Banking as a Service (BaaS) Market Size
| Study Period | 2020 - 2029 |
| Market Size (2024) | USD 5.32 Billion |
| Market Size (2029) | USD 14.72 Billion |
| CAGR (2024 - 2029) | 26.60 % |
| Fastest Growing Market | Asia-Pacific |
| Largest Market | North America |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Banking as a Service (BaaS) Market Analysis
The Banking As A Service Market size is estimated at USD 5.32 billion in 2024, and is expected to reach USD 14.72 billion by 2029, growing at a CAGR of 26.60% during the forecast period (2024-2029).
Banking as a Service Market (BaaS) enables various industries to develop new propositions with relevant financial services embedded into the customer experience. As a result, it became one of the most important strategic agendas for various businesses beyond banking. Currently, BaaS offerings are primarily focused on retail banking. Point-of-sale (PoS) financing is another area showing an exceptional growth rate with BaaS offerings. According to Finastra, BaaS will become more prevalent in small business lending, with BaaS revenue expected to grow 30% annually.
BaaS application provides endless opportunities, paving the route toward truly embedded finance. BaaS is transforming the financial services ecosystem. According to the Finatsra Survey of 50 senior executives, 85% of senior executives are already implementing BaaS solutions or planning to do so within the next 12-18 months. BaaS, founded on open banking frameworks, flourished in the wake of the COVID-19 outbreak. To enable the delivery of financial services at the point of consumer demand, it offers whole banking procedures (deposits, loans, and payments) as a service from specialized cloud-based API platforms. These platforms leverage the secure and regulated infrastructure of a licensed bank.
Banking as a Service (BaaS) Market Trends
Large Enterprises are Fueling the BaaS Market by Generating Majority Revenue
Large enterprises can access the best prices and features in a number of banks, enabling them to optimize their balance sheets and reduce costs as they scale up by using BaaS providers with large banking networks. A provider of BaaS capable of supporting global embedded finance solutions and expanding in the context of growing deposits is needed for large businesses with a global customer base. Partnerships with BaaS providers enable enterprises to offer a broad range of financial services. It includes payments, loans, and savings quickly and effectively while not having to install or keep the necessary infrastructure. It can attract and retain customers as well as create new sources of revenue. The addition of banking services to enterprise software platforms reduces time, power, and resources for customers, as well as improves customer satisfaction and loyalty. By improving access to a wider range of bank partners, global reach, diverse financing options and services, and enhanced customer experience, BaaS providers are able to help large enterprises. In order to enhance customer experience, companies in different sectors are looking at embedded financial solutions.
Asian Countries are Expected to Grow at the Fastest Rate
The growth of the banking as a service market in the Asia-Pacific is driven by growing urbanization and business demand for cloud computing. It is expected that the expansion of Asia-Pacific will be stimulated by a variety of initiatives undertaken around the world in support of BaaS. Indeed, in July 2022, Finastra announced that they would offer HSBC's foreign exchange (FX) to medium-sized banks of the Asia-Pacific region via their FusionFabric.cloud platform under a BaaS experience. The FX BaaS will allow participating banks to process higher FX volumes and differentiate themselves with various currency offerings while maintaining their customer relationships.
The first phase of the rollout will provide both indicative and executable FX rates to regional mid-tier banks via a plug-in to Finastra’s treasury trading system, Fusion Kondor. This solution allegedly incurs both low maintenance and ownership costs, backed by liquidity and risk management capabilities. The ability to integrate foreign exchange directly into corporate treasury systems, as well as competitive pricing and liquidity in a single arrangement, will contribute to reducing friction between regional banks and their customers while demonstrating the use case of BaaS for real impact.
The collaboration between the two entities will seek to take advantage of the best elements of modern API-driven connectivity with licensed institutions’ secure, regulated infrastructure. Integrating HSBC FX services with mid-tier banks will allow participating banks to deliver a wide range of currencies to their customers through branch networks and other retail channels without requiring any additional technology integration.
Banking as a Service (BaaS) Industry Overview
The Banking-as-a-Services market is moderately fragmented. Many companies compete for small market shares in the Banking-as-a-Service market. Businesses focus on diversifying their product offerings through product innovation to fulfill the growing demand. Moreover, with technological advancement and product innovation, domestic and international companies are increasing their market presence by securing new contracts and tapping new markets. In addition, the expansion of the Banking-as-a-Service (BaaS) industry is positively impacted by advancements in fund transaction services across the US and several emerging countries. For Instance, in October 2023, the financial technology behemoth FIS, which provides core banking, payment acceptance, and other services to banks and retailers worldwide, acquired BaaS provider Bond for an undisclosed amount. Following is a list of players that are operating in the market: Solaris SE, BNKBL Ltd, Treezor, Matchmove Pay Pte Ltd, Currency Cloud, etc.
Banking as a Service (BaaS) Market Leaders
-
Solaris SE
-
BNKBL Ltd
-
Treezor
-
Matchmove Pay Pte Ltd
-
Currency Cloud
*Disclaimer: Major Players sorted in no particular order
Banking as a Service (BaaS) Market News
- March 2023: ICICI Bank launched a range of digital solutions for capital market participants and clients of custody on Thursday. These solutions will help various participants in the market, including stock brokers, PMS providers, FPI, FDI, and AIF clients, to meet their banking needs.
- November 2022: Treasury Prime, a leading Banking-as-a-Service (BaaS) company, partnered with Plaid, the API-first data network powering the digital financial ecosystem. It is to deliver seamless integration between Treasury Prime-supported accounts and any external fintech available via the Plaid ecosystem.
