Navigating the Regulatory Landscape: An Overview of Banking as a Service

June 2024 – In an era defined by digital transformation and the ever-evolving landscape of financial services, the concept of banking as a service (“BaaS”) has emerged as a key force reshaping the industry. By enabling non-bank entities to offer financial services through partnerships with licensed banks or financial institutions, BaaS has opened up a new realm of possibilities, facilitating innovation, enhancing customer experience and promoting financial inclusion. However, realising these opportunities is closely linked to navigating the complex regulatory framework that governs BaaS operations.

  • BaaS can take various forms, allowing non-licensed entities to provide financial products such as banking, payment, e-money or investment services through their platforms or APIs in reliance on a duly licensed financial entity.
  • Understanding the regulatory landscape surrounding BaaS is essential for all stakeholders—from aspiring fintech start-ups to established financial institutions. As technological advances continue to disrupt traditional banking models, regulators around the world are grappling with the task of adapting regulatory frameworks to accommodate the burgeoning BaaS ecosystem while safeguarding financial stability, consumer protection, and the integrity of the financial system. This dynamic regulatory environment underscores the importance of proactive engagement, collaboration and dialogue between regulators, industry participants and other stakeholders to promote responsible innovation.

This publication is a guide to the BaaS regulations in Kinstellar’s jurisdictions, offering insights into compliance essentials, emerging trends, and how to thrive in this dynamic environment.

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Application Programming Interface


European Banking Authority


European Insurance and Occupational Pensions Authority


Directive 2009/110/EC on the taking up, pursuit and prudential supervision of the business of electronic money institutions


Freedom of Establishment


Freedom of Service


Directive 2014/65/EU on markets in financial instruments


Directive (EU) 2015/2366 on payment services in the internal market

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