Picture a world where banking services are brought to you by your favourite brands, tailored to your needs, with a seamless user experience, and with robust regulatory safeguards still intact. Every brand is now a potential fintech, and new ideas can be rapidly brought to market and tested to see if they fly. Instead of being restricted to the airless interior of a traditional bank, financial services are set free‍—‌and embedded into everyday life.

Buy a mobile phone for your child, and your phone provider can bundle it with a deal on their first savings account. Visit an online jewellers and get tailored micro-insurance at checkout with one click. Take that trip of a lifetime with a loan from your favourite airline, with a structured payment plan that works for you.

These are the promises that a world powered by Banking as a Service (BaaS) holds for consumers; a fundamental shift where the services they want are at their fingertips when and where they need them. And for companies that have not traditionally been in the business of financial services‍—‌from retail and travel to telecoms, health and ecommerce –  this shift is creating a whole new universe of customer and revenue opportunities.

What stands in the way?

The seamless experience of embedded finance is only possible with an equally seamless offering powering the back-end.

This is where Banking as a Service (BaaS) comes in. In many arenas‍—‌and particularly in the booming ecommerce space‍—‌the promises of embedded finance are already being realised as BaaS providers step in with technology to address pain points that banks can’t or won’t solve‍—‌or aren’t able to solve without a myriad of additional partners.

Until now, most of the big players in the BaaS space have been focused on providing one or at most two major banking services. This means that their customers have to take a “pick-and-mix” approach to BaaS, assembling the stack they need from several providers. This approach can have advantages, but runs into problems at scale and multiplies complexity and risk, especially since each BaaS provider is dependent on their own relationships with traditional banks. As it stands, there is no one-stop-shop for managing all the back-end needs for financial products. For example, if you want to launch a card product, that typically involves contracts and integrations with at least three different types of providers‍—‌the card issuer, the card processor and the manufacturer. Getting everything to work together takes time and effort.

The vast majority of BaaS providers are not banks. This means that no matter how slick their offering, their regulatory permissions are limited and they almost always have to rely on a traditional bank to provide core features like interest-bearing accounts, deposit insurance and lending. Ultimately, as long as BaaS providers are dependent on their banking relationships, they can never offer true full-stack BaaS to their customers. This is why banking innovation is currently at an impasse.

So why don’t more BaaS providers become banks? The simple answer is that it’s really hard to become a bank; applying for authorisation is expensive, time-consuming, and requires an extremely high level of in-house banking expertise. The process can take years, and success is not guaranteed. It’s a high-risk investment of capital, resources, and time. For many providers in the market‍—‌whose business models usually focus on doing one thing really well‍—‌it’s simply not worth it. And for banks, their legacy tech infrastructures, hierarchical structure and talent simply aren’t set up to offer robust, agile products like APIs, making it difficult to serve this marketspace.

The future of banking: full-stack BaaS

In the past, if you wanted to launch a tech startup, you had to buy physical servers, rent space in a data centre, and spend a lot of time configuring them before you even got to the point where you could start writing code. AWS changed all that by enabling you to use Amazon's server infrastructure and skip almost immediately to the part where you’re building products.

In the same way, a fintech today needs to build out a compliance team, build or buy a ledger, and establish a partnership with a traditional bank (which can be a fraught process), and make sure all these pieces are talking to each other; all before they can get their product or service to market.

With a true full-stack BaaS provider, all these pieces are part of the core offering and available via a single platform - an OS for embedded finance. Customers can work with one partner to bring a wide range of products to market quickly and with far less up-front investment.

This full-stack BaaS approach is a huge technical and regulatory challenge. We know because that’s what we’re doing here at Griffin. We’ve assembled an executive team and board with decades of experience in banking and technology, and a team of talented engineers to build our BaaS platform. It’s taken us years to get to the point where our goals are in reach, and we never would have stuck with it if we didn’t truly believe that we’re  building the infrastructure needed to power a financial revolution.

The promises of embedded finance are already being realised in the fragmented BaaS ecosystem. But full-stack BaaS is the only way to unlock the full potential of this fast-growing market. The sector needs a bank built to serve innovative, fast-growth fintechs and corporates, so they can focus on building financial products and getting them to market fast. They need an OS for embedded finance that will give them access to the infrastructure they need, every step of the way from launch to mainstream success.

For businesses, it’s quick and easy integration with a bank that offers individual accounts for business customers, and all the products they might need‍—‌like payments, debit cards, an immutable ledger, compliance workflows, transaction monitoring and screening, credit, business banking‍—‌all under one digital roof.

This is what we’re building at Griffin. It’s not easy, but the future never is.