How Banking as a Service is changing financial services sector

The digital revolution is transforming the banking industry. Every bank is eager to evolve using secure and compliant technology to fundamentally reimagine their business.

Transforming the financial services landscape will help drive economic prosperity across the continent and make financial services more accessible to the underbanked and previously unbanked.

As part of the need to differentiate new experiences, risk management, and compliance, the financial services industry is shifting toward open and interconnected ecosystems via the modernisation of core platforms such as payments and core banking systems. Banking and payments are becoming more open than ever, with customers benefiting from a plethora of new and useful products.

Banking as a Service (BaaS) enables this by providing an ecosystem in which licensed financial institutions integrate their banking services directly into the products of non-bank businesses. Connected BaaS allows you to manage an ecosystem of partners, including recruitment, licensing, partnering, and referrals.

Security, compliance, and governance are fully enabled, integrated, and automated across the entire services platform when built in the cloud. BaaS removes many of the barriers that businesses previously faced when attempting to launch or integrate financial products, thereby enabling banking to flourish.

The foundation for running financial services in the cloud is a trusted platform, and organisations that continuously develop to stay at the forefront of technology will become the digital leaders of the future and maintain their competitiveness.

The industry is facing unprecedented levels of regulatory scrutiny. Financial institutions that best manage their regulatory and compliance data will be on the path to better risk management and operational efficiency. And, while financial institutions want innovations to provide better value to customers, they will not make the cut unless they operate within appropriate compliance frameworks.

To create a safer world enabled by digital transformation, Microsoft adheres to the industry's strictest security and privacy standards, allowing the financial sector to manage its data footprint and create its governance. Microsoft's cybersecurity strategy makes extensive use of machine learning and data analytics to detect and respond to anomalous behaviour both inside and outside the organisation.

To enable a modern banking ecosystem with a focus on reducing end-to-end and capital expenditure while leveraging technology, financial institutions require a mature provider of financial service platforms. These institutions benefit from having a partner who can provide industry advice, digital advice, and will work with them to transition from a legacy traditional financial services organisation to a digitally focused one.

Ms Migwi is Microsoft Kenya country manager.