Global Banking As-A-Service (BaaS) Market Size By Type (Cloud-based Bank-As-A-Service, API-based Bank-As-A-Service), By Enterprise Size (Large Enterprises, SMEs), By End-User (Banks, Fintech Corporations), By Geographic Scope And Forecast
Global Banking As-A-Service (BaaS) Market Size By Type (Cloud-based Bank-As-A-Service, API-based Bank-As-A-Service), By Enterprise Size (Large Enterprises, SMEs), By End-User (Banks, Fintech Corporations), By Geographic Scope And Forecast
Published Date: August - 2024 | Publisher: MIR | No of Pages: 320 | Industry: latest updates trending Report | Format: Report available in PDF / Excel Format
Global Banking As-A-Service (BaaS) Market Size By Type (Cloud-based Bank-As-A-Service, API-based Bank-As-A-Service), By Enterprise Size (Large Enterprises, SMEs), By End-User (Banks, Fintech Corporations), By Geographic Scope And Forecast
Banking As-A-Service (BaaS) Market Size And Forecast
Banking As-A-Service (BaaS) Market size was valued at USD 827.42 Million in 2023 and is projected to reach USD 3,976.77 Million by 2031, growing at a CAGR of 25.14% during the forecast period 2024-2031.
Expanding demand for consumer centric digital financial services and growing presence of fintech companies are the factors driving the market growth. The Global Banking As-A-Service (BaaS) Market report provides a holistic evaluation of the market. The report offers a comprehensive analysis of key segments, trends, drivers, restraints, competitive landscape, and factors that are playing a substantial role in the market.
Global Banking As-A-Service (BaaS) Market Executive Summary
Banks and financial institutions are progressively adopting digital transformation to improve customer experience, save operating costs, and maintain competitiveness. BaaS suppliers provide scalable, cloud-based solutions that help conventional banks upgrade their infrastructure, deploy digital goods and services more quickly, and reach new consumer groups. The growth of fintech companies and non-bank financial institutions is driving demand for BaaS solutions. These organizations cannot frequently construct their banking infrastructure; therefore, they rely on BaaS providers for fundamental banking features, compliance capabilities, and payment processing services. The Global Banking As-A-Service (BaaS) market is segmented into Type, Enterprise Size, and End-User. By Type, the Global Banking As-A-Service (BaaS) market is divided into Cloud-based Bank-as-a-Service and API-based Bank-as-a-Service. Based on Enterprise Size market is divided into Large Enterprises and SMEs. Furthermore, Based on End-User, the market is divided into Banks, Fintech Corporations, and Others.
The Global Banking As-A-Service (BaaS) Market is witnessing significant growth owing to various driving factors such as expanding demand for consumer-centric digital financial services, the growing presence of fintech companies, and others. However, the high cost of adopting the BaaS platform and the hesitation of incumbent traditional banks might strangle the growth of the Global Banking As-A-Service (BaaS) Market over the forecasted period. Moreover, the rising market for the embedded finance industry and other factors are creating new opportunities for the Global Banking As-A-Service (BaaS) Market to grow soon. The market size of the Global Banking As-A-Service (BaaS) Market stood at USD 657.90 Billion in 2023 and is projected to reach USD 3,976.77 Billion by 2031. The Market is projected to grow at a CAGR of 25.14%. Europe holds the largest market share in 2023, accounting for 36.74% of the total market size. North America holds the second-largest share, with 31.90%. However, Asia Pacific is projected to grow with the highest CAGR of 28.20% during the forecast period.
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Global Banking As-A-Service (BaaS) MarketSegmentation Analysis
The Global Banking As-A-Service (BaaS) Market is Segmented on the basis of Type, Enterprise Size, End-User, and Geography.
Banking As-A-Service (BaaS) Market, By Type
Cloud-based Bank-as-a-Service
API-based Bank-as-a-Service
To Get a Summarized Market Report By Type-
Based on Type, the Global Banking As-A-Service (BaaS) Market has been segmented into Cloud-based Bank-as-a-Service, and API-based Bank-as-a-Service. Cloud-based Bank-as-a-Service accounted for the largest market share by 2023 and is projected to grow at the highest CAGR of 58.75% during the forecast period. And the API-based Bank-as-a-Service segment is anticipated to account for the second-largest market share.
Cloud banking is the on-demand provision of hosted computer services (servers, data storage, networking, communication, apps, and analytics) to banking as a service industry. Banking-as-a-Service (BaaS) platform hosted in the cloud to profit from investments in regulated banking ecosystems. Using Application Protocol Interfaces (APIs), cloud-based platforms enable the one-click economy by seamlessly connecting core banking with non-financial activities. By integrating financial services with non-financial products, it promotes organic growth.
