Is ‘headless banking’ the next evolution of BaaS?
Headless banking—or banking services decoupled from front-end user interfaces—could reshape banking-as-a-service offerings from smaller financial institutions and provide a new means of revenue generation. But technology limitations and regulatory mandates could limit the rate at which it is adopted.
What if banks stopped caring about crafting the perfect customer experience?
What if, instead, some banks focused on delivering banking services such as checks, bank accounts or automated clearing house infrastructure through an open application programming interface (API) — and let someone else worry about customer interaction?
Headless or sponsored banking — service-focused banks without branches, apps, or any sort of customer-facing user interface — is a budding trend in banking-as-a-service that is poised to help redefine the way smaller, community banks go to market and generate revenue. At least on paper.
How? These banks allow financial institutions to focus on technology and infrastructure without investing time and resources into costly user-facing experiences, Simon Taylor, head of strategy and content at Sardine.ai writes in a LinkedIn post. But technology limitations and regulatory mandates could limit the rate at which headless banking is adopted.
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