## Introduction

Banking as a service (BaaS) is an increasingly important component of financial technology (FinTech) companies. More and more customers using FinTech services such as digital lending, payments, and wealth management are seeking embedded finance experiences. By extending banking services to these customers through strategic partnerships with financial institutions (FIs) and BaaS providers, FinTechs can benefit alongside their partners.

Levvel’s [2022 Banking-as-a-Service Survey](https://www.levvel.io/resource-library/access/2022-banking-as-a-service-report "2022 Banking as a Service Report") polled over 200 executives from companies in the FinTech space to provide a snapshot of the [current state of BaaS](https://www.levvel.io/resource-library/the-state-of-baas-and-how-its-moving-forward "The State of BaaS and How It’s Moving Forward"). This blog will explore some of the top reasons executives should have BaaS on their radar.

## Staying Competitive with BaaS Services
Nearly all of the companies in Levvel’s survey, 96%, were considering, implementing, or already utilizing BaaS services. That’s because these cooperative ventures benefit all sides. For example, they offer FinTechs the opportunity to meet customer demands for seamless financial services without needing a banking license. At the same time, they give financial institutions the ability to diversify their revenue streams and increase customer loyalty.

![Figure-3](//images.ctfassets.net/zqj370hybozc/VdpoznU6KticHPUsnuZbW/14342d4702f8debdd3e677d43b3ed905/Figure-3.png)

While forging the relationships necessary to offer end-to-end financial services is a complex task, only 4% of the companies surveyed were not currently considering BaaS services. 

## Customer Demand for BaaS

BaaS platforms aren't just a growth opportunity for banks and FinTechs; they're becoming a necessity as customers expect more from their [digital banking](https://www.levvel.io/services/digital-banking "Digital Banking"), investing, and shopping experiences. When asked about the most important factor influencing their decision to offer BaaS, companies were most likely to point to the service's ability to attract new customers, meet customer demand, and retain current customers. 

![Figure-2](//images.ctfassets.net/zqj370hybozc/6pT1MoTQH6JMDSjsqxr2Vr/5fb1a8ee5bb92f8f85c2271f481da491/Figure-2.png)

## Providing a Seamless Customer Experience with BaaS
Offering a variety of banking services beyond mere sales transactions is one thing, but a company’s ability to embed them seamlessly within their existing ecosystem is a different challenge. Technological, legal, security, and compliance challenges [are all barriers](https://www.levvel.io/resource-library/implementation-barriers-to-baas-and-how-to-overcome-them "Implementation Barriers to BaaS and How to Overcome Them") to providing an ideal experience to end-users.

As a result, trust and transparency are integral to partnerships in which different parties are responsible for managing legal and regulatory guidelines, technological and cybersecurity services, and customer service interfaces. But before any of these challenges can be addressed, the parties must agree on a strategy to ensure the BaaS services are attractive enough to customers to produce adequate revenue.

## BaaS Strategies for Customer Retention and Revenue Production
Customers now expect comprehensive financial services from companies as diverse as banks, retailers, and investment firms. When asked about the services their organizations were offering with their [BaaS partners](https://www.levvel.io/resource-library/top-factors-to-consider-when-looking-for-a-baas-partner "Top Factors to Consider When Looking for a BaaS Partner"), 67% of executives responded that financial management was a priority. This tracks with the proliferation of apps that allow customers to oversee their finances, monitor spending, and make savings goals.

![Figure-4](//images.ctfassets.net/zqj370hybozc/6mLzaYGRbREbcqCn1u7qfj/b7996d9140637f459416b82d3f57ad37/Figure-4.png)

The second most popular BaaS service utilized by the companies Levvel polled was investment services (53%), which are increasingly offered alongside financial management services like income and savings tracking. In addition, 48% of respondents were offering deposit services, while 41% offered merchant services such as special financing options.

## The Future of BaaS Services
[BaaS services are still in the disruptive phase](https://www.levvel.io/resource-library/all-about-that-baas-the-rise-of-banking-as-a-service "All About That BaaS: The Rise of Banking as a Service") as banks, BaaS providers, and FinTechs search for the most lucrative ways to formulate successful partnerships. But one thing is clear—these services are here to stay since customer demand is among the top reasons driving the expansion of BaaS platforms. 

For more information on the current state of BaaS, read the complete [2022 Banking-as-a-Service Survey](https://www.levvel.io/resource-library/access/2022-banking-as-a-service-report "2022 Banking as a Service Report") by Levvel.


Top Reasons to Pursue BaaS Right Now

Levvel’s Banking as a Service (BaaS) report reveals the state of BaaS implementation among FinTechs and the value of selecting the right BaaS partner.  

Levvel's 2022 Banking-as-a-Service Report is here.

This blog explores some of the top reasons executives should have BaaS on their radar.

Top Reasons to Pursue BaaS Right Now

Levvel's 2022 Banking-as-a-Service Report is here.

Top Reasons to Pursue BaaS Right Now

Read the Blog