Imagine this: Think of an API as a waiter in a restaurant. You decide to order a plate of classic Fish & Chips and a pint of ice cold beer to go along. The kitchen is the provider who will prepare your mouth-watering meal. The waiter (or API) is the one that communicates your order (request) to the kitchen (provider) and then delivers the food (response) back to you. If you are a more visual learner, check out this video!
An excellent example of BaaS is Fidor Bank, an online bank in Germany. Fidor provides a white label cloud banking solution through APIs. It provides public APIs that can be used modularly. This enables clients to rapidly connect to the bank’s cloud system called fidorOS. The image below illustrates some of the APIs available. As such, non-banks can make use of the bank’s platform to deliver banking services. For example, Telefónica Germany will be partnering Fidor Bank to launch its mobile banking offering called O2 Banking with the help of these APIs. This will give O2 mobile contract customers access to banking services like transferring money via their mobile number.