Its placement in higher taxa is controversial, with it mostly being considered to be a member of the enigmatic phylum Vetulicolia.

While the body plan (equal anterior and posterior sections with segmentation) resembles that of the Vetulicolians, it is argued that the absence of gills and an endostyle, and the presence of gut diverticula makes Banffia unlikely to be a member of the deuterostomes.

However, an apparent complete lack of appendages (aside from the antenna-like structures) makes B. constricta's placement within Arthropoda equally unlikely.

More recent finds of similarly shaped animals show structures thought to be a notochord, making Banffia and their relatives chordates, possibly the sister group to tunicates.

[5] The species Banffia confusa, known from fossils from the Chengjiang shales, was originally assigned to this genus,[6] though, recent research shows that this species is not closely related to B. constricta, having been renamed as its junior synonym, Heteromorphus longicaudatus, and placed in a different class altogether, "Heteromorphida.