Banking-as-a-Service Market Size - By Component (Platform, Services), Type (API-based Banking-as-a-Service, Cloud-based Banking-as-a-Service), Enterprise Size (Large Enterprises, Small & Medium Enterprises), End Use (Banks, NBFC, Others) & Forecast, 2024 - 2032
Published Date: March - 2025 | Publisher: MIR | No of Pages: 240 | Industry: Media and IT | Format: Report available in PDF / Excel Format
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Banking-as-a-Service Market size was worth USD 15.9 billion in 2023 and is anticipated to achieve a CAGR of more than 17% during 2024-2032. The growing fintech sector is strongly driving the market growth by encouraging innovations & competition. Fintech firms are developing agile & customer-focused financial solutions that traditional banks are trying to adopt through BaaS collaborations.
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India's fintech market is predicted to be valued at USD 150 billion in 2025 by the India Brand Equity Foundation. India's FinTech ecosystem ranks third globally in size. India also features as one of the world's fastest-growing markets. As of today, more than 2,000 Financial Technology (FinTech) enterprises are recognized by the DPIIT in India and the count is increasing very quickly.
| Report Attribute | Details |
|---|---|
| Base Year | 2023 |
| Banking-as-a-Service Market Size in 2023 | USD 15.9 Billion |
| Forecast Period | 2024 to 2032 |
| Forecast Period 2024 to 2032 CAGR | 17% |
| 2032 Value Projection | USD 64.7 Billion |
| Historical Data for | 2018 - 2023 |
| No. of Pages | 250 |
| Tables, Charts & Figures | 338 |
| Segments covered | Component, type, enterprise size, and end use |
| Growth Drivers |
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| Pitfalls & Challenges |
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What are the growth opportunities in this market?
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The growth of digital banking services is fueling the banking-as-a-service (BaaS) market expansion. The increasing popularity of digital banking has led conventional banks to collaborate with BaaS providers to remain competitive in the digital market. BaaS allows these banks to integrate sophisticated digital features & services into their portfolios at a faster rate, thus improving customer experience as well as addressing the expanding need for online & mobile banking solutions.
For example, in October 2023, PoetrYY Finance joined the financial sector with an aim to transform banking services for underbanked populations, startups, small businesses, and individuals. By partnering with Mbanq's innovative banking-as-a-service (BaaS) platforms, PoetrYY will deliver innovative, secure, and inclusive financial products.
Data security and privacy issues are major concerns in the banking-as-a-service sector. With the sharing of sensitive financial information among traditional banks, third-party providers, and consumers, security measures and regulatory compliances must be strong to avoid breaches and unauthorized access. Financial frauds, identity thefts, and loss of trust can be caused by it. BaaS providers have to spend a lot on cybersecurity infrastructure and comply with the strict data protection laws to counter these risks since one security breach can have serious repercussions, not just for the concerned parties but also for the overall BaaS ecosystem.
COVID-19 Impact
The COVID-19 pandemic hastened the growth of digital banking and banking-as-a-service (BaaS) solutions. Lockdowns and social distancing pushed traditional banks to quickly adopt digital platforms to cater to their customers remotely. BaaS providers provided the infrastructure and expertise needed, thus making it easier for the transition. The COVID-19 pandemic exposed the need for resilient and agile banking systems, which prompted more financial institutions to resort to BaaS solutions to upgrade their digital capabilities and respond to the evolving customer needs.
Banking-as-a-Service Market Trends
Cloud computing is a new paradigm in the banking-as-a-service (BaaS) market based on its cost-effectiveness, scalability, and flexibility. By moving mission-critical bank operations to the cloud, BaaS vendors and traditional banks can save on infrastructure, make their processes more efficient, and enhance accessibility. Cloud computing also supports real-time processing of data, thus enabling quicker and more efficient financial transactions. This trend is transforming the sector as banks are increasingly using the cloud to upgrade their BaaS capabilities; this is allowing them to respond to the evolving market dynamics as well as provide innovative & on-demand financial solutions.
Open banking is a major trend in the BaaS sector as it encourages collaborations and competition. It allows traditional banks to share customer data securely with third-party financial service providers via APIs, thus triggering innovations. For example, in October 2023, Apple launched Connected Cards in the UK, using the Open Banking API. This iOS 17.1 developer beta feature permits users to see account balances and the transaction history for eligible banks, improving the Wallet app's functionality.
