Synctera Brings BaaS North With Bank of Canada’s Help

Synctera is bringing its Banking-as-a-Service (BaaS) platform to Canada.

The FinTech announced Thursday (March 9) it had formed a partnership with the National Bank of Canada to make the project happen, coming at a time when — as PYMNTS noted recently — digital banking is fast becoming a default means of financial interaction.

The company says it plans to launch its first FinTechs in the market within two quarters and be fully operational by the end of the year. To help fund this expansion, Synctera raised a strategic financing round of $15 million, led by NAventures, which is the corporate venture arm of the National Bank of Canada.

“Synctera’s transparent and compliance-focused platform helps bridge the gaps between financial institutions that seek to power indirect financial offerings and companies that seek to build, launch, and scale financial products efficiently,” said Joshuah Lebacq, principal at NAventures and BaaS lead at the National Bank of Canada.

As recent PYMNTS research has found, 25% of bankers see BaaS technology solutions as a critical opportunity to increase revenues.

“But banks must choose the right business partners to grow their business and for their initiatives to succeed in establishing a competitive moat relative to competition,” PYMNTS wrote earlier this week.

A new generation of know your customer (KYC), know your business (KYB), digital identity, and future-fit authentication such like biometrics are becoming increasingly vital to traditional firms adapting to this burgeoning environment and finding new lanes to thrive in.

And while developing in-house BaaS solutions might be OK for large financial institutions with dedicated and digitally fluent staff, most businesses will need to work with best-fit technology providers to implement the BaaS attributes that meet their needs.

“It’s exactly the right time, right now, for embedded banking because it’s a real revenue generator for the banks and for corporates,” Treasury Prime CEO Chris Dean told PYMNTS CEO Karen Webster in an interview earlier this year.

PYMNTS research shows that BaaS is a small market for the moment, with only 7% of bank executives saying they provide these services, while 4% are developing a BaaS strategy.

“This means those businesses that get in early can enjoy an accelerated growth runway as the rest of the industry catches up,” PYMNTS wrote.

Experts surveyed by PYMNTS said the BaaS sector is expanding by 26% annually, and 13% of bank executives indicate that they are considering launching BaaS offerings in the near future, while 32% are assessing how BaaS can streamline their daily operations.

One survey found that 54% of bank executives said they have faced increased competition over the past three years as the rise of embedded finance and other digital banking alternatives transform both operational realities and their opportunities.