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The Global Banking as a Service Market size is estimated to grow by USD 39.44 billion, at a CAGR of 20.65% between 2023 and 2028. One key market driver is the rising adoption of BaaS solutions by end-users seeking more convenient and accessible banking services. Another factor is the growing integration of digital technologies within banks, which is driving the need for more agile and flexible banking solutions. Banking as a service allows banks to use APIs that help them to share data with third-party financial institutions. Additionally, the increasing efficiency of financial services provided through BaaS models is attracting both consumers and financial institutions. These trends underscore the transformative potential of BaaS in reshaping the banking landscape and enhancing customer experiences.
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The BaaS market share growth by the banks segment will be significant during the forecast period. Increasing adoption of advanced financial technology in banks is one of the major drivers for the growth of the segment.
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The banks' segment was valued at USD 8.37 billion in 2018. As open banking becomes the norm, banking as a service provides new streams of revenue for banks. This service provides benefits, including cost-saving initiatives and increased customer insights. Such advantages of banking as a service are expected to increase its adoption in banks, which will drive the growth of the banks' segment in the market during the forecast period.
Banking-as-a-platform (BaaP) enables financial institutions to utilize the resources and expertise of a platform provider, reducing the burden of managing digital infrastructure. By adopting a platform business model, institutions can offer scalable and adaptable services, keeping up with internet-based banking. BaaP also allows for data tracking across products and services, providing valuable insights to institutions to focus their resources on the most in-demand services. The benefits of BaaP include reduced development time and cost, access to existing APIs, customized solutions, and enhanced revenue-sharing options, driving growth in the global platform segment.
North America is estimated to contribute 37% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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North America is expected to see growth in the market during the forecast period, thanks to the region's advanced technology adoption. Top investment banks, like Goldman Sachs, are investing in technology to improve their customer service through new apps and interfaces. Additionally, the growing number of FinTech startups in Silicon Valley will lead to an increase in lending and payment upgrades, as well as improved credit underwriting procedures using big data and analytics. These factors are expected to drive the demand for banking as service solutions in the FinTech industry, contributing to the growth of the market in North America.
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The market is rapidly evolving with the emergence of fintech businesses and newer fintech entrants challenging traditional incumbents. BaaS platforms enable licensed banks and nonbank organizations to offer a wide array of financial services through cloud-based BaaS solutions. This includes API-based BaaS, which integrates seamlessly into e-commerce, health, travel, retail, and telecom sectors. Artificial Intelligence plays a pivotal role in optimizing BaaS technology, enhancing services across the platform component segment and services segment. Large enterprises and small to medium enterprises segment benefit from the flexibility and scalability offered by BaaS, reducing operational overheads and enhancing customer experiences. As the demand for digital banking solutions grows, BaaS continues to redefine the landscape, leveraging technology to transform traditional paper-based processes into streamlined, efficient digital services.
Increasing adoption by end-users is a key driver in the market. Financial institutions can also access banking capabilities like lending, accounting, and corporate finance, providing better services to businesses. This is expected to drive demand for banking as a service during the forecast period. Non-banking financial companies (NBFCs) are also adopting banking as a service solution to offer core banking services, leading to a hassle-free customer experience.
Moreover, this is supported by financial services, digitalization, account opening, money lending, cost management dashboards, high costs of adoption, and banking institutions. With NBFCs offering bank accounts, digital wallets, lending, and payments, the use of banking as a service is increasing among various end-users, driving growth in the market.
Growing partnerships, collaborations, and agreements are a major trend in the BaaS market. On February 4, 2020, Bankable, the global architect of banking as a service solutions, announced a strategic collaboration with Visa in the US. Bankable aims to provide Visa US clients, including corporate and financial institutions, access to its real-time and modular banking solutions, enabling them to deploy digital banking and faster payment services. On November 25, 2021, Unit, the New York-based banking as a service, partnered with Currencycloud, the experts in simplifying business in a multi-currency world, to offer their customers an easy, seamless way to fulfill both domestic and international banking needs.
Likewise, on Jan-2022: Block.Inc acquired Afterpay, an Australian financial technology company. This acquisition aimed at allowing Block to better deliver compelling financial products as well as services which would expand access to more customers and help drive incremental revenue for sellers of all sizes. Thus, increasing partnerships, collaborations, and agreements is one of the growing trends that is expected to drive the growth of the global BaaS market during the forecast period.
Implementation and data security challenges are major factors hindering the market. Fintech companies new to banking as a service may be unaware of available product offerings, and they face implementation barriers such as legal and security concerns, lack of understanding of available products, and the need to onboard additional service providers.
Further, big data security and privacy are major concerns in the market due to the digitization of customer financial data. Many financial enterprises are concerned about their data being misused, making them skeptical about deploying this service for their operations. These challenges may hinder the growth of the global BaaS market during the forecast period.
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Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market. One of the major companies in the market include:
Movencorp Inc. - The company offers banking as a service solutions and services.
The market report also includes detailed analyses of the competitive landscape of the market and information about 20 market players, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified. Furthermore, it is also quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
The market is expanding rapidly, driven by shifts towards online banking and retail banking. Traditional paper-based processes are giving way to digital solutions offered by BaaS providers like First Sound Bank and Raisin Bank. Mondu and PoS systems integrate small business lending seamlessly through open banking frameworks and API platforms. Enterprises benefit from cloud computing and enterprise software platforms such as Fusion Kondor, enhancing liquidity and risk management capabilities. HSBC and FIS are prominent players leveraging API-driven connectivity for FX and fund transaction services. Licensed institutions are increasingly adopting BaaS for product innovation and operational efficiency. The Finatsra Survey underscores the growing adoption of BaaS across the financial sector, highlighting its pivotal role in transforming banking services. As the market evolves, BaaS continues to reshape financial ecosystems, offering agile, scalable solutions to meet diverse customer demands.
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Market Scope |
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Report Coverage |
Details |
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Page number |
153 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 20.65% |
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Market growth 2024-2028 |
USD 39.44 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
15.57 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 37% |
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Key countries |
US, China, Canada, France, and Germany |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
11:FS, Alkami Technology Inc., Banco Bilbao Vizcaya Argentaria SA, Block Inc., Bnkbl Ltd., ClearBank Ltd., CREALOGIX Holding AG, Currency Cloud Group Ltd., Finastra, Fiserv Inc., Green Dot Corp., MatchMove Pay Pte Ltd., Movencorp Inc., PayPal Holdings Inc., Q2 Holdings Inc., Societe Generale SA, Solarisbank AG, StoneCastle Digital Solutions LLC, Temenos AG, and Urban FT Group Inc. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Component
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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