This trend is equipping consumers with varied & personalized financial solutions, urging BaaS providers to present services that reflect the principles of open banking. Increasing regulatory backing for open banking is propelling the use of BaaS solutions, revolutionizing the banking sector to be customer-focussed, interconnected, & innovative.
Banking-as-a-Service Market Analysis
Discover more about the major segments defining this market
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By component, the platform segment accounted for more than 70% of the market share in 2023, as financial institutions are increasingly dependent on the technology platforms of BaaS providers. The platforms provide a complete set of services such as data access, processing, and security. They allow banks to quickly grow their digital offerings and access the emerging markets. With the need for agile & scalable solutions, the platform segment is poised to grow as BaaS becomes the backbone for banks to increase their digital footprint, drive operations, and achieve the changing customer expectations.
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Based on type, the cloud-based banking-as-a-service market recorded 72% of the revenue share in 2023, owing to the fact that financial institutions are seeking scalable, cost-effective, and flexible solutions. Cloud-based BaaS offers on-demand access to banking infrastructure, enabling banks to streamline operations and deploy innovative services rapidly. Cloud-based BaaS solutions can effectively meet the rising demand for digital banking, real-time transactions, and remote access.
Banks are embracing cloud technology to enhance their digital transformation efforts, allowing financial institutions to stay competitive and deliver customer-centric & technology-driven solutions. For instance, in February 2023, Oracle, a cloud technology company based in the U.S., launched Oracle Banking Cloud Services, a collection of modular & cloud-native services designed to provide a flexible & component-based approach to banking technology solutions.
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North America banking-as-a-service market accounted for 32% of the revenue share in 2023. The region's financial industry, coupled with a strong focus on fintech innovations, is driving product adoption. Regulatory support and a tech-savvy consumer base are fostering the development of BaaS partnerships & services. Additionally, the increasing need for digital banking solutions and the presence of key BaaS providers in the region are propelling market growth.
As North American banks continue to embrace BaaS to enhance their offerings and remain competitive, the market will expand substantially. For instance, in September 2023, the U.S. Bank introduced banking & payment services that have been tailored for smaller medical practices, thereby aiming to provide them with the same financial support and resources enjoyed by larger healthcare providers.
Banking-as-a-Service Market Share
Green Dot and Solarisbank AG are the major players in the banking-as-a-service (BaaS) industry due to their expertise and comprehensive BaaS offerings. Green Dot, a leading fintech company, provides a wide range of banking services and financial products to various businesses, thereby enhancing their capabilities to offer digital banking solutions. Solarisbank, a company based in Germany, offers a BaaS platform for businesses to integrate banking functions into their services.
Banking-as-a-Service Market Companies
The major companies operating in the banking-as-a-service (BaaS) industry are
- Green Dot
- Solarisbank AG
- ClearBank Ltd.
- Plaid
- Galileo Financial Technologies
- Marqeta
- Railsbank
- Square, Inc.
- Banco Bilbao Vizcaya Argentaria
- MatchMove Pay Pte Ltd
Banking-as-a-Service Industry News
- In October 2023, Hitachi Payment Services, a company based in India, launched the HPX program to establish long-term partnerships with fintech startups. The program aims to transform the payments industry by supporting innovative solutions that enhance the payment experiences for businesses and consumers, thereby emphasizing enduring collaborations.
The banking-as-a-service (BaaS) market research report includes in-depth coverage of the industry, with estimates & forecast in terms of revenue (USD billion) from 2018 to 2032, for the following segments
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Market, By Component
- Platform
- Services
Market, By Type
- API-based Banking-as-a-Service (BaaS)
- Cloud-based Banking-as-a-Service (BaaS)
Market, By Enterprise Size
- Large enterprises
- Small & medium enterprises
Market, By End Use
- Banks
- NBFC
- Others
The above information has been provided for the following regions and countries
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Russia
- Nordics
- Asia Pacific
- China
- India
- Japan
- South Korea
- ANZ
- Southeast Asia
- Latin America
- Brazil
- Mexico
- Argentina
- MEA
- Saudi Arabia
- UAE
- South Africa
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