BBVA rolls out BaaS platform in the United States

“Banking as a service” (BaaS) solutions are gaining momentum in the financial services industry, as demonstrated by BBVA, which has earlier today announced the launch of a BaaS platform in the United States.

BBVA now offers a full suite of Banking as a Service products as its BBVA Open Platform program has moved out of beta.

The move will see the bank offer a large range of banking products and services to businesses who want to offer their customers financial products without taking on full banking themselves. BBVA’s Open Platform initiative enables third parties to easily integrate payments and complementary banking services into their own business models to create seamless user experiences. Open Platform works by allowing third parties, once they pass strict compliance and security checks, to access through APIs (Application Protocol Interfaces) a range of services the bank can offer.

BBVA’s Banking as a Service solution allows companies to connect into a core digital banking platform, through which they can access APIs such as the Move Money, Identity Verification, Account Origination, and Card Issuance services.

BBVA anticipates that this kind of initiative will enable companies to bring great financial technology ideas to life for both retail and enterprise clients across industry verticals, as it offers a fast and easy solution for innovators to bring new ideas and products to market. The Open Platform technology is already being used by the likes of Simple and digit.co.

Following a six-month beta period, which has already seen dozens of businesses register their interest in working with BBVA, the service has now gone live more widely. In addition, the Open Platform team also operates a sandbox testing environment, where companies interested in developing solutions linked to banking’s open APIs can work through their proposal before they fully sign up for launch.

While in Europe the move towards open banking services has been driven by regulations like the Payment Services Directive 2 (PSD2), in the United States, it is expected to be company and consumer interest that pushes things forward, BBVA explains.

BBVA Open Platform forms part of BBVA’s efforts to maximize the potential for open API platform banking more widely. The bank moved ahead of the PSD2 requirements last summer with the launch of the BBVA API Market in Spain, which has 11 banking APIs available for use. In Mexico BBVA has also rolled out a number of APIs, with more due on stream in the coming months.

The platform works as a complete and unified development platform, allowing interested businesses to construct banking solutions for their customers in a way that is flexible, and offers scalable infrastructure for financial technology and digital commerce.

Let’s note that well-established financial services firms, such as Saxo Bank, have recognized the potential of the BaaS model. In a guest post from March this year, Saxo’s Benny Boye Johansen noted that by providing open access to Saxo’s cloud based ”Banking as a Service” infrastructure, the company became more relevant to a larger client base which could deliver a better user experience. For example, by allowing a Chinese introducing broker to develop their own user experience to serve clients in that region Saxo could benefit from the local development talent and understanding of the Chinese market.