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A recent market study published by Future Market Insights (FMI) on the banking-as-a- service (BaaS) platform market includes a global industry analysis for 2016-2020 and opportunity assessment for 2021-2031, and delivers a comprehensive assessment of the most important market dynamics. After conducting a thorough research on the historical as well as current growth parameters, growth prospects of the market are obtained with maximum precision.
The banking-as-a- service (BaaS) platform market revenue totaled ~ US$ 2.5 Bn in 2020, according to Future Market Insights (FMI). The overall market is expected to reach ~ US$ 12.2 Bn by 2031, growing at a CAGR of 15.7% for 2021 – 31.The banking-as-a- service (BaaS) platform market growth will continue to accelerate, increasing competition prevalent in the market. FMI has forecast the top 5 providers to account for around 48.0% of total market in 2020.
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What Is the Impact of COVID-19 Crisis on Banking-as-a- Service (BaaS) Platform Growth?
COVID-19 pandemic has impacted every sector. Due to social distancing norms implemented to contain the spread of the virus, organizations are transforming towards digitalization to ensure overall safety employees and staffs.
The pandemic is likely to spur a widespread and systematic revamping of high-impact digital journeys in the banking sector, such as customer onboarding and product origination, to deliver a truly outstanding digital experience to their customers.
“Fintechs and digital banks have been encroaching on incumbent institutions in the banking game and disrupting traditional business models — but by moving into the BaaS space. Tech-savvy legacy banks can turn this looming threat into an opportunity” says FMI analyst.
Key Drivers
- Adoption of BaaS platform among diverse end users such as clothing industry, online retailers, and others will increase as they aim for expanding their customer base
- Surging collaboration between incumbents and fintech innovators to distribute financial products and gain remunerative opportunities will boost the market
- As BaaS platform reduces digitization costs for incumbents, more fintech companies are adopting these services to gain edge in the industry
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Key Restraints:
- Lack of protection of secure data and flexibility will act as challenge for banking-as-a- service providers
- Unavailability of secure platforms to deploy targeted solutions might hamper the market growth
Competitive Landscape
Maximum number of leading players in the banking-as-a- service (BaaS) platform industry are coming with advanced and innovative solutions that meets the ever-changing demand from various organizations. In addition, several multinational companies and banking firms