Banking As-A-Service (BaaS) Market, By Enterprise Size
Large Enterprises
SMEs
To Get a Summarized Market Report By Enterprise Size-
Based on Enterprise Size, the Global Banking As-A-Service (BaaS) Market has been segmented into Large Enterprises, and SMEs. Large Enterprises accounted for the largest market share by 2023 and is projected to grow at the highest CAGR of 23.33% during the forecast period. And the SMEs segment is anticipated to account for the second-largest market share.
The adoption of banking as a service can prove to be extremely beneficial for these large enterprises. It enables the integration of financial products into digital brands and creates better customer experiences. Large enterprises typically consist of over a thousand employees and generally have a wider scope of company locations. In addition, they have a large and loyal customer base, a strong brand reputation, and the capability to fund their activities with a low cost of capital. The large consumer base provides large quantities of customer data which can be useful to analyze and design new services in banking at a lower cost and high volume.
Banking As-A-Service (BaaS) Market, By End-User
Banks
Fintech Corporations
Others
Based on End-User, the Global Banking As-A-Service (BaaS) Market has been segmented into Banks, Fintech Corporations, and Others. Banks accounted for the largest market share in 2023 and is projected to grow at a CAGR of 27.46% during the forecast period. Fintech Corporations was the second-largest market in 2023.
Financial technology has become a catalyst for intensifying competition in the banking industry. Neo-banks are winning market share by serving customers at around one-third of the cost of incumbents. In itself, added cost-efficiency is excellent but not ground-breaking, as IT expenses make up only 6-8 percent of an average bank’s revenue. It is the capabilities of modern core banking systems that enable newcomers to disrupt stagnating markets and create value by rapid onboarding and retaining customers. Instant transfers, currency exchange at live market rates, unlimited accounts, card-to-card payments, and many other significant features foster loyalty in a competitive market.
Banking As-A-Service (BaaS) Market, By Geography
North America
Europe
Asia Pacific
Latin America
Middle East and Africa
On the basis of Regional Analysis, the market has been segmented into North America, Europe, Asia Pacific, Latin America, and Middle East and Africa. Europe accounted for the largest market share in 2023.
The European banking industry has witnessed losses and revenue fluctuations over the past few years. Lower interest rates and increased credit losses resulting in declining profit margins are some of the significant factors. The COVID-19 pandemic has further aggravated the situation with the European Central Bank (ECB) and can impact banks’ minimum regulatory capital levels. Economic and revenue slowdown has turned the bank’s focus towards cost efficiency, better risk management, and building a resource-light digital platform for servicing customers. It has augmented the demand to scale up technology investments within the banks. Many banks are now turning towards digitalizing their process and adopting bank as a service model. Large banks, commonly known as High Street Banks, work with FinTechs, while some invest in their digital version.
Key Players
The Global Banking As-A-Service (BaaS) Market is highly fragmented with the presence of a large number of players in the Market. The major players in the market are, SolarisBank (Solaris SE), Sqaure, PayPal, Fidor Bank (Groupe BPCE), Moven, Prosper, Matchmove Pay Pte Ltd Source, TREEZOR (SOCIETE GENERALE GROUP), OANDA, and Currency Cloud. This section provides company overview, ranking analysis, company regional and industry footprint, and ACE Matrix.
Company Market Ranking Analysis
The company ranking analysis provides a deeper understanding of the top 5 players operating Global Banking As-A-Service (BaaS) market. takes into consideration several factors before providing a company ranking. The top players for the include PayPal, Sqaure, Inc., TREEZOR (SOCIETE GENERALE GROUP), Fidor Bank (Groupe BPCE), and SolarisBank (Solaris SE). The factors considered for evaluating these players include company’s brand value, Type portfolio (including Type variations, specifications, features and price), company presence across major regions, Type related sales obtained by the company in recent years and its share in the total revenue. further study the company’s Type portfolio based on the technologies adopted or new strategies undertaken by the company to enhance their market presence globally or regionally. We also consider the distribution network (online as well as offline) of the company that helps us to understand the company’s presence and foothold in various Global Banking As-A-Service (BaaS) market.
Company Regional/Industry Footprint
The company’s regional section provides geographical presence, regional level reach, or the respective company’s sales network presence. For instance, include PayPal has its presence globally.
Apart from this, the industrial footprint section provides a cross-analysis of industry verticals and market players that gives a clear picture of the company landscape concerning the industries they serve their Type. The Type portfolio of the companies is classified in terms of their diversification as well as the number of Types that are available. The geographic reach and the market penetration are determined considering the penetration of the company’s Types and services in various geographical regions and industries.
Ace Matrix
This section of the report provides an overview of the company evaluation scenario in the Global Banking As-A-Service (BaaS) market. The company evaluation has been carried out based on the outcomes of the qualitative and quantitative analyses of various factors such as the Type portfolios, technological innovations, market presence, revenues of companies, and the opinions of primary respondents.
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