KYB Explained — A Comprehensive Business Verification Guide

If the Indian economy has taught us one thing, it’s that Know Your Customer (KYC) alone isn’t enough to prevent financial scams. Illegal activities such as money laundering and terrorist financing are quite notorious in the banking and corporate sectors, which indicates a growing need to find a holistic way to prevent such activities.

Enter Anti-Money Laundering (AML) compliance, the answer to combating financial crimes. While KYC effectively verifies customers' identities and filters out bad players, a recent study showed that 70% of frauds have occurred even after completing KYC processes. This is where AML strengthens the KYC process and deters criminals even further. 

While both concepts are similar in objective, they have underlying differences. Let’s explore how KYC differs from AML and some of their best practices in fintech!

What is Know Your Customer (KYC)?

Know Your Customer refers to the mandatory process of verifying customers' identities. Organisations and financial institutions collect information about their customers in compliance with legal requirements for identity verification and risk assessment. As a critical component of anti-money laundering, KYC is primarily used to prevent financial crimes like fraud, identity theft, etc.

What is Anti-Money Laundering (AML)?

Anti-money laundering refers to the regulations and procedures organisations and financial institutions follow to detect and prevent financial crimes such as money laundering and terrorism. It involves performing extensive due diligence on customers, monitoring their transactions for suspicious activities, and reporting them if a crime is suspected. AML compliance is usually carried out to prevent illegal activities such as tax evasion, political corruption, money laundering, terrorist financing, etc. 

What is the Difference Between KYC and AML?

Know Your Customer and Anti-Money Laundering are legal requirements for businesses to protect against financial crimes. However, they differ in the following ways:

Where and When are KYC and AML Required?

To prevent financial crimes, KYC and AML are required in various industries and circumstances. Following both are mandatory for all regulated entities, some of which include:

• Financial institutions: Before onboarding new customers, assess risks and detect suspicious activity. 
• Payment service providers: KYC and AML are done before opening digital wallets or activating digital transactions.
• Cryptocurrency exchanges: Crypto and DeFi platforms implement KYC and AML before allowing users to trade or convert digital assets to prevent money laundering via cryptocurrencies.
• Gambling and casinos: They are done upon player registration, during large transactions, and withdrawal of funds. 
• Corporate entities: Large corporations and venture capital firms conduct KYC and AML checks during mergers, acquisitions, or major investments to ensure legitimacy and prevent illicit financial activities. 

What Does the AML Screening Process Look Like?

Organisations and financial institutions typically perform AML screening. They check potential customers against public lists to verify whether they are high-risk individuals or are involved with entities engaging in money laundering or terrorist financing. In other words, they analyse customer information and transactions to verify their legitimacy and identify suspicious behaviours. 

While conducting an AML screening process, you should be on the lookout for a few red flags like usual transactions, use of anonymous entities, unexplained wealth increase, large cash transactions, etc.

There are a few types of screening processes your business can conduct:

• Sanctions screening: These lists are maintained by government agencies and contain information about individuals or entities deemed national security threats. These are individuals who are prohibited from certain financial dealings.
• Politically Exposed Persons (PEP) Checks: Under this process, individuals who hold high-profile positions in government or politics may be more likely to engage in financial crimes such as bribery or corruption, making them high-risk individuals.
• Adverse media sources: These sources include negative news stories that may be associated with the customer being verified. This check ensures that the individual does not portray the company negatively. 
• Watchlist Screening: Companies check a customer’s information against specific databases containing data about known or suspected criminals. Watchlists are similar to sanction lists but are constantly updated and even employ real-time screening for adequate due diligence.

How does the KYC Process Work?

