Brands Buy Banking Capabilities Not Charters
Roy Ng, EVP, Chief Business Officer at FIS, on the future of BaaS
Embedded finance has settled into a model where most brands buy bank capabilities, not bank charters. In practice, that means a software company or consumer brand wants to launch cards, accounts, or lending without building a bank compliance team, regulator reporting stack, fraud controls, and sponsor oversight process. The survivors in U.S. BaaS are the providers that make that partnership model tighter, more standardized, and easier for both the brand and the bank to manage.
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The market moved away from startup serving startup middleware. Bond’s own evolution after the FIS acquisition was upmarket, toward larger enterprises and banks, with more emphasis on compliance tooling, standardized workflows, and white label launches that let a brand test financial products without assembling its own bank like operating stack.
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Owning a charter only makes sense for a narrow set of scaled fintechs. The clearest exceptions are players like Column and Lead Bank, which put charter, ledger, payments rails, and compliance in one entity. That structure has won major customers like Mercury, Brex, Affirm, and Revolut because it removes layers, but it is still a bank model, not a template for the long tail of brands.
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For most non banks, the goal is not to earn pure banking spread. It is to add a financial product inside an existing workflow, like a radiology software platform adding payments or lending inside patient billing, or a commerce platform using transaction data to decide who should get credit. The product is a revenue kicker and a source of customer data, not the core business.
The next phase of BaaS is more bank led and enterprise led. More brands will embed money movement, cards, and lending into their software, but they will do it through a smaller set of infrastructure partners and sponsor banks that can prove durable compliance, clean data flows, and repeatable launch playbooks.