The financial industry is undergoing a fundamental shift, with Banking-as-a-Service (BaaS) emerging as a powerful enabler of embedded finance and new business models. By providing the core banking infrastructure that fintechs, brands, and financial institutions need to launch financial services, BaaS opens up vast opportunities for innovation and growth.
However, scalability and performance are non-negotiable in this space. A successful BaaS provider must handle millions of transactions daily, ensure real-time responsiveness, and operate with near-zero downtime. That’s why leading BaaS players rely on high-performance core banking platforms like Tuum, which processes up to 1,000 transactions per second (86 million daily) with 50ms response times and 99.99% availability.
Let’s explore five of the most promising use cases for BaaS and how this model is transforming financial services.
1. Embedded Finance: Banking Where Customers Need It
Embedded finance is redefining how consumers and businesses interact with financial services by integrating banking products directly into non-financial platforms. Whether it’s ride-hailing apps offering instant driver payouts, e-commerce platforms embedding credit solutions at checkout, or payroll providers enabling salary advances, BaaS makes it possible to launch financial services where they are most relevant.
With Tuum’s high-performance infrastructure, BaaS providers can scale effortlessly, ensuring smooth operations even during peak demand periods. This allows brands to integrate financial services without the risk of system slowdowns or failures.
2. Digital Banking for Niche Audiences
BaaS is enabling the rise of specialized digital banks catering to underserved markets, such as gig workers, SMEs, and expats. Traditional banks have struggled to serve these segments—not just due to rigid risk models, but also because of the high cost of servicing them with legacy infrastructure. However, with automation, AI-driven decisioning, and real-time digital onboarding, banks and fintechs can now serve these markets profitably while improving financial inclusion.
For example, Tuum’s cloud-native architecture allows digital banks to scale efficiently, automating everything from KYC/AML verification to loan underwriting and transaction monitoring. By reducing manual intervention and leveraging AI-driven credit assessments, banks can offer tailored financial products at a fraction of the cost while expanding into previously unprofitable customer segments.
With Tuum, digital banks can support millions of accounts, process high transaction volumes in real time, and quickly adapt to evolving customer needs—without infrastructure bottlenecks. This gives banks an opportunity to capture market share in underserved segments that were once considered too costly to serve.
3. White-Label Banking: Financial Services Without a Banking License
Brands and non-financial companies increasingly recognize the value of offering banking services under their own name, without acquiring a banking license. White-label banking, enabled by BaaS, allows retailers, airlines, and telecommunications companies to offer branded financial products such as debit cards, savings accounts, and loyalty-based lending programs.
A prime example is LHV Bank, one of Europe’s leading BaaS providers, which powers over 200 fintechs, including global brands like Wise and Coinbase. By providing white-label banking infrastructure, LHV enables fintechs to offer regulated financial services without holding a banking license themselves. This model allows companies to focus on customer experience and growth, while the underlying banking operations are handled by a trusted BaaS provider.
4. SME Lending & Alternative Credit Models
Small and medium-sized enterprises (SMEs) often struggle with access to credit due to outdated risk assessment models used by traditional banks. BaaS is changing this by enabling alternative lenders to leverage real-time financial data, AI-driven credit scoring, and seamless digital onboarding to offer tailored financing solutions.
Tuum’s lending module provides instant loan decisioning and real-time disbursements, backed by an architecture that ensures lenders can handle thousands of loan applications per second without service disruptions.
5. Cross-Border Payments & Multi-Currency Accounts
Globalization and the rise of remote work have increased demand for seamless, cost-effective cross-border payments and multi-currency banking. BaaS enables fintechs and challenger banks to offer real-time international transactions, virtual IBANs, and borderless accounts without needing to build their own correspondent banking network.
A great example is Zenus Bank, a global digital bank that enables international businesses to access US banking services seamlessly. By leveraging an infrastructure bank, Zenus has eliminated the complexity of setting up local bank accounts, allowing businesses worldwide to operate in USD with minimal friction. This proves how BaaS can redefine global banking and payments—especially for companies with international ambitions.
From Possibility to Performance
BaaS is revolutionizing financial services by breaking down barriers to entry and enabling companies to embed, scale, and monetize financial products faster than ever before. However, without the right infrastructure, scalability can quickly become a bottleneck.
With Tuum’s cloud-native, API-first core banking platform, BaaS providers have the agility, security, and high-performance infrastructure required to handle millions of transactions daily, expand into new markets, and operate without service interruptions.
As demand for embedded finance and digital banking accelerates, the ability to scale seamlessly will be the ultimate differentiator in the BaaS space.
If you’re scaling embedded finance or launching a digital bank, your infrastructure is your competitive edge. Let’s explore how Tuum can future-proof your strategy.
Get in touch to find out more.