The KYC process can be carried out both offline and online. Regardless of the method, the following documents are essential:

• Identification proof: These documents verify your identity. Examples include an Aadhar card, passport, driver’s license, or voter ID card.
• Address proof: This is used to verify your current address. Utility bills, rental agreements, and even some ID proofs can be used to verify your address.
• Income proof: A few entities may require proof of income to assess your financial status. Such documents include salary slips, income tax returns, or bank statements.
• Photographs: One or two passport-size pictures are required as well.
• Additional documents: Depending on the entity you’re opening an account with, a few more documents, such as a PAN card or business registration documents, might be needed.
• Self-declaration form: In most cases, you’ll need to fill out and sign a self-declaration form confirming the accuracy of your KYC information, and they’ve been submitted in compliance with applicable laws. 

The KYC process is conducted in the following order:

1. Collection of information: The applicants first submit their personal information. After which, they are required to fill out an online KYC registration form.
2. Uploading of evidence: Once their information is collected, the applicants have to validate it with relevant documents. These serve as evidence to prove they are who they say they are. Neokred’s ProfileX takes this a step further with its secure verification feature that implements facial recognition technology to prevent identity frauds.
3. Verification: Once the forms and relevant documents have been uploaded, they undergo multiple checks to ensure they haven’t been tampered with. The verification process may take time, and the applicants will receive a notification from the entity if their application has been approved. 

What are the Main AML Regulations?

AML regulations in India are primarily governed by the Prevention of Money Laundering Act (PMLA), which mandates businesses and financial institutions to implement robust measures to detect and prevent financial crimes. 

Between 2014 and 2024, the Enforcement Directorate (ED) registered over 5,200 money laundering cases, with 40 convictions and three acquittals. This indicates the threat money laundering poses to the Indian economy, which has led to the necessity of regulatory bodies enforcing AML regulations. 

The Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), and Insurance Regulatory and Development Authority of India (IRDAI) are key regulators that have been integral towards the development of robust AML frameworks. More regulations anchored by the PLMA were implemented to address the rising number of financial crimes and safeguard the nation’s economic system:

1. PML (Maintenance of Records) Rules, 2005: Requires reporting entities to maintain transaction records and submit those deemed suspicious to the Financial Intelligence Unit - India (FIU-IND).
2. PML (Amendment) Act, 2009: Introduced the concept of “corresponding law enforcement agencies” where information about reporting entities could also be shared with foreign agencies.
3. PML (Amendment) Act, 2012: Introduced the concept of politically exposed persons, expanded the scope of reporting entities to NPOs and lowered the threshold for identifying beneficial owners.
4. PML (Amendment) Act, 2015: This was made to align Indian AML laws with international standards by introducing the concepts of “reporting financial institution” and “reporting authority.”
5. PML (Maintenance of Records) Amendment Rules, 2023: This amendment aimed to bolster AML compliance efforts by widening the scope for reporting entities and customer due diligence requirements. It imposed stricter KYC norms for company secretaries and chartered accountants, including cryptocurrency and virtual digital asset transactions under AML norms. 

How Automation Improves KYC/AML Compliance

Automation has the power to streamline KYC and AML in the following ways:

Online Identity Verification

Businesses can automate KYC procedures and obtain customer identity data through online verification. The process begins with the user selecting their ID document type and uploading pictures. Once the KYC platform screens the documents, users are asked to send a photo of themselves holding the document to verify that they are real people. Biometric checks and facial authentications are done under automated KYCs to verify customers' identities.

For example, ProfileX makes digital identity verification easier with its top-of-the-line KYC API. The platform verifies customer identities in seconds with unparalleled accuracy and validates their information with automated document cross-checking with trusted sources.

Automated AML and Sanctions Screening

Automating AML and sanctions screening is also highly effective in reducing businesses' manual burden of conducting the verification processes themselves. Through automation, companies can build verification flows in compliance with AML/KYC regulations, maximising reliability and protecting them from financial crimes. PEP lists, sanctions lists, watchlists, and adverse media lists are a few sources that automation can use to screen customers for possible risks. 

