Fintech as a Service (FaaS) Market Size – By Service Type (Banking, Investment, Insurance, Payments & Remittances, Lending & Financing), By Technology (AI & ML, Blockchain, APIs, Cloud Computing), Application, End Use & Global Forecast 2023 – 2032

Fintech as a Service (FaaS) Market Size – By Service Type (Banking, Investment, Insurance, Payments & Remittances, Lending & Financing), By Technology (AI & ML, Blockchain, APIs, Cloud Computing), Application, End Use & Global Forecast 2023 – 2032

Fintech as a Service Market Size

Fintech as a Service Market size valued at USD 260.7 billion in 2022 and is anticipated to grow at a CAGR of 14% between 2023 and 2032. AI & Blockchain technology growth is shaping the growth trajectory of the market. These pioneering technologies are driving innovations and expansion within the market. Furthermore, the growing demand for compliance and regulatory solutions has accelerated the adoption of FaaS solutions, which provide organizations with the knowhow and support needed to mitigate & manage the risks pertaining to compliance process. 

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The growing demand for digital financial services as well as the shift toward online & mobile banking has created opportunities for businesses to improve their product offerings through fintech solutions. Additionally, traditional financial institutions, such as banks & insurance companies, with the aid of FaaS can now quickly adopt digital technologies and provide a more streamlined & convenient customer experience.

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The FaaS market refers to the industry that provides financial technology solutions and services to other businesses, typically through Application Programming Interfaces (APIs) or cloud-based platforms. FaaS enables businesses to leverage the capabilities of fintech companies without the need for significant investments in developing their own technology infrastructure. It enables businesses to seamlessly integrate fintech solutions into their existing systems and offer innovative financial services to customers.

Fintech-as-a-service platforms handle extremely large sums of money. The involvement of significant monetary transactions can lead to end users being extremely cautious in adopting FaaS systems due to security concerns. The prevalent skepticism about FaaS solutions will hinder the global fintech as a service market expansion. FaaS solutions are intended to meet the requirements of financial institutions and handle monetary transactions. To achieve higher levels of trust, they must adhere to diverse laws that have been implemented for financial or other related institutes. Each country's government has its own set of compliance regulations, which may differ greatly from one another. The difficulty arises when U.S. firms seek to expand their operations in other countries or when international transactions are involved.

COVID-19 Impact

COVID-19 had positive impacts on global market capitalization, fueled by government regulations stipulated to maintain social distancing. The shutting of physical branches of banks and financial institutions during lockdown periods increased the adoption of digitization across various segments of banking & financial institutions. The FaaS adoption rate was observed to be higher in 2020 and 2021 due to stringent regulations restricting transportation and movement.

Fintech as a Service Market Trends

Startups and non-financial firms, such as e-commerce platforms & ride-sharing services, are gradually entering the financial services sector. These businesses frequently lack the expertise and infrastructure needed to create financial technology solutions. They can use FaaS to leverage a wide range of fintech capabilities, such as payment processing, lending, identity verification, and risk management, allowing them to focus on their core business while providing financial services to their customers. Furthermore, regulatory changes and open banking initiatives in several countries have encouraged collaborations between fintech firms & traditional financial institutions. FaaS facilitates this collaboration by providing a platform that enables seamless integration and data sharing while ensuring regulatory compliance.
 

Fintech as a Service Market Analysis

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The fintech as a service market size from blockchain segment is expected to exceed USD 260 billion by 2032. Blockchain technology is becoming increasingly popular, particularly among large corporations. Several large corporations are attempting to implement blockchain due to its increased transparency and automation benefits. Financial institutions are embracing this technology to increase security and efficiency. Blockchain technology empowers users to be sole owners of their wealth, ensuring that only they have access to their wealth. This will provide added security to both financial institutions & end users, driving segment growth.

