risk of cyberattacks and security breaches, Dua believes that the benefits of BaaS outweigh the costs, with the customer being the biggest beneficiary of the advancements.
BaaS is growing globally, with many new providers emerging in the US due to the difficulty of obtaining banking licences, while the UK has granted the maximum number of licences globally in the last decade. In Asia, Dua notes that there are very interesting cases emerging, such as a gym chain in Indonesia, which, along with a bank, has become a BaaS provider.