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Alloy Labs Members Move to Standardize BaaS

As Banking-as-a-Service Booms, Community Banks Assert Their Crucial Role in Defining Industry Standards

Members of the Alloy Labs Alliance, a shared innovation lab for community and mid-size banks, have published the first of its industry insights designed to standardize the non-competitive aspects of banking-as-a-service.

The paper titled The New Nomenclature Behind the BaaS Partnership Boom defines the terms and roles that are commonly — but often incorrectly — used in the market, and makes an argument for the importance of having a shared industry vocabulary. The paper is part of the work done by Alloy Labs’ two year old BaaS Center of Excellence.

“This began as an effort to help startups use the same terminology when engaging with multiple banks, but we quickly realized that even among our group of banks we used terms differently,” says Mike McCrary, who grew the BaaS business for Lincoln Savings Bank. “It is important that bank leaders lead the way in maturing the space to promote responsible innovation.”

The timing for the publication is ripe, given the explosive growth this segment is experiencing. The BaaS market is projected to reach close to $2.3 billion by 2028, growing at a CAGR of 26.33% from 2021 to 2028 according to data from Verified Market Research. This growth is being driven by the growing number of financial technology firms looking to offer banking products serving their customers, as well as “middleware” providers who connect those firms with banks.

“Over the last couple of years we’ve seen platform providers move quickly to sign up new banks interested in diversifying their business models,” explains Alloy Labs CEO, Jason Henrichs. “That’s helped to meet the demand we’re seeing from new fintechs looking to provide bank products. But this level of hypergrowth is also creating a gold rush mentality that we’re concerned may pose an eventual regulatory risk for the market.” According to Henrichs, this concern was part of the impetus for the Alliance’s bank members — many of whom have been at the forefront of BaaS for years — to collaborate on standards and best practices for the industry.

For Trey Maust, the Chairman of Alliance member Lewis & Clark Bancorp which recently launched BankEvo, a BaaS infrastructure provider, this moment in time presents an opportunity for banks to present a “unified front” as an industry.

“There is a massive supply and demand imbalance right now between those who would like to deliver financial services to the market and those that are willing to provide the supply,” Maust says. “I think we have an opportunity to show that banks are a critical part of this model and play an outsized role in the supply chain, especially when you consider the value of the domain expertise that banks bring to the table in their fintech partnerships.”

The Alloy Labs Alliance boasts a membership that includes BaaS heavyweights such as Cross River Bank (powers Affirm, Coinbase, and Stripe), Lincoln Savings Bank (powers Qapital, Acorns, and M1), and Choice Financial Group (powers Current, Douugh, and Lili). The group plans to continue publishing its findings as the banks work through important policies and procedures to establish best practices for the industry.

About Alloy Labs

Alloy Labs is the only bank consortium that drives exponential growth for members by leveraging network effects. Member banks work together to identify opportunities for differentiation and co-create solutions that give them a competitive edge. In addition, members have exclusive access to The Concept Lab, a reverse accelerator that builds unique partnerships with startups, and the Alloy Alchemist Fund, which invests in the technology companies shaping the future of financial services. For more information visit


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