June 2024 – In an era defined by digital transformation and the ever-evolving landscape of financial services, the concept of banking as a service ("BaaS") has emerged as a key force reshaping the industry. By enabling non-bank entities to offer financial services through partnerships with licensed banks or financial institutions, BaaS has opened up a new realm of possibilities, facilitating innovation, enhancing customer experience and promoting financial inclusion. However, realising these opportunities is closely linked to navigating the complex regulatory framework that governs BaaS operations.
- BaaS can take various forms, allowing non-licensed entities to provide financial products such as banking, payment, e-money or investment services through their platforms or APIs in reliance on a duly licensed financial entity.
- Understanding the regulatory landscape surrounding BaaS is essential for all stakeholders—from aspiring fintech start-ups to established financial institutions. As technological advances continue to disrupt traditional banking models, regulators around the world are grappling with the task of adapting regulatory frameworks to accommodate the burgeoning BaaS ecosystem while safeguarding financial stability, consumer protection, and the integrity of the financial system. This dynamic regulatory environment underscores the importance of proactive engagement, collaboration and dialogue between regulators, industry participants and other stakeholders to promote responsible innovation.
This publication is a guide to the BaaS regulations in Kinstellar's jurisdictions, offering insights into compliance essentials, emerging trends, and how to thrive in this dynamic environment.
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- BaaS Bulgaria
- BaaS Croatia
- BaaS Czech Republic
- BaaS Hungary
- BaaS Kazakhstan
- BaaS Romania
- BaaS Serbia
- BaaS Slovakia
- BaaS Ukraine
- BaaS Uzbekistan
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Definitions
| Term | Definition |
|---|---|
| API | Application Programming Interface |
| EBA | European Banking Authority |
| EIOPA | European Insurance and Occupational Pensions Authority |
| EMD | Directive 2009/110/EC on the taking up, pursuit and prudential supervision of the business of electronic money institutions |
| FoE | Freedom of Establishment |
| FoS | Freedom of Service |
| MiFID2 | Directive 2014/65/EU on markets in financial instruments |
| PSD2 | Directive (EU) 2015/2366 on payment services in the internal market |
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.