The payments & remittances segment held over 45% of the fintech as a service market share in 2022. Payments are essential to financial transactions, and the capability to send & receive payments is vital for businesses and individuals. Payment processing, mobile wallets, peer-to-peer transfers, and mobile payments are all integral the payment segment. The rapid expansion of e-commerce and the increasing digitization of financial transactions have increased the demand for payment services. Businesses and consumers are increasingly accepting online and mobile payments.

Fintech firms have introduced innovative payment solutions that have disrupted the traditional methods. These game-changing solutions provide better user experiences, faster transactions, lower costs, and enhanced security. Payment services have a global market reach as businesses and individuals all over the world conduct cross-border transactions. Payment solution providers can cater to customers worldwide, increasing their market size and revenue potential.

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Financial institutions are increasingly leveraging fintech as a service solution for compliance and regulatory support to reduce the cost & complexity of compliance. As the regulatory environment becomes more complex, financial institutions will strive to improve their compliance posture, driving FaaS solution demand in the market.

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North America Fintech as a Service (FaaS) market accounted for 40% of revenue share in 2022. North America has witnessed a significant shift toward digital banking and online financial services. Customers are increasingly embracing digital channels for their banking needs, and financial institutions are looking for agile & technology-driven solutions to meet these evolving customer expectations. FaaS provides ready-to-use, cloud-based platforms and APIs that enable financial institutions to quickly deploy & offer digital banking services.

Fintech as a Service Market Share

Some of the major companies operating in the Fintech as a Service market are

• Adyen
• Block
• Dwolla
• Envestnet
• Finastra
• FIS
• Fiserv
• Mastercard
• OpenPayd
• Paypal

These companies are focused on strategic partnerships and new service launches & commercialization for market expansion. They are heavily investing in research to introduce innovative services and garner maximum market revenue.

Fintech as a Service Industry News

• In May 2023, Rapyd announced a strategic alliance with Belvo. This collaboration combines Rapyd's extensive international payment infrastructure with Belvo's extensive knowledge & expertise in open banking, resulting in a powerful synergy that opens new business opportunities globally.
   
• In April 2023, Square launched Tap to Pay on Android for sellers in the U.S., Australia, Ireland, France, Spain, and the UK. With a compatible Android device and no additional cost, the new technology allows sellers to securely accept contactless payments. Square's Tap to Pay on Android makes it easier for new sellers & established businesses to conduct in-person commerce where the seller simply opens the app, enters the sale, and hands over the smartphone to the customer.

The fintech as a service (FaaS) market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Million) from 2018 to 2032, for the following segments

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Market, By Service Type

• Banking
• Investment
• Insurance
• Payments & remittances
• Lending & financing
• Others

Market, By Technology

• Artificial Intelligence (AI) & Machine Learning (ML)
• Blockchain
• Application Programming Interfaces (APIs)
• Cloud Computing
• Others

Market, By Application

• Mobile Banking
• Peer-to-Peer (P2P) Lending
• Regulatory compliance & risk management
• Others

Market, By End Use

• Financial Institutions
• Non-Financial Institutions

The above information has been provided for the following regions and countries

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Netherlands
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea 
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • Saudi Arabia
  • South Africa

Frequently Asked Questions (FAQ)

What is the size of fintech as a service (FaaS) market?

The market size of fintech as a service was reached USD 260.7 billion in 2022 and is set to expand at a CAGR of 14% between 2023 and 2032. AI & Blockchain technology advancements are shaping the growth trajectory of the market.

How will blockchain technology segment contributing to FaaS industry growth?

The blockchain segment is expected to be valued at USD 260 billion in 2032. Several large corporations are attempting to implement blockchain due to its increased transparency and automation benefits.

Why is North America emerging as a lucrative avenue for fintech as a service market players?

North America market held over 40% of the revenue share in 2022, as the region has witnessed a significant shift toward digital banking and online financial services.

Who are the major contenders in Fintech as a Service (FaaS) landscape?

Adyen, Block, Dwolla, Envestnet, Finastra, FIS, Fiserv, Mastercard, OpenPayd, and Paypal.