Transaction Monitoring and Digital Wallets

KYC/AML automation facilitates real-time monitoring of customer transactions and detection of illegal or suspicious activities. Since many users also create digital wallets for online payments, automation tools can verify their identities and continuously monitor their transactions. 

Consequences of Poor AML & KYC Compliance

Here’s a brief overview of some of the consequences companies and financial institutions can face due to poor AML and KYC compliance:

Facilitating Criminal Activities Unknowingly

Poor AML and KYC policies can cause financial institutions to unknowingly facilitate illegal activities such as money laundering and terrorist financing on behalf of criminals. This can expose the entity to risks, so robust identity verification and monitoring procedures are required.

Regulatory Fines and Penalties

Did you know that the number of penalties imposed by the RBI on financial institutions grew 88% over the last three years? What’s worse is that AML and KYC non-compliances contributed to that growth. Regulatory bodies impose strict guidelines that companies must follow to maintain AML and KYC compliance. Failure to adhere to these guidelines will result in fines, sanctions, and legal penalties. 

Reputational Damage and Loss of Customer Confidence

Breaching AML and KYC compliance erodes customer trust and confidence in the entity. Adverse publicity, media scrutiny, and loss of loyal customers are common results of such compliance breaches, which can persuade customers to switch to competitors perceived as more trustworthy. 

Exposure to Greater Financial and Operational Risks

The consequences aren’t limited to the above three; there are more. The entities in question will become more vulnerable to financial scams. They will frequently be subjected to regulatory investigations and incur higher costs for remediation efforts. Loss of business partnerships and profitability are also long-term consequences they’ll have to face. 

Best Practices for KYC/AML in Banking, Crypto, and Fintech

Since banking, cryptocurrency, and the fintech industries are more vulnerable to financial fraud, here are some of the best KYC/AML practices that can be followed to mitigate such risks:

• Ensuring compliance with AML laws: Properly complying with AML laws and regulations will prevent businesses from incurring hefty fines and penalties for non-compliance. It will also ensure that their reputation and customer loyalty are preserved.
• Internal controls and audits: Businesses should conduct regular audits and reviews of their KYC/AML policies to ensure there are no weaknesses or loopholes that criminals can exploit to conduct illicit activities.
• Verified users: Fraudsters use fake IDs and various sophisticated schemes to conduct fraud. Financial institutions should ensure that only verified users can become customers, which can reduce innovative fraud attacks.
• Enhancing user experience: Financial institutions can optimise KYC/AML process workflows based on applicant risk profiles so they don’t have to pass extra checks. This motivates the customers to complete the process without dropping off in between, thus improving the overall user experience. Neokred makes this possible as the platform’s onboarding workflows ensure reduced customer drop-offs by 24%. 

Conclusion

To sum up, KYC and AML compliance share the same goal of preventing financial crimes. However, while KYC focuses on verifying customer identities, AML aims to detect and prevent illegal activities such as money laundering and other financial crimes. Understanding the key differences between KYC and AML and implementing their best practices will help you streamline and strengthen your compliance efforts. 

With Neokred’s KYC APIs, you can stay ahead of evolving regulations with constantly updated databases, real-time user identity and secure verifications, and more features that offer your customers a seamless onboarding experience. Contact us today to learn more about our KYC platform’s capabilities!

Imagine never needing to chase payments or worry about late fees again. Customers often forget due dates for credit card bills or subscriptions, which can negatively impact your business’ cash flow. However, with auto debit, these issues are a thing of the past.

The volume of digital payments made across India have surged, with the total valuation rising from Rs. 2071 crore in FY18 to Rs. 13,462 crore in FY23. Auto debit transactions have been a key driver behind this and are used extensively for making seamless recurring payments. Curious about how auto debit works and why it’s essential for your business? Let’s explore!

What is Auto Debit?

Auto debit is a payment facility issued by debit/credit card providers where funds are deducted from your bank account on a recurring basis.

