Why Banking-as-a-Platform is the sensible way to scale embedded finance

So you're a bank or non-financial brand thinking about offering embedded finance products.

Would you rather:

1. Adopt a single provider model, with a fixed set of pre‑packaged, configurable products?

2. Connect to multi-vendor financial architecture from a single API?

The former inevitably means relying on your chosen provider's product lineup. If you require capabilities they can't or won't offer, you'll have to bolt on new partners and infrastructure to your stack.

The latter, on the other hand, creates a digital ecosystem marketplace that enables you to combine different products from best-of-breed vendors behind a single API.

This is the power of BaaP. Or banking-as-a-platform.

Whether you're a bank looking to modernize or achieve scalable enterprise banking, or a non-financial brand that wants to broaden its offering while keeping its options open, BaaP offers a faster, more flexible, and less operationally complex pathway.

How BaaP works (and how it differs from BaaS)

The key difference between BaaP and BaaS, or banking-as-a-service, is the breadth of access.

BaaS is like having access to a single shelf in a store. Or, if the BaaS provider's offering is particularly comprehensive, to a number of the store's aisles.

Typically, this means a banking license, compliance and other back-office services, and core financial products like cards, accounts, and loans. BaaS providers with wider offerings may also offer KYC and KYB, and other advanced capabilities.

BaaP, on the one hand, is like having access to the whole store and the store's network of suppliers, through a single curated platform: licenses, compliance and back office, core banking products, advanced capabilities, and the technical infrastructure to connect additional partners.

In this sense, BaaP is the opposite of BaaS.

In a BaaS model, the provider rents out its infrastructure. And, depending on their needs, the customer pays for one or more APIs, either from a single provider or several.

In BaaP, on the other hand, the provider rents out its infrastructure and also integrates additional third-party services into its platform. In other words, what distinguishes BaaP from BaaS is an orchestration layer that manages the multiple APIs a customer with complex needs would otherwise have to handle internally.

Understanding BaaP models

Depending on their capabilities and risk appetite, banking-as-a-platform providers can either behave like the banking equivalent of an app store or as a closed marketplace.

In the former, vendors can plug into the BaaP provider's orchestration layer, but the BaaP provider sets the standards they must meet to be able to do so.

In the latter, partners are hand-picked and the platform is tightly controlled.

Either way, a BaaP provider typically follows one of these two models:

• Bank-led: Here, a bank productizes its license, back office, and core product lineup, and broadens its offering by partnering with specialist third-party vendors

• Platform-led: Here, a neutral platform or customer‑facing non-financial brand — for example a mobility provider, e-commerce platform or SaaS — creates a single integration layer for banks and specialist vendors

In both cases, the BaaP provider acts as the central hub that the customer interacts with, and manages the underlying partnerships and infrastructure on the back end.

The customer, on the other hand, owns the products and the user experience.

Why BaaP is a better play than BaaS for ambitious embedded finance providers

If your ultimate goal is scale, BaaP has three advantages over BaaS: speed, flexibility, and simplicity.

Access to multi-vendor architecture from a single API means you only have to build once.

When you want to launch a new product or support new capabilities, you tap into your BaaP provider's digital ecosystem marketplace through the API. There's no need to establish new partnerships and add or adapt your infrastructure.

BaaP's marketplace model also enables you to mix and match providers, safe in the knowledge that they're held to the same technical, operational, and quality standards.

And, best of all, there's no need to juggle several different vendors and APIs, which makes integration work, compliance, and vendor management much less laborious and time-consuming.

The BaaP model in action: From major implementation project to configuration issue

Imagine you're a neobroker that relies on a BaaS arrangement for core infrastructure and the back-end. You decide you want to diversify your asset classes, for example because you want to bolster your sustainability credentials with green investments in purpose-driven companies.

In a BaaS setup, your ability to do this depends on your BaaS provider's choice of product catalogue and custodian. And if the custodian is a legacy player that doesn't support certain asset classes, you'll either have to wait for the BaaS provider to catch up, or source a specialist.

Neither is a good choice.

The former comes with opportunity costs that you can't control. Your go-to-market time depends on your BaaS provider's product roadmap and feature and API rollout speed.

This can be particularly slow when traditional banks are involved, with some commentators estimating that enterprise core modernization projects can take three years or more.

The latter means introducing new APIs, contracts, and operational flows into your stack.

By contrast, in a BaaP setup, you can access multiple banks, brokers, custodians, tokenization providers, liquidity partners, and more, through a single integration.

As a result, adding a new asset class to your product lineup becomes mostly a configuration issue, not a fresh implementation project.

The BaaP model in action: Adding high-value capabilities to your ERP solution

The advantages of a BaaP setup apply equally to non-financial brands. Say you're an enterprise resource planning software (ERP) provider that offers native pay-in and payout capabilities. This improves cash-flow forecasting by enabling customers to reconcile transactions in real time from within your platform.

As ever more customers make use of this feature, you decide to leverage the transaction data to offer more personalized services, such as embedded invoice financing, which allows your customers to borrow working capital against outstanding invoices directly from your app.

Here again, whether you can do this in a BaaS setup depends on your provider's product catalogue and infrastructure.

But a BaaP setup means the integration you already have in place gives you access to a network of banks, lenders, and specialist service providers through which you can offer invoice-financing infrastructure without rethinking your stack or bolting on additional APIs.

BaaS can get you started. But only BaaP can help you scale at speed

It's not an exaggeration to say that the BaaS model revolutionized financial services.

Productizing licensing, compliance, and other back-office functions made it possible for firms to focus on innovation instead of getting bogged down in the complex, resource-intensive business of financial services.

But the trade-off is a dependence on BaaS providers' capabilities, risk appetite, and aspirations.

For some firms, these trade-offs are a feature, not a bug. But if you're a large multinational or a scaleup with big ambitions, it forces you into arrangements that add needless complexity and slow you down at the exact moment when you need to move faster.

From this perspective BaaP is a natural evolution. One in which, alongside licensing, compliance, and the other day-to-day complexities of operating in the financial services industry, your provider also absorbs the technical complexity of sourcing and integrating multiple partners.

And, when your next big idea is a simple case of configuring what you already have in place, instead of having to source and integrate new partners, your firm stops being just another financial services consumer and truly becomes part of the value chain.

At Solaris, we're building Europe's first AI-native banking-as-a-platform capable of executing large-scale, high-stakes integration projects.

We've already helped ADAC — Europe's largest car club — migrate 1.1 million credit cards to a digital-first, more feature-rich platform without any noticeable disruption.

And our API-based AI-native platform, which we're continuously enhancing, offers unprecedented flexibility and compliance-as-a-service at massive scale.