Changing BaaS providers: Why, how, and where to get started

Somewhere in your fintech journey, you may find your original banking as a service (BaaS) provider doesn’t meet your evolving needs. As your business scales, you may need more flexibility or controls than your current provider can offer. You may want to work with multiple bank partners for more product options and better pricing. Or, other circumstances outside your control could also prompt you to change bank partners.

Embedded Fintech

As the fintech industry matures, more and more companies are looking to change BaaS providers to match their evolving needs at scale — yet there isn’t a lot of information out there on how to do so. This guide will fill gaps and answer key questions. We’ll explore reasons for switching BaaS providers, and offer insight into what the switching process may look like for you. 

This is also applicable to companies that are directly integrated with a partner bank, that are looking to add a BaaS provider, or change to a bank that works with a strong technology provider. 

The Treasury Prime API makes it simple to transition from another BaaS provider, with support from our customer success team. Here’s the migration process in a nutshell, which we will address in more detail.

Reasons for switching BaaS providers

Businesses evolve. Your company may be growing, pivoting, or pursuing a new set of customers. If your current BaaS provider no longer meets your needs, it’s time to consider switching. 

Here are some reasons you may consider changing BaaS providers:

• Bank capacity limitations: Your BaaS provider integrates with only one bank, which limits your options and capacity. Or, your BaaS provider cannot support user growth. 
• Feature limitations: Your BaaS provider cannot support desired features — remote check deposit, fiat on-ramp, check issuing, or other features you might need.
• Technical issues: Your BaaS provider is poorly integrated with your partner bank, or technical issues arise that interfere with customer experience. 
• Lack of direct bank relationship: All communication is channeled through the BaaS provider instead of with your bank directly, leading to a lack of transparency and increasing the likelihood of miscommunication. 
• Bad customer service: The provider is hard to reach and does not solve problems to your satisfaction. 

All of these factors can greatly impact your day-to-day operations as well as your long-term risk.

Case Study: Tuvoli first launched with bank BBVA’s Open Platform. When BBVA was acquired by PNC, the bank had to shut down its Open Platform, which meant its fintech partners like Tuvoli had to scramble to find a new shop. Tuvoli chose to partner with BaaS provider Treasury Prime and completed its migration in less than 3 months. 

“We just had to shift everything from the back end and point it towards Treasury Prime’s APIs. The technology, I thought, was very mature. The documentation was well laid out.” — Sandeep Dalmia, Co-founder of Tuvoli.

The importance of choosing the right BaaS provider

Changing BaaS providers is a process that takes time and energy. Ideally, you want to avoid having to change BaaS providers more than once. If you work with a BaaS provider like Treasury Prime that is integrated with a large bank network, you can change your bank partner in the future or even work with more than one bank using the same API.

If you are directly integrated with a bank and you need to change bank partners, you could hypothetically directly integrate with another bank, without a BaaS provider. This approach limits your flexibility because you are once again stuck with a single point of failure. It forces you to rebuild your API integration from the ground up if you have to change bank partners in the future. Another limitation of partnering directly with a bank, without a BaaS integration, is that only a limited pool of banks are capable of integrating on their own. 

Case Study: First Dollar started out partnering with one bank and, as it grew, was able to switch to another bank partner in the Treasury Prime network to ensure support for its continued product needs. The switch took around three months.

“As a startup, it was also imperative that this migration happen fast so as not to disrupt our business and upcoming customer launches. Treasury Prime and Piermont Bank were excellent partners who worked closely to ensure continuity across our business.” — First Dollar Chief Product Officer Colin Anawaty

How can you find the right BaaS provider?

Once you’ve determined what you’re missing from your current BaaS setup, you can look for a provider that fills those gaps. Here are some features of a great BaaS provider that can support your enterprise.

• Extensive bank network: When you integrate with a BaaS provider that has many bank partners, you can change or expand to new partners as needed without having to start from scratch and rebuild an integration. 
• Direct bank relationships: A BaaS platform is a technology layer, and technology is no substitute for direct communication. Look for a BaaS provider that facilitates a direct relationship between you and partner banks, so that you can get banks on board with your product roadmap and work together to resolve issues quickly.
• Extensive vendor list: One-size-fits-all never truly fits all. A BaaS provider with an extensive vendor list offers more opportunities for customization of features, KYC process, and other core aspects of your product. 
• State-of-the-art API: A BaaS provider that continually updates and enhances its modern banking API will be better equipped to meet your evolving needs, and will ensure a smoother end-user experience. 
• Both FBO & on-core integrations: Options are always helpful. Look for a provider that allows you to choose between opening your end users’ accounts directly on the bank's core, or under the umbrella of your own dedicated FBO. 
• Dedicated FBO: If you choose an FBO approach, make sure you are getting your own dedicated FBO account and not having your accounts pooled with those of other fintechs. Otherwise, you’re needlessly sharing risk with other companies. 
• Modular Platform for Agile Growth: Choose a BaaS provider that can provide scalability and flexible features on an extendable software platform.

Want more insight into embedded banking products for B2B SaaS companies? Download our ultimate guidebook.

What is the process to change BaaS providers?

The process of changing BaaS providers is similar to a normal launch process, and Treasury Prime will help you transition existing customers over to your new setup. Here’s the process: 

1. Partnership evaluation — Find the top Baas provider
   Our sales team will gather information to determine the best bank candidates for your use case. Based on your preference, we’ll pre-qualify and match you with the right bank before connecting you with them directly. We are integrated with more than a dozen banks, and our list is growing. If you’ve come to us through a preferred bank partner, you can skip this step. During this phase, your engineers can also start getting familiar with our API through Treasury Prime’s sandbox. 
2. Kickoff
   Once you’ve connected with a bank partner, we’ll help you through the integration process. We’ll also assign you a customer success manager who will be dedicated to your company as it grows with Treasury Prime. 
3. Production setup
   You’ll open accounts and receive API keys to activate features and services. This is also the phase where you’ll start customizing cards. 
4. Testing and multi-phase launch
   After creating test accounts, you’ll start to launch your product. We recommend starting with net new customers — customers that are getting on-boarded for the first time. Next, you can start onboarding existing customers in batches. One strategy to make the migration smooth can be telling customers about upgrades that come with the switch or offering rewards.
5. Transition away from prior provider
   Once you have made progress with transitioning your customers, it will be time to close out the relationship with your prior provider. With your own dedicated customer support team, Treasury Prime can help make the process seamless and as frictionless as possible.

Changing BaaS providers is a big decision and sometimes necessary for your company’s long-term success. It’s important to choose a reputable BaaS provider and advanced embedded banking software that gives you a wide bank network, flexible features on an extendable software platform, dedicated customer support, and a bespoke compliance program so that you can scale.

Related Banking as a Service Content:

Getting Your App to a Smooth Launch with BaaS

Best Practices for Changing Your Bank Partner

Top 3 Embedded Banking Strategies from Activate at Money 20/20

Wondering how embedded banking could help your business? Contact Treasury Prime — we have a true multi-bank network, the deepest bank core integrations, and extensive compliance experience. Tearsheet named us the Best Banking as a Service company for the second year in a row. Talk to the best embedded finance team in the industry. Want to learn more about our process? View our API reference or play around with our Developer Sandbox