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
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 really leaning into digital transformation these days! They're doing it to make things better for customers, cut down on expenses, and stay ahead of the game. That's where BaaS suppliers come in. They offer scalable, cloud-based solutions that help old-school banks upgrade their systems, roll out new digital goodies faster, and tap into new customer groups. And with all these fintech companies and non-bank financial institutions popping up, the demand for BaaS is booming. They usually can't build their own entire banking setup from scratch, so they depend on BaaS providers for the must-have banking features, compliance capabilities, and payment processing. Now, the Global Banking As-A-Service (BaaS) market? It's broken down into a few categoriesType, Enterprise Size, and End-User. When we talk about Type, that means either Cloud-based Bank-as-a-Service or API-based Bank-as-a-Service. Enterprise Size splits into Large Enterprises and SMEs. And finally, End-User divides into Banks, Fintech Corporations, and, well, Others!
The Global Banking As-A-Service (BaaS) Market is really taking off! We're seeing a huge jump in growth, mostly because everyone wants digital financial services tailored to them, and there are so many cool fintech companies popping up. But, it's not all smooth sailing. The pricey part of getting on board with a BaaS platform, and some older banks being a bit unsure, could slow things down a bit. On the flip side, the embedded finance world is getting bigger and offering tons of new chances for the Global Banking As-A-Service (BaaS) Market to expand. In 2023, this market was worth USD 657.90 Billion, and we're expecting it to hit USD 3,976.77 Billion by 2031. That's a growth of about 25.14% each year! Right now, Europe is leading the way with about 36.74% of the market, followed by North America with 31.90%. But, keep an eye on Asia Pacific – they're predicted to grow the fastest, around 28.20% annually over the next few years.
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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.
For big companies, embracing Banking as a Service (BaaS) can be a real game-changer. It lets them weave financial tools right into their digital offerings, making things much smoother for their customers. We're talking about companies with a thousand employees or more, often spread across multiple locations. These giants usually have a loyal customer base, a rock-solid brand, and easy access to funding. Plus, all those customers generate tons of data that can be used to fine-tune banking services, develop new ones faster, and do it all at a lower cost.
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.
Things haven't been a walk in the park for European banks lately. We've seen ups and downs in revenue, and frankly, some losses. Lower interest rates and, unfortunately, increased credit losses have squeezed profit margins. Then came the COVID-19 pandemic, really making things tougher. The ECB is keeping a close eye on things, and this could even affect how much capital banks are required to hold. Because of the slower economy and reduced revenues, banks are really focusing on cost efficiency, smarter risk management, and building a lean, mean digital machine for serving customers. That's driving a huge demand for more technology investments within the banks. A lot of them are now going digital and even exploring a "bank as a service" model. The big guys, you know, the High Street Banks, are partnering with FinTechs, and some are even creating their own digital versions.
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
Let's dive into the top 5 players in the Global Banking As-A-Service (BaaS) market. Our company ranking analysis isn't just a simple list; we dig deep! We look at things like a company’s brand value, their Type portfolio (think variations, specs, features, and price), and how big they are in different regions. We also check out their recent sales and revenue share. But that’s not all – we really study their Type portfolio, focusing on the tech they use and any new strategies they've got cooking to boost their global or regional presence. And, of course, we consider their distribution network (both online and offline) to get a real sense of their reach in the Global Banking As-A-Service (BaaS) market. The current top players include PayPal, Sqaure, Inc., TREEZOR (SOCIETE GENERALE GROUP), Fidor Bank (Groupe BPCE), and SolarisBank (Solaris SE).
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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