top of page
  • Frank Tian

📖 BaaS Operators - Here is A Playbook

As regulators pay more attention to the fast-growing Banking-as-a-Service (BaaS) business, a group of sponsor banks published a playbook on 10/19.

The Alloy Labs is a consortium of 70+ community and mid-sized banks in the US - many actively participate in BaaS business.

The 10-page playbook does Not represent rules from regulators, but it offers guidance to those who want to explore this business.

A few highlights.

🟧 For fintechs/non-bank operators aka the “Programs”, there is more work beyond setting up a distribution channel.

- Own AML, BSA, KYC, and Fraud Monitoring implementation

- Leadership needs to emphasize legal/compliance

- Need proper, well-knowledgeable staff

- Buy adequate insurance

🟦 For sponsor banks, active control is needed to ensure safety and soundness.

- Specify accepted vs. prohibited businesses/end clients

- Monitor program activities and file SARs

- Review/approve all procedures

- Own all the customer data

At the intersection of regulation and innovations, the bank operators understand it is necessary to heighten the standard, for the long-term viability of the ecosystem.

🟩 My take on BaaS Risk Management

🔹If you enjoy this post, consider receiving content like this in your inbox

Recent Posts

See All

🔎 BaaS Partnership in Regulatory Focus

Last week, Blue Ridge Bank named a new president for its fintech division. It makes perfect sense to bring in someone with direct BaaS partnership supervisory experience. The community bank signed a r


bottom of page