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March 28, 2023

The five questions every Commercial Team should ask when seeking a banking-as-a-service (BaaS) provider

Relationships can be tricky and takes a lot of work from both sides to maintain trust and respect. Even after a lengthy amount of time, a relationship can be destroyed in seconds if either side feels misled, or that promised expectations were not met.

Historically, in fintech, many providers worked together within the industry to disrupt traditional services, or worked closely with incumbent banks and bigger financial institutions to modernise their offering and internal processes. More recently, fintechs have started to look further afield (having done a lot of work to campaign and educate people who are not industry-experts), about the necessity of creating savvy financial solutions that support the day-to-day functioning of society, online services and much more.

These relationships between both sides whether it’s the commercial teams, sales teams or partnership teams, are sacrosanct. Once agreements have been made to collaborate or provide a service, you want to be able to live up to, and exceed expectations, all for a fair price. A lot of trust and leeway tends to been given on both sides.

On the one hand, the business trusts that the provider, despite a lot of complex technology being relatively new and not vigorously tested throughout the many unknowns in the world, will deliver quietly in the background, find solutions for issues and at the least keep up to the brand’s standards that the end-users already expect. On the other hand, the service provider trusts that they will be paid and given some grace if the unknowns do show itself.

In our recent blog, we outlined what banking-as-a-service (BaaS) is, the nuances between BaaS and embedded finance, plus the benefits it can bring to any offering no matter the industry.

Recent research on BaaS commissioned by Clearbank showed that 40% of fintechs saw services go down, 33% have lost customers, and 20% have faced intervention by the regulator due to BaaS issues.

It is not unusual for businesses to face these challenges, however it can become very costly when the issue is bigger than expected. Coupled with expectations from customers and additional work for the team, all in all, this can cause disruptive delays. Furthermore, it can shift relationships between teams from both sides.

There are ways to mitigate these types of challenges, and as with any relationship, it’s all about asking the right questions. These five questions below are ones that every commercial team should be asking when seeking a new banking-as-a-service provider:

1. How fast do you estimate we can go to market with your solution built into our offering?

This is an estimate for a reason. You never know what additional resources may be needed. Getting a clear timeline for the first few weeks and months of partnering-up can help you get a better idea of how long it will take to bring your enhanced offering to your end-users. It will ensure that both sides can be adequately prepared to launch within the agreed timeframe and add buffers if necessary. This will eliminate stress and ensure transparency throughout.

2. Can we see your documentation and share it with our technology team? 

Every business values their engineering team highly. Therefore, giving the people integrating the technology a chance to look over the BaaS’s documentation and ask questions from the start is not only a sign of internal goodwill, it’s just smart on a cultural and business level. The engineering team will be able to give better insight into what will work and ease of implementation.

3. What known ‘’unknowns’ have you thought about that might come up throughout the process?

Stuff happens – we all know this. When technology and people are involved, there is no doubt that delays may happen for any number of reasons. That’s why planning from the start for the ‘unknown’ is critical to maintaining trust and professionalism between both parties. 

This one goes hand-in-hand with the last two points. Understanding the challenges that may occur, and ensuring that everyone from the commercial team to the engineering team, all the way to the customer support team and marketing team has a clear understanding of the plan of action. This will give people the opportunity to ask questions from different point-of-views and gain clarity, making it a collaborative effort from both sides.

You may want to ask for a (paid) test trial of the offering to see how it looks and feels, plus to see how end-users interact with the final product. Getting user feedback sooner throughout the process will help you get extremely useful insights that can mitigate a lot of stress, time and money in the future once rolling out on a mass scale.

4. How hands-on can you be throughout the process of implementation?

At Manigo, we offer a full, hands-on approach service as part of our offering. It’s incredibly useful to outline the type of support you will receive from the start to finish, and lay out the tangible results expected with an estimated time added to each result to ensure transparency. This gives both sides an understanding of how much time might need to be carved out to ensure successful implementation.

5. What regulatory and compliance requirements do we need to consider and how can you support us?

This is a big one, and potentially the most important question considering its ties to external regulators.

As we mentioned before in our previous blog, there are differences between embedded finance and BaaS solutions. BaaS solutions tend to ensure that the services they provide are ring fenced by compliance and regulatory requirements whether through third-parties or by being regulated themselves. Embedded financial solutions will leave this part to the business implementing its technology.

Although a lengthy task, understanding the full scope of regulation needed for the final offering and in what jurisdictions (each country, even each state might have different requirements and can be tricky on an operational level) is a necessity to succeeding when implementing a BaaS platform. Not fully understanding what your BaaS partner can offer here can cause significant setbacks and increases the potential for hefty fines in the future. 

There are many questions that can be asked, and these are just a handful we believe are of highest importance when kicking off any technological partnership. If you feel uncertain or unclear when getting answers for any of these questions, do push for clarity. It is in the best interest of both parties to ensure minimal damage towards the relationship formed between teams and to reduce reputational harm.

About Manigo

Manigo, a leading banking-as-a-service platform, provides a 360-package for any business who wants to incorporate modern, digital banking products such as smart payments, FX and accounts capabilities into their offerings.

In a matter of weeks, anyone can use our comprehensive API suite, whitelabel solution or program management to build in-app offerings that will delight and retain customers, boost revenues and increase brand loyalty.

From backend card and payment processing, to middleware integrations and frontend applications, we continue to be the only global, digital banking enabler in the region that covers the entire value chain.

Focus on your strengths and leave your #DigitalBanking transformation to Manigo.

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