Companies that want to offer financial services, such as accounts, payments, and transfers, need to decide how to build and operate this infrastructure.
In general, there are two options: build an in-house infrastructure and obtain the necessary licenses or work with a Banking as a Service (BaaS) provider.
Building everything in-house gives the company greater control over the operation, but requires investments in technology, specialized professionals, processes, and regulatory requirements. BaaS, on the other hand, allows companies to use an existing infrastructure and connect it to their products through APIs.
The best option depends on each company's business model and objectives. For companies that want to offer financial services without having to build the entire infrastructure from scratch, BaaS can reduce the time and investment required to get started.
What Does Building an In-House Infrastructure Involve?
Building a financial operation from scratch requires much more than developing a system.
The company needs to obtain the necessary authorizations from the Central Bank of Brazil, develop the technology used by its financial services, connect its systems to other market participants, and create processes to comply with applicable regulations.
The work does not end once the operation goes live. Companies must maintain specialized teams, internal controls, risk management, compliance processes, and anti-money laundering mechanisms.
In practice, building an in-house infrastructure means taking responsibility for several different areas of the financial operation.
The Main Challenges of Building In-House Infrastructure
1. Time and Regulatory Complexity
Operating independently in Brazil requires complying with the rules applicable to the activity and obtaining the necessary authorizations.
This process may involve changes to the company's structure, the creation of policies and controls, hiring specialized professionals, and preparing documentation.
And the responsibility does not end once authorization is granted. The company must continue complying with regulations and maintaining its controls throughout the entire operation.
2. Investment in Technology
A financial operation needs to connect different systems and services. Depending on what the company plans to offer, this may include core banking, accounts, payments, collections, financial systems, and connections with other market participants.
According to Barte, building an in-house infrastructure — including core banking, integration with payment clearing systems, and connections to card networks — can cost between BRL 500,000 and BRL 3 million initially.
In addition to this amount, there are ongoing costs related to maintenance, updates, and improvements.
3. Need for Specialized Professionals
Companies also need to build a team to manage the different parts of the operation.
In addition to technology professionals, they may need specialists in compliance, anti-money laundering, risk management, security, and financial operations.
For companies whose core business is not financial services, building this entire team can consume resources that could otherwise be invested in developing their own product.
How Does Banking as a Service Work?
Banking as a Service (BaaS) allows companies to offer financial services without having to build all the necessary infrastructure themselves.
Under this model, a specialized provider makes its infrastructure available, and the company connects the services it needs to its own systems using APIs.
Imagine a company that wants to offer a digital account to its customers. If it chose to build everything itself, it would need to develop or contract different systems and services. With BaaS, part of this infrastructure is already in place.
The company integrates the services it needs into its app or platform and can offer the account as part of its own product.
For the end user, the BaaS provider may not even be visible. They simply see an account, make a payment, or complete a transfer within the app they already use.
The Main Benefits of BaaS
Faster Launch
One of the main advantages of BaaS is starting with infrastructure that is already ready to be integrated.
According to the data presented in this article, integration with a BaaS provider takes an average of three months from project kickoff to production.
This can allow a company to bring a financial product to market faster than if it had to develop the entire infrastructure internally.
Lower Upfront Investment
Because much of the infrastructure already exists, the company does not have to pay for the entire development and implementation process on its own.
Instead of investing millions to build an in-house operation from the start, the company can hire a provider and pay according to the selected commercial model.
This can be especially useful for companies that are still testing a new idea or do not yet have enough volume to justify building their own infrastructure.
Simpler Operations
BaaS can also simplify day-to-day operations by bringing different financial services together in a single solution.
Depending on the provider, companies can integrate accounts, payments, collections, and other services through APIs.
This can reduce manual processes and simplify tasks such as reconciliation and transaction monitoring.
Easier to Scale
The model also allows companies to expand their service offering as the business grows.
Instead of creating a new infrastructure every time they launch a product, companies can add functionalities offered by the provider.
This allows teams to spend more time on what truly differentiates the business: developing the product, improving the customer experience, and growing.
Does BaaS Mean Losing Control?
Not necessarily.
When using BaaS, part of the operation is handled by a partner, but the company still controls important aspects of the customer experience.
For example, it can decide how services are presented within the product, which functionalities are offered, and how they are incorporated into the user's journey.
The main difference is that the company does not have to develop and manage all the systems required to offer these services on its own.
That's why, before choosing a provider, it is important to understand which services it offers, which responsibilities remain with the company, and how the solution can be integrated into the existing operation.
When Does In-House Infrastructure Make Sense?
Building an in-house infrastructure can be a good option for companies that need significant control over their operations or already have enough scale to justify the investment.
It may also make sense when financial services are a core part of the business and the company has the technical, financial, and regulatory capabilities to develop and maintain the infrastructure.
In this case, the company takes on more responsibilities but also gains greater autonomy over technology, processes, and the evolution of the operation.
When Is BaaS the Better Option?
BaaS may be more suitable for companies that want to launch financial services quickly, reduce upfront investment, or test a new business model without building the entire infrastructure from scratch.
It is especially useful when financial services are only one part of the product rather than the company's core business.
A software platform, marketplace, or fintech, for example, may want to add accounts, payments, or collections to its product without having to become a fully-fledged financial institution.
In this case, a specialized solution allows these services to be added more simply and quickly.
BaaS vs. In-House Infrastructure: Which Should You Choose?
There is no one-size-fits-all answer. The decision depends on how much control the company needs, how much it can invest, and how quickly it wants to bring the product to market.
Criterion | In-House Infrastructure | BaaS |
Upfront investment | Higher | Lower |
Implementation time | Longer | Shorter |
Control over operations | Greater | Shared with the provider |
Regulatory and operational responsibility | Greater | Part may remain with the provider, depending on the model |
Need for specialized staff | Greater | Lower |
Scalability | Depends on the infrastructure built | Can be facilitated by the provider |
Flexibility | Greater control over development | Depends on available services and APIs |
If the goal is to have control over every component and the company has the resources to build and maintain the operation, an in-house infrastructure may make sense.
On the other hand, if the priority is to launch financial services faster, reduce complexity, and focus resources on the core product, BaaS may be a more efficient alternative.
How BaaS Is Changing Financial Product Development
Banking as a Service allows companies to offer financial services without having to build the entire infrastructure themselves.
Through APIs, BaaS providers make resources available that can be incorporated into different products, such as accounts, payments, collections, and other financial services.
This changes the way new products can be built. Instead of spending months developing the entire foundation needed before launching a solution, companies can use components that are already available and focus their resources on what makes their product different.
For many companies, this is the main value of BaaS: turning financial infrastructure into a resource that can be integrated into the product rather than something that needs to be built from scratch.
Transfero provides financial infrastructure for companies looking to incorporate accounts, Pix, payments, collections, and other financial services into their own products. Talk to our sales team to find out how integrated infrastructure can support the launch and growth of your operation.
