Financial markets have evolved over the years, where brokers needed to be located in exchange marketplaces physically. Today, almost everything is done remotely.
So did market participants, from brokers to traders, investors and other market makers, connected online using sophisticated systems and networks.
BaaS is one of those systems that provides an efficient and simple way to trade in financial markets and gain access to a wide choice of tradable instruments. Brokerage as a service became an essential part of banking systems, offering trading intermediary services for all users.
Let’s find out how BaaS works and what are its use cases.
Understanding BaaS
Brokerage as a service entails using advanced white-label software to offer access to financial markets to users and traders. These applications cooperate with banking systems, allowing banks to extend their offerings and providing tools to trade various instruments.
White-label trading platforms are ready-to-use systems customised for providers’ needs and preferences. These platforms are powered with different integrations using APIs and gateway to onboard various service providers.
BaaS involves different tools and instruments to trade in different financial markets, based on the choice of the middleman, like banks, and utilising the cloud system and storage.
Why Use BaaS Solution?
Financial institutions strive to keep up with contemporary market changes and advanced technologies. Therefore, banks and other financial firms use BaaS solutions to benefit from these advantages.
Integration
BaaS white-label platforms are highly flexible and offer different integration opportunities with different service providers, including payment gateway, lead management, marketing campaigns, email service, and more. These integrations are executed seamlessly, allowing brokers to launch their services and compete quickly in financial marketplaces.
Scalability
BaaS solutions are adjustable to fit the broker’s needs and business size. They help brokers scale up or scale down their offerings based on their target market and market conditions. Therefore, newly emerging brokerages can leverage these platforms and expand their business over time.
Technical Support
BaaS platform providers are tech-savvy companies that offer ongoing technical support if banks or brokers face difficulties utilising the BaaS solutions.
BaaS-own technical support helps businesses save costs on hiring more experienced developers and engineers to maintain and supervise the platform performance by relying on the provider’s experienced and knowledgeable technicians.
BaaS Use Cases
BaaS are highly flexible platforms and solutions that can be used regardless of the company’s size or expertise. Therefore, you can find BaaS systems in these businesses.
Banks
Banks are key players in financial markets, acting as brokers, market makers, liquidity providers, and more. Banking systems require cutting-edge technology to keep up with their complex network of customers of different departments and requirements.
Hedge Funds
Hedge funds are important players in the financial markets who provide liquidity and maintain financial stability and efficiency.
Hedge funds offer various trading solutions and strategies to big investors and entrepreneurs with different risk portfolios. BaaS offer a robust system to manage different traders’ risk level, portfolios and trading strategies in different markets.
Investment Firms
Investment firms deal with various traders and investors who rely on these firms’ experience and market knowledge, rendering successful trades and portfolio management.
Investment companies can utilise BaaS white-label platforms to manage complex databases, including different investors, financial markets, risk portfolios, account managers, and more. Also, these systems help investment firms create analytical reports and forecasts that help grow their business.
Exchanges
Financial exchanges offer trading opportunities in different markets to many traders and investors, primarily retail investors. These exchanges source liquidity from other financial firms like hedge funds and banks and offer trading solutions to investors.
Therefore, using BaaS is essential to keep up with multiple users and service providers, offering competitive trading options and scaling their business.
Conclusion
BaaS are robust systems that make trading and cooperating with different market participants seamless and flexible. Brokerage as a service offers customised platforms that are easily integrated, allowing banks and other market participants to cooperate and offer various trading solutions.
Brokerage as a solution is used by different market players, regardless of company size or expertise, and these advanced fintech systems help financial organisations to scale and grow their businesses.
