BaaS vs Open Banking Vs Platform Banking

 Banking as a Service Providers

• What it is: licensed banks that enable other businesses to integrate digital banking and payment services directly into their own products. 
• How it works: the business’ frontend is connected to the BaaS provider via API, allowing the business to offer digital lending services, account management and payment services themselves in their own apps and websites.

Open banking providers (a.k.a third-party service providers)

• What it is: non-banks that access data from their customer’s bank account to provide account insights or trigger payments from within an app or website. 
• How it works: the open banking providers connect to the bank’s system via API to retrieve the data. Often, the API layer between the bank and the open banking provider is provided by an API banking platform. 

Platform banking

• What it is: banks integrating services from other providers, mainly fintechs, in order to offer their customers a broader range of financial services from one bank account. 
• How it works: depending on the type of set-up, the fintech’s services are usually fully integrated into the bank’s app/webpage user interface via API.