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How Marketplace Banking Came Into Being

Banking-as-a-Service (BaaS) is a digital transformation of the way a bank’s financial service is offered to the customers keeping in mind their expectations as a focus point and putting customer experience at the center stage. It is an end-to-end technological process that enables the customers to avail of a banking service digitally beyond the walls of a bank and beyond the bank’s business hours through an interface of their choice (mobile or web platforms) on-demand any time, anywhere.

To make this digital experience possible, banks had to enhance their capabilities by foraying into the Banking-as-a-Service ecosystem either by building the BaaS technology platform themselves (with a bouquet of agile and efficient APIs) or by collaborating with FinTech players that offer banking capabilities as consumable services in a sachetized form. For instance, one of the pioneers of the neobanking model, Simple, was powered by the BaaS platform of CBW Bank. In other words, CBW bank became a sort of an innovation playground for banks and FinTechs such as Simple in the banking industry. This was made possible when CBW Bank created a “banking marketplace” with the power of APIs and opened up this BaaS platform to other FinTech companies. Simply put, marketplace banking can be seen as an online retail store for FinTechs to quickly get banking capabilities from this store.

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