Banking as a Service (BaaS) Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS AND INSIGHTS
4.1 Market Overview
4.2 Market Drivers
4.2.1 Growing Implementation of Open Banking
4.2.2 Digital Transformation in Financial Industry
4.3 Market Restraints
4.3.1 High-Risk Exposure for Baas Service Provider
4.3.2 Evolving and Complex Regulatory Landscape
4.4 Market Opportunities
4.4.1 The Development of Robust Application Programming Interface Ecosystems
4.4.2 BaaS Providers Can Offer White-Label Solutions
4.5 Industry Attractiveness - Porter's Five Forces Analysis
4.5.1 Bargaining Power of Suppliers
4.5.2 Bargaining Power of Buyers
4.5.3 Threat of New Entrants
4.5.4 Threat of Substitutes
4.5.5 Intensity of Competitive Rivalry
4.6 Value Chain Analysis For Banking-as-a-service Market
4.7 Insights on the Impact of Technology and Innovation In Banking as a Service Market
4.8 Insights on the Performance of Banking as a Service Providers Globally
4.9 Insights Into Regulatory Landscape Impacting the Market
4.10 Insights Into Consumer Behavior and Recent trends in the Market
4.11 Impact of COVID-19 on the Market
5. MARKET SEGMENTATION
5.1 By Enterprise
5.1.1 Large Enterprise
5.1.2 Small and Medium Enterprise
5.2 By End Users
5.2.1 Banks
5.2.2 Fintech Corporations
5.2.3 Other End Users
5.3 By Region
5.3.1 North America
5.3.1.1 United States
5.3.1.2 Canada
5.3.2 Europe
5.3.3 Asia-Pacific
5.3.4 Latin America
5.3.5 Middle East & Africa
6. COMPETITIVE LANDSCAPE
6.1 Market Concetration Overview
6.2 Company Profiles
6.2.1 Solaris SE
6.2.2 BNKBL Ltd.
6.2.3 Treezor
6.2.4 Matchmove Pay Pte Ltd
6.2.5 Currency Cloud
6.2.6 Clear Bank
6.2.7 Green Dot Corporation
6.2.8 Square Inc
6.2.9 Treasury Prime
6.2.10 Starling Bank
6.2.11 NymCard*
- *List Not Exhaustive
7. MARKET FUTURE TRENDS
8. DISCLAIMER AND ABOUT US
Banking as a Service (BaaS) Industry Segmentation
Banking as a Service Market (BaaS) enables various industries to develop new propositions with relevant financial services embedded into the customer experience. As a result, it became one of the most important strategic agendas for various businesses beyond banking.
The study gives a brief description of Banking as a Service (BAAS) and includes details on services provided by banks, small business lending, and digitalization. Banking as a Service (BaaS) market is segmented by enterprise, end users, and regions. By enterprise, the market is further segmented into large enterprises and small & medium enterprises. By end users, the market is further segmented into banks, fintech corporations, and others. Others include retailers, telecommunication companies, technology firms, insurance providers, and others operating in the non-financial space. By regions, the market is further segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. The report offers market size and forecasts for the BaaS market in value (USD) for all the above segments.
| By Enterprise | |
| Large Enterprise | |
| Small and Medium Enterprise |
| By End Users | |
| Banks | |
| Fintech Corporations | |
| Other End Users |
| By Region | ||||
| ||||
| Europe | ||||
| Asia-Pacific | ||||
| Latin America | ||||
| Middle East & Africa |
Banking as a Service (BaaS) Market Research FAQs
How big is the Banking As A Service Market?
The Banking As A Service Market size is expected to reach USD 5.32 billion in 2024 and grow at a CAGR of 26.60% to reach USD 14.72 billion by 2029.
What is the current Banking As A Service Market size?
In 2024, the Banking As A Service Market size is expected to reach USD 5.32 billion.
Who are the key players in Banking As A Service Market?
Solaris SE, BNKBL Ltd, Treezor, Matchmove Pay Pte Ltd and Currency Cloud are the major companies operating in the Banking As A Service Market.
Which is the fastest growing region in Banking As A Service Market?
Asia-Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Banking As A Service Market?
In 2024, the North America accounts for the largest market share in Banking As A Service Market.
What years does this Banking As A Service Market cover, and what was the market size in 2023?
In 2023, the Banking As A Service Market size was estimated at USD 3.90 billion. The report covers the Banking As A Service Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the Banking As A Service Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
What are the key factors driving the growth of the Banking-as-a-Service (BaaS) Market?
The key factors driving the growth of the Banking-as-a-Service (BaaS) Market are a) Rising Adoption of Digital Banking Services b) Advancements in fund transaction services in several developing countries
BaaS Industry Report
The global Banking-as-a-Service (BaaS) market is witnessing significant growth, driven by factors such as rising demand for financial services, rapid digitalization, and the availability of Application Programming Interfaces (APIs). The increasing popularity of online banking is further propelling the market, as consumer preferences shift towards digital platforms for services like cash transfers, account statements, and online purchases. BaaS platforms, a key element of open banking, are enabling banks to make their APIs available to outside developers, leading to the creation of new services and offering account holders more options for financial transparency. This is revolutionizing retail banking and changing how incumbents and customers interact. However, the high cost associated with the adoption of BaaS technology and increased cyberattacks on personal banking data may pose challenges to industry growth. Despite these hurdles, the integration of Artificial Intelligence (AI) in the BaaS platform is creating a positive market outlook. The market, segmented by component, product type, enterprise size, and end-use, is dominated by the platform component and large enterprise segments. Significant growth is being observed in regions such as North America and Europe, with Asia Pacific expected to register the fastest growth rate. Statistics for the Banking-as-a-Service (BaaS) market share, size, and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Banking as a Service analysis includes a market forecast outlook and historical overview. Get a sample of this industry analysis as a free report PDF download.