Whether it's loan repayments, subscription fees, or utility bills, this facility lets you automatically transfer funds on a fixed date every month or year. This is one of the most convenient and hassle-free payment forms as you do not have to worry about the strain of missed EMI’s and can ensure proper cash flows.

It also eliminates the administrative burden of issuing reminders and manually collecting payments.

How Does the Auto Debit Facility Work?

With auto debits, you give permission to a company to collect payments directly from your bank account. You activate the auto debit facility through your bank’s website or application. Once activated, you can set the standard instructions for payment. The payment deductions take place without One-Time Passwords (OTPs) on the scheduled date.

However, to avoid any payment interruptions or possible overdraft charges, you’ll need to ensure that your bank has sufficient balance for a successful transaction deducted automatically.

You can also adjust payment dates or set a maximum limit for debits, providing flexibility in managing your finances.

How Are Automatic Debit Payments Different From Bill Pay?

Be Cautious About Sharing Bank Account Information

When it comes to managing your bank account or conducting business or transactions with other entities, safety is typically a major concern.

In FY24, the Reserve Bank of India (RBI) reported bank frauds amounting to more than 139.3 billion Indian rupees. Thus, the importance of safeguarding your bank account information cannot be overstated. 

To safeguard your account, consider these steps before providing authorization:

Verify The Company

Before you provide your bank information, verifying the legitimacy of the entity you are dealing with is essential.

You can start by researching the company by checking out its website, reviews, and business registrations. Additionally, when sharing information with them online, look for secure data transmission, such as Secure Sockets Layer (SSL) certification.

Know Your Rights

You have the right to protect and decide how your financial information is used. Be aware of your rights under regulations like the Information Technology Act (IT Act) and the Digital Personal Data Protection Act (DPDPA). Neokred’s Blutic platform helps you stay ahead of the DPDPA act’s compliance requirements. You can seamlessly manage user consent lifecycles, build user trust with transparent data collection declaration, and get free guidance on data collection and retention plans. Your bank may also offer fraud protection services to safeguard your transactions.

Monitor Account Balances

Ensure you have enough balance in your account before authorizing payments. While some banks offer overdraft facilities, they usually come with significant fees. Similarly, if your account lacks sufficient funds, you may incur an NSF (Non-Sufficient Funds) fee. Regularly monitor your account balances to avoid these unnecessary charges.

Review Your Agreement and its Terms

Before authorizing a payment, read the fine print and understand all the terms and conditions related to recurring payments and how your bank account information will be used. It’s important to understand how you can stop payments or cancel agreements as well.

E-Mandates and Auto Debit Card Payments

E-mandate is a digital payment service introduced by the RBI and the National Payments Corporation of India (NCPI). It allows individuals and businesses to authorize recurring payments from bank accounts.

With e-mandates, customers and businesses can seamlessly manage recurring payments such as SIPs, loans, insurance premiums, etc. as this system eliminates the need for manual labor, paperwork, constant reminders, and late payment charges.

For automatic debit card payments, e-mandates allow you to link your debit card to a merchant and authorize them to deduct fixed or variable amounts of money on a recurring basis. The maximum limit for a transaction via debit card e-mandate is Rs. 15,000. For amounts above that, OTP authentication will be required. In this case, the maximum single transaction limit is Rs. 1 Lakh.

Key RBI Guidelines for Auto Debit Transactions

On October 1, 2021, the RBI announced new guidelines for auto debit transactions to control recurring payments made through debit cards, credit cards, and other prepaid methods. They were also established to ease transaction processes for customers and businesses and to protect them from online frauds.

Here are some key highlights to keep in mind:

Informing Customers in Advance

Banks are mandated to notify customers of recurring payments 24 hours before the due date. After receiving confirmation from the customer, banks can proceed with the transaction. 

Additional Factor Authentication for Transactions above Rs. 15,000

Additional Factor Authentication (AFA) adds an extra layer of security to prevent unauthorized users from accessing your accounts. Once customers receive a pre-debit alert from their banks for recurring payments above Rs. 15,000, they will have to approve the transaction through an AFA in the form of OTPs.

