BaaS Shift to Enterprise Infrastructure
Roy Ng, EVP, Chief Business Officer at FIS, on the future of BaaS
This marks the end of BaaS as a venture portfolio of tiny fintech bets, and the start of BaaS as regulated infrastructure sold to scaled software companies and banks. In the earlier model, a young platform depended on young customers whose survival hinged on fundraising, so when startup funding tightened, the platform lost volume and accounts at the same time. Bond’s move inside FIS reflects the new winning formula, deeper compliance, standard processes, and customers with real budgets and existing distribution.
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The startup serving startups model worked when BaaS tools were chasing the long tail of new fintechs. That approach looked like Twilio for banking, but BaaS economics were always more fragile because revenue often depended on a few breakout customers and on interchange volume that could disappear if those startups stalled.
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Larger brands are a better fit because embedded finance is usually an add on to an existing business, not the business itself. A radiology software company, for example, can add cards, accounts, or lending into a workflow that already moves money, which makes the finance product easier to justify and less dependent on outside capital.
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Enterprise customers can actually launch faster than startups. They usually show up with budget, a team, and a defined use case, while early startups often want custom card designs, bespoke flows, and frequent product changes during implementation. That makes enterprise BaaS more standardized, more repeatable, and easier for sponsor banks to approve.
The next phase is a market where banks, processors, and embedded finance platforms converge around a smaller number of larger programs. Independent startups still have room, but mostly as narrow point solutions that plug into bigger platforms. The control point will shift toward whoever can package compliance, bank relationships, data, and product breadth into one reliable system of record.