The market for global banking-as-a-service (BaaS) platforms was worth $3,240.6 million in 2022. The market is anticipated to be worth US$ 3,713.7 million as of 2023 and US$ 16,715.3 million by the end of the forecast period. A CAGR of 16.2% is anticipated for the market on banking-as-a-service platforms from 2023 to 2033.
The survey also predicts that by the end of 2021, the market would be worth more than US$ 2.8 billion. According to FMI, the availability of application programming interfaces (APIs) and the rapid evolution of technology have opened up opportunities for platforms that offer banking as a service (BaaS). These technologies are now crucial for enhancing economic competitiveness, which fuels market expansion.
BaaS has arisen over the past few years as a fresh and inventive method for banks and third parties to work together to offer clients digital-only banking products and services as well as improved customer experiences. BaaS has significantly improved collaboration between banks and third parties and benefits both established participants in the financial services sector and newcomers.
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Customers now have better digital experiences because to increasing innovation brought on by growing competition in the banking industry. When it comes to the financial services and products they utilize, customers have more options than ever before.
Key Takeaways: Banking-as-a-Service (BaaS) Platform Market
- By solution, the banking-as-a-service platform segment is anticipated to account for the leading share in the global demand for banking-as-a-service (BaaS) platforms during the forecast period. However, the banking as a service APIs segment is estimated to grow at a robust CAGR of 17.1% through 2031.
- By enterprise size, the integration of BaaS platforms in small & mid-sized organizations is anticipated to increase at a CAGR of 16.6% between 2021 & 2031, while large organizations are currently dominating the market share.
- The adoption of banking-as-a-service (BaaS) platforms by fintech corporations is expected to rise at a maximum pace. As per FMI, demand in this segment will increase by a CAGR of 18.2% between 2021 and 2031.
- Europe is expected to lead the market followed by North America in 2021. South Asia & Pacific is anticipated to emerge as the fastest growing region between 2021 & 2031.
- The market in Japan is expected to progress at a CAGR of 17.9% through 2031.
- In the U.K., sales are expected to increase at a CAGR of close to 16% over the next ten years.
COVID-19 Impact Analysis on Banking-as-a-Service (BaaS) Platform Market
The outbreak of COVID-19 has led to more usage of banking components because remote working and social distancing have helped digital banking gain a huge customer base. COVID-19 has been a defining moment for digital transformation, as financial institutions that invested strategically & financially in the digitalization process over the past decade, have been better prepared to navigate these shifts and respond to the crisis.
The market has witnessed significant growth previously, but due to the unexpected COVID-19 outbreak, the market will witness additional growth in 2020, owing to the rising demand for seamless banking transactions. This growth will be majorly driven by changing customer behavior and increasing the focus of the people from visiting bank branches to online access of bank services.
Hence, the implementation of the banking-as-a-service (BaaS) platform would be highly valuable during the COVID-19 period due to several factors such as the rising use of electronic transactions amid pandemic crises, and to enable stress-free banking activities.
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Rapid Shift towards Embedded Finance
More and more nonbank companies are offering financial services, such as bank accounts or wallets, payments, and lending. Today, companies of all types and levels of maturity—including retailers, telcos, big techs and software companies, car manufacturers, insurance providers, and logistics firms—are considering and preparing to launch embedded financial services to serve business and consumer segments.
To meet the rising demand for embedded finance, financial institutions are increasingly offering banking as a service (BaaS)—bundled offerings, often white-labeled or cobranded services that nonbanks can use to serve their customers. With the acceleration of digitization, including automation and APIs, banks can scale BaaS faster, putting embedded finance within reach for more companies considering it. This is further estimated to fuel up the banking-as-a-service (BaaS) platform market growth prospects in the near future.
Banking-as-a-Service (BaaS) Platform Outlook by Category
By Solution:
- Banking as a Service Platform
- Banking as a Service APIs
- Services
- Payment Processing Services
- Digital Banking Services
- KYC Services
- Customer Support Services
- Others
By Enterprise Size:
- Small & Mid-sized Organizations
- Large Organizations
By End User:
- Banks
- FinTech Corporations
- Investment Firms
- Others
By Region:
- North America
- Latin America
- Europe
- East Asia
- South Asia & Pacific
- Middle East and Africa (MEA)
Table of Content
1. Executive Summary
1.1. Global Market Outlook
1.2. Demand-side Trends
1.3. Supply-side Trends
1.4. Technology Roadmap Analysis
1.5. Analysis and Recommendations
2. Market Overview
2.1. Market Coverage / Taxonomy
2.2. Market Definition / Scope / Limitations
3. Market Background
3.1. Market Dynamics
3.1.1. Drivers
3.1.2. Restraints
3.1.3. Opportunity
3.1.4. Trends
3.2. Scenario Forecast
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