Customers have the option to complete transactions of higher amounts such as insurance premiums or education fees without the need for approval via OTP.

Implementing One-Time Registration

Under the new guidelines, customers are only required to register once, after which they can conduct recurring transactions without an AFA. They can also specify the amount and validity period for subsequent transactions during the registration process.

Providing Opt-Out Options

Customers now have the option to opt-out of any transaction. They are also allowed to view, modify or cancel auto debit payment transactions from their accounts if they cannot make a payment on time.

How to Initiate a Direct Debit from Your Bank Account?

Direct debit is a way of collecting recurring payments directly from your customer’s bank accounts and this form of payment collection is highly advised as it is efficient, cheaper, and offers you higher control in managing your cash flows.

Here’s how to get started:

Step 1: Contact Your Bank

The first step is to get in touch with your bank and let them know that you’d like to join the direct debit scheme.

By verifying a few factors such as your company’s administrative capabilities and financial situation, the bank will decide whether you are eligible to accept direct debits.

Step 2: Choose a Direct Debit Company

The next step is to pick a payment aggregator or a payment service provider to process the payments received. You can choose a suitable platform considering several factors such as pricing, scalability, software interface, ease of use, and customer service provided.

Integration with your accounting software is also another key feature to look into, which is where Neokred shines at - it streamlines payment processing and management giving you maximum convenience and security in the processes. 

Step 3: Get Direct Debit Mandates From Your Customers

Once you’re all set up with your bank and payment provider, you can start collecting payments from your customers.

However, before that, you’ll need to acquire a Direct Debit Instruction (DDI). This document, signed by the customer, authorizes you to collect payments from their bank and it will be valid until it is canceled.

What are the Benefits of Autopay Options?

Autopay options are highly convenient for customers as they can set up auto-payments for their rent, cable, mortgages, to name a few.

Based on the initial authorization and payment details issued by the customer, businesses can automatically charge their customers every month for the services they provide.

Similar to customers, businesses also benefit from automatic payments. See how:

Offers Maximum Time Savings

Manually collecting payments or sending frequent follow-ups to your customers can be cumbersome and time consuming for your Accounts Receivable team. But when payments are set on auto-pilot, the administrative burdens of your A/R team are significantly reduced.

Enhances Customer Satisfaction

Put yourself in the customer’s shoes—late fees and repeated follow-up calls for overdue payments can be frustrating. As a business owner, it’s important to recognize that constant reminders and late payment notices could strain your customer relationships. Auto-payments solve this issue by allowing customers to enter their payment details once and authorize future transactions, removing the hassle of missed payments.

Provides Consistent Revenue

When billing your customers on an automated basis, you consistently receive payments as per the predetermined billing date. That means no waiting around for your customers to make a payment or to send them a follow-up. Since these payments are processed immediately, your business is more liquid. You can fast-track payment processing further with Neokred’s intelligent scheduling that clears the queue of pending payments to avoid any delays.

Promotes Increased Spending

According to a study conducted by Duke University, it was found that both residential and commercial customers increased electricity usage after switching to auto-payments. Although this may seem strange and highly debatable, automatic payments could encourage customers to spend more, assuming they aren’t too concerned about how much they spend on a regular basis.

For example, if you have an OTT-based subscription service, your customers may be willing to upgrade to a higher tier so their family members or friends can also access it.

The Bottom Line

Auto debit simplifies payment processing, allowing businesses to focus on growth rather than chasing down invoices. Whether it’s subscriptions or regular bills, auto debit can keep your cash flow stable and reduce administrative headaches.

Neokred makes auto debits easier with multiple early payment options, automated payment reminders, and real-time payment confirmations. To know more about our platform’s capabilities, contact us today!

