Bank as a Service Market Size, Share, and COVID-19 Impact Analysis, By Type (API based Bank as a Service and Cloud based Bank as a Service), By Enterprise Size (Large Enterprise & Small and medium Enterprise), By End User (Banks, FinTech Corporations, NBFC, and Others), Regional Forecast, 2024-2032

Bank as a Service (BaaS) is the provision of promoting banking products and services through third-party distributors. BaaS is enabled by seamless integration of non-banking businesses with regulated financial infrastructure, offering new specialized propositions and getting them to market faster. It offers new propositions, built on specificity and agility, thereby displacing existing offerings and disaggregating many profitable elements of the traditional banking value chain in the process. In addition, smaller banks and FinTechs technologies are initially dominating the market, including incumbent banks are now beginning to ramp up their significant investment in unique API-type model with recent entrants including BBVA and Goldman Sachs has released its own new BaaS portal for developers.

Banking as a service (BaaS) enables non-banks to provide major financial services to their consumer without any rules or regulations. Furthermore, to procure these services, the organization must need necessary licenses and banking regulations pertaining to capital and money laundering issues. With the adoption of digitalization in banking, companies from different verticals such as retail and consumer goods are discovering newer ways to expand their customer base and provide them more personalized service. The adoption of internet services offers better possibilities for interaction with companies, allows users to participate in the improvement of products and services.

Whereas, the BaaS platform has become a key element for open banking, where banks make their APIs available to outside developers to help them build new services and offer account holders more options, creating financial transparency. In additio

In March 2021, According to Oliver Wyman analysis, banking as a service provide new revenue. It enables financial service providers to leverage the BaaS model to generate new revenue.

Moreover, the high cost associated with the adoption of BaaS technology, and increasing cyberattacks might impede the industry growth. On the other hand, it is estimated that the rising demand for BAAS enhance business values is expected to offer lucrative opportunities for industry growth during the forecast period.

Impact of COVID-19 on the Bank as a Service Market

The COVID-19 pandemic is expected to impact the overall economy along with the financial markets including banking services. Due to the pandemic, banks and their users started using digital tools to seamlessly operate different functions. The COVID-19 crisis has forced banks and their users to adopt digital tools and processes to compensate for branch, office and call center closures. Moreover, with rise in adoption of e-commerce, the number of online transactions has also up surged during the COVID-19 outbreak.

Bank Leaders faced difficulty in balancing the traditional approach to risk management with the need to respond quickly that has created massive changes in their operating environment. Therefore, criminal cyber activity, including phishing attacks and fraud has increased more employees working remotely.

Additionally, banks and FinTech industries are more expected to provide secure contactless payments to speed up their payment transaction process. However, the COVID-19 crisis had enforced banks to improve their technical capabilities to protect systems from cyber-attacks and deal with consumer credit challenges.

Key Insights

The report will cover the following key insights:

• Micro Macro Economic Indicators.


• Drivers, Restraints, Trends and Opportunities.


• Business Strategies Adopted by the Players.


• Impact of COVID-19 on Banking as a Service Market.


• Consolidated SWOT Analysis of Key Player.

Analysis by End User

Based on end user, the market is categorized into various categories including Banks, FinTech Corporations, NBFC, and others (Government). Bank accounts for the highest market share in the industry. FinTech technologies have become a catalyst for intensifying competition in the banking industry.

Neo banks are winning market share by serving users at very lower fees. They act as a bridge between the services offered by traditional banks and the increasing expectations of new-age customers. Therefore, it is the capabilities of modern banking systems that allow newcomers to disrupt stagnating markets and create value by fast on boarding and retaining customers.

FinTech NFBCs represent a sector of non-banking financial companies that use new financial technology to conduct financial services. The NFBC are adopting BaaS platforms to offer payment services. The BaaS can be avail by linking directly with a bank.

Regional Analysis

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North America dominates the banking as a service market over the forecast period. Furthermore, with rising adoption of fintech technologies in developed countries such as Mexico, Canada, and U.S. and the presence of several key market players such as Green Dot Corporation (US), PayPal (US), Moven (US), and Square Inc. (U.S.) are propelling the market growth. Increasing use of financial services like online money transfers, mobile payments and peer-to-peer transfers that offers users with better banking experience are adding to the global banking as a service market growth in the region.

The distribution of the banking as a service market by region of origin is as follows:

• North America – 35%


• South America – 10%


• Europe – 22%


• Middle East and Africa – 7%


• Asia Pacific – 26%

Key Players Covered

The report will include key players such as Bankable, BBVA, ClearBank, Green Dot., MatchMove Pay Pte. Ltd, Pi1, SolarisBank, Starling Bank, Square Inc., Bnkbl Ltd, Banco Bilbao Vizcaya Argentaria, Green Dot., Project Imagine Ltd, Treasury Prime, and others.

Segmentation

Key Industry Development

• February 2022 – Fiserv Inc. acquired with Finxact cloud-based solution to increase digital banking transformation for clients. These banking technologies helps to increase innovation across various payment and financial services solution for fintech and financial institutions.


• September 2022 – TCS announced that Israel’s OFEK has selected banking services Bureau (BSB) powered by TCS BaNCS, to achieve its growth and transformation goals.