Banking-as-a-Service

About the event

This business model allows financial institutions to use third-party technology services and infrastructure to expand their product range and respond more flexibly to changing customer needs. On the other hand, it opens up business opportunities in the financial services market to non–regulated service providers. The European and national supervisors play an important role by framing, i.e. regulating and monitoring these developments. Even lawmakers make their contribution.

We are pleased to highlight the growing significance of Banking-as-a-Service as a still wild business model in the financial industry, to provide information on the key issues of Banking-as-a-Service, to stimulate discussion on various aspects including economic, legal and regulatory issues, technological trends and opportunities for innovation, and to offer a platform for experts, market participants, academics and students to exchange ideas on various topics related to BaaS and expand their network.

Summary of the Deloitte-ILF Lecture on Banking-as-a-Service (BaaS)

Hosted by the Institute for Law and Finance (ILF) in collaboration with Deloitte Legal, the inaugural Deloitte-ILF Lecture focused on the burgeoning concept of Banking-as-a-Service (BaaS), a pivotal topic for both, FinTech startups and traditional banking establishments.

Key Highlights

Introduction and Academic Insights:

• Dr. Hendrik Haag, ILF Executive Board Member, and Dr. Mathias Hanten, Deloitte Legal Partner, commenced the evening with welcoming remarks.
• Prof. Dr. Dirk Zetzsche from the University of Luxembourg provided academic perspectives on BaaS, discussing its regulatory and legal dimensions.

Industry Perspectives:

• David Frei, Head of DACH & Eastern Europe at Swan SAS, shared insights into BaaS solutions for companies, focusing on "Unlocking Embedded Finance in Europe."
• Lennart Swoboda from Vereinigte Volksbank Raiffeisenbank eG explored collaboration modes within the BaaS framework from a traditional market player's standpoint.

Practical Experiences:

• Representatives from Deloitte Consulting, including Andreas Reuß (Partner) and Marie-Louise Bernhard (Manager, Banking Operations Transformation), shared Deloitte's hands-on experiences with BaaS. Their presentation encompassed market insights with a specific emphasis on the consulting spectrum and product development expertise, showcasing Deloitte's comprehensive offerings in this domain.

Research Insights:

• Sahar Gesell (Deloitte Consulting, Manager) introduced the ongoing Deloitte Consulting study "Beyond Banking", shedding light on future trends and transformations within the industry.

Panel Discussion and Networking:

• A panel comprising all speakers engaged in discussions and addressed audience queries, moderated by Dr. Hendrik Haag and Dr. Mathias Hanten.
• The event concluded with a networking session, allowing participants to delve deeper into the topics and foster connections among industry professionals, academics, and students. The panel discussed the appropriate supervisory approach to be applied when dealing with Banking as a Service. From the audience, it was suggested that the AML perspective had not been considered to a sufficient extent, while others argued that, at least in Germany, the lessons from the Wirecard case which allow regulators’ access to outsourcing providers were adequate.
   

Impressions

Key Takeaways

• BaaS is reshaping the financial landscape, offering seamless API integration for third-party providers into banking infrastructure.
• It enables traditional financial institutions to diversify product offerings and adapt to evolving customer demands while providing opportunities for non-regulated service providers.
• Regulatory bodies at both, European and national levels, play a crucial role in shaping and monitoring BaaS developments.
• The lecture aimed to underscore the growing importance of BaaS, foster dialogue on its multifaceted aspects, and provide a platform for knowledge exchange and networking among industry stakeholders.
• The changes for providers and risk positions resulting from BaaS require an urgent critical review of regulatory and legal frameworks, potentially necessitating their fundamental revision.

A sincere thank you extends to all organizers, speakers, and participants for their valuable contributions.

We invite you to stay informed about the transformative potential of Banking-as-a-Service in the financial ecosystem, as well as future events and eminent topics, with insights from Deloitte.

For any questions please contact Macide Sarican, Tel: +49 69 7191884 68.