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Over 40% of consumers now prefer online channels for financing major purchases, like cars. This shift points to a larger trend: younger generations, particularly Gen Z, are moving away from traditional bank visits in favor of digital-first solutions powered by Banking as a Service (BaaS).

This generation demands for advanced financial services that align with their tech-savvy lifestyles — enhanced identity and credit protection, robust data security, automated financial guidance. Traditional banking methods often fall short of these expectations, creating a gap that needs to be addressed.

In this context, BaaS bridges the gap. It seamlessly integrates banking and financial services in your day-to-day apps, changing the way we shop.

In this guide, we’ll explore how BaaS and embedded banking are revolutionizing the banking experience for businesses and end users alike.

BaaS, Explained

BaaS enables companies to integrate financial services traditionally offered by banks into their existing platforms. This integration allows Non-Financial Companies (NFCs) to offer banking functions like issuing cards and granting loans directly to their customers.

BaaS products include, but are not limited to:

• Card issuing
• Lending services
• Buy-now-pay-later financing
• Payment processing
• Direct financing options on merchant websites

BaaS providers collaborate with banks to offer services through banking APIs (Application Programming Interfaces — technology that allows different systems to essentially talk to each other).

These APIs allow end users to access banking services via the BaaS platform while still maintaining their relationship with their trusted bank.

The BaaS Value Chain

The BaaS ecosystem consists of four key components:

Configurations of BaaS

Historically, banks owned the entire value chain, from building products to distributing them through their channels (like branches). BaaS, however, focuses on 1-2 parts of this value chain. Based on this, companies can use four strategies to offer their products:

1. Providers: NFCs simply provide banking licenses and products.
2. Providers-Aggregators: NFCs integrate their services with BaaS providers to offer enhanced solutions.
3. Distributor-Aggregator: NFCs combine services from banks and BaaS providers to create unique products.
4. Distributor-only: NFCs distribute pre-built financial services tailored to their customer base.

Embedded Payments and Finance

When NFCs use the services of a BaaS provider, it’s called embedded finance.

This concept builds on ‘embedded payments’ — platforms providing services like payment gateways, wire transfers, and ACH access through a payments provider. The scope is limited to payments only.

A BaaS provider simply enables them to add even more financial services to their platform, boosting their unique selling proposition (USP).

The evolution from embedded payments to embedded finance represents significant growth in the capabilities of non-financial companies — from SaaS 2.0 to SaaS 3.0.

What BaaS is Not

It’s easy to confuse BaaS with open banking, platform banking, neobanking, and FinTechs. However, key differences set them apart.

BaaS vs. Open Banking

Open banking is a system where banks allow NFCs to access customers’ financial information (like transaction history) with customer consent. While both BaaS and open banking use banking APIs, they apply to different aspects of the financial ecosystem:

BaaS vs. Platform Banking

BaaS and platform banking are closely related since both use banking APIs, but there’s an important difference:

BaaS vs. Neobanks

BaaS serves as the foundational layer that powers other companies' financial services, while neobanks are the direct providers of banking services:

BaaS vs. FinTech

BaaS can be a facilitator for FinTechs, helping them deliver financial services without needing to become licensed banks:

How Does BaaS Work?

Let’s take an example of Buy Now, Pay Later (BNPL) offered by Amazon at the point of purchase to understand how BaaS works.

Recently, Amazon started offering BNPL options, which allow customers to purchase items and pay for them in installments over time, typically without interest if paid within a specific period.

To offer this service, Amazon integrated banking services directly into its checkout process. This allows customers to get instant approval for small loans at the point of purchase, without leaving the app or applying for a traditional credit card or loan.

By leveraging Banking as a Service, Amazon seamlessly provides these financial services. Customers can split their purchases into manageable payments, making larger items more affordable, without Amazon having to become a bank itself.

Behind the scenes, BaaS  connects Amazon’s platform to a partner bank’s services through APIs. When a customer selects BNPL, the BaaS infrastructure quickly performs credit checks, approves the loan, and sets up the payment schedule — all within seconds during checkout.

