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It\u2019s been a roller-coaster<\/span> ride for the banking-as-a-service sector over the last year, with a host of mergers and acquisitions and layoffs. On the other hand, large companies are eagerly adopting the concept to get competitive advantages and to drive value for customers.<\/p>\n BaaS can refer to three different parts of the industry: One is the classic of offering bank-like services to other players in the industry, a second is providing the charter and bank services but not doing the underwriting, and a third is banking components, which is more of a fintech, that isn\u2019t a bank, providing bank-like services without a charter.<\/p>\n \u201cI believe [banking-as-a-service] is a potentially phenomenal growth space for banks to go after,\u201d Accenture\u2019s global banking lead, Michael Abbott, told TechCrunch+. \u201cThere\u2019s already tried-and-true models out there, like private label and co-branding. You\u2019re providing that banking capability, consumer lending and credit card portfolios to consumers, small businesses and increasingly at the corporate level.\u201d<\/p>\n And it is a big market. Banking-as-a-service is expected to grow 15% each year to be valued at nearly $66 billion<\/a> by 2030. Companies continue to attract venture capital, too. This year, Treasury Prime secured $40 million<\/a> in Series C funding and Synctera raised $15 million<\/a> to launch embedded products in Canada. Meanwhile, Omnio raised $9.8 million<\/a>, and U.K.-based bank Griffin raised $13.5 million<\/a> in June.<\/p>\n But it hasn\u2019t all been rosy. Synapse and Figure Technologies were among the first to hold layoffs; Synapse laid off 18%<\/a> of its employees in June, and Figure Technologies, which includes Figure Pay, laid off 90 people<\/a> \u2014 or about 20% of its workforce \u2014 in July.<\/p>\n BaaS involves a lot of facets and can be quite confusing, so to make sense of what\u2019s going on, we sat down with people representing BaaS companies, fintech experts and investors to chat about the sector and where it goes from here.<\/p>\n While BaaS companies were the recipient of aggressive venture capital infusions in 2020 and 2021, in the last six to 12 months, there was \u201ca recognition or a rationalization of those investments,\u201d Synctera CEO Peter Hazlehurst told TechCrunch+.<\/p>\n Around two dozen companies in this sector were funded during those two years, and perhaps a half dozen are still operating today. So how did that happen? According to Hazlehurst, the answer is pretty simple. \u201cThey used venture dollars to make irresistible deals to customers to get usage,\u201d he said. \u201cTwelve months ago, we were losing deals because we wouldn\u2019t sign someone up for free. The challenge was the actual market price of that transaction was underwater.\u201d<\/p>\n<\/p><\/div>\nThe struggles<\/h2>\n