The evolution of Banking as a Service (BaaS) technology in recent years has enabled a surge of financial innovation. Banks of all sizes can leverage technology to facilitate scalable partnerships with non-bank companies, accelerating the launch of new FinTech products and a wide range of embedded finance use cases.

However, with all of this innovation making it easier and faster for non-bank companies to launch banking products, compliance and operational excellence has, in some instances, taken a back seat. This has resulted in multiple consent orders being handed down to banks that operate in the BaaS space.

From these consent orders, new regulatory guidance, and operational learnings from the industry’s maturity, some key principles have emerged for how sponsor banks and their non-bank partners (“customers”) need to operate together to form strong and compliant partnerships.

These principles are:

1. Banks and customers must have a strong relationship 
2. Banks must own compliance accountability 
3. Banks and customers need to keep track of every penny
4. All parties of a BaaS relationship must have operational resilience
5. Compliance responsibilities must be defined in the contract 
6. Banks and customers must be aligned on success criteria 

In our guide, "Getting BaaS Right: The Guide to Creating Successful Partnerships", we break down these six principles and provide actionable advice for both sponsor banks and non-bank companies launching new banking products.

Additionally, we provide an overview of how the Synctera Platform and operating models enable customers and banks to form successful partnerships aligned with the six principles.

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The Synctera Platform

The Synctera Platform is a flexible and modular banking and payments platform purpose-built to support scalable and compliant BaaS relationships through our:

• Synctera Console: an intuitive interface and set of compliance tools providing the sponsor bank and customer with complete visibility into each program. The Synctera Console facilitates seamless communication, efficient workflows, and effective oversight for sponsor banks and customers.  
• Synctera Ledger: the centralized source of all end user, account, and transaction data. In combination with our powerful reconciliation technology, the Synctera Ledger helps sponsor banks and customers confidently keep track of every penny, across all data sources and payment rails.
• Sponsor bank network: through our bank matching process we facilitate strong relationships and alignment on success between sponsor banks and customers. Our sponsor bank network also allows customers to utilize multiple banks or easily switch sponsor bank partners, supporting operational resilience.

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Synctera’s Operating Models

Synctera supports two different models for how customers and sponsor banks can work with us and with each other. Both contractual models ensure a clear delineation of roles and responsibilities and compliance accountability.

• Powered By Synctera is for customers and banks that want to leverage the Synctera Platform and technology, but have in-house capabilities for program management. Powered By is also ideal for customers that want to work with a sponsor bank not yet a part of the Synctera network.  
• Managed By Synctera is Synctera’s complete turn-key experience for BaaS banks and customers. In this model, Synctera facilitates the bank and customer relationship, provides streamlined contracting, and offers operational support from onboarding through launch.

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