Common Use Cases for BaaS

BaaS creates diverse opportunities for businesses by streamlining financial operations, speeding up payments, and enhancing customer financing — all while improving the overall user experience. Here’s how Neokred’s Collectbot ensures this:

• Banking API Integration: Collectbot simplifies banking API integrations for different purposes with comprehensive documentation and support.
• Comprehensive Payment Solutions: Collectbot helps businesses accept payments across multiple channels (cards, net banking, UPI, wallets) without building their own banking infrastructure.
• Virtual Account Numbers (VAN): Businesses can create unique accounts for various functions — such as escrow services, merchant settlements, and KYC verification.
• Advanced Payout Systems: Collectbot handles complex operations like refunds, vendor payments, and reward disbursements, all while providing real-time reporting and analytics.

Plus, Collectbot offers tailored business solutions across different sectors:

• FinTech companies can leverage escrow accounts for P2P transactions
• E-commerce platforms can simplify marketplace seller payouts
• Subscription businesses can manage tiered subscriptions and prorated billing

Benefits of Banking as a Service

BaaS fosters collaboration between banks, NFCs, and customers, creating mutual benefits. 

BaaS’ Benefits for Banks

• New Revenue Streams: Banks earn revenue from API transactions and FinTech partnerships.

Cost-Savings: Outsourcing technology reduces development costs and operational expenses. 

• Enhanced Customer Insights: Collaboration with NFCs provides data on new customer groups, enabling personalized offers that boost sales as 80% of consumers are more likely to make a purchase when offered personalized experiences. 

BaaS’ Benefits for NFCs

• Faster Market Entry: NFCs bypass banking regulations by integrating with BaaS providers, launching financial products faster. 
• Increased Customer Trust: Leveraging a bank’s reputation enhances trust and also helps NFCs gain valuable customer insights.
• New Opportunities: NFCs can build new products by using various banking APIs, opening additional revenue streams.

BaaS’ Benefits for Customers

• Improved Experience: Customers enjoy embedded financial services within platforms they already use.
• Personalized Financial Solutions: Niche financial products designed for specific needs.
• More Options: Increased competition leads to a broader range of financial products.

The Rise of BaaS

BaaS is now a $7 trillion industry which has unsurprisingly reshaped financial services. Here are four primary factors driving the rise of BaaS:

Evolving Customer Demand

1. An increasing number of customers are seeking integrated, user-friendly financial services that cover their entire financial journey.
2. Plus, SMEs find their needs unmet by traditional banks and FinTechs are targeting this segment with tailored solutions.

FinTech Industry Growth

1. India’s FinTech adoption rate is 87% (compared to the global average of 64%). Thishigher adoption rate is fueling growth in this space.
2. BaaS allows FinTechs to enter the market quickly without having to meet the central bank’s stringent compliance requirements.

Regulatory Environment

1. Changes in the regulatory environment have also created a more favorable landscape for BaaS. Many jurisdictions now require banks to make their APIs public, encouraging competition and innovation.
2. Banks are also adapting to meet new regulatory requirements and ensure customer satisfaction.

Banking Industry Transformation

1. The industry itself is undergoing transformation thanks to shifts towards digital and mobile-first banking solutions.
2. Forecasts of declining banking revenue and profitability push banks to seek new income streams through BaaS partnerships.

Neokred and BaaS

As BaaS continues to evolve, it faces several challenges. Traditional banks must overhaul their technology and rethink their role in the financial ecosystem. Organizations also need to develop a well-defined API strategy that balances easy integration and business value with minimal complexity.

One such API is created by Neokred — its innovative BaaS solution, Collectbot, offers a comprehensive suite of banking APIs that enable businesses to seamlessly integrate banking services into their platforms.

Are you ready to transform your business with cutting-edge banking services? Schedule a demo to explore how Collectbot can empower your platform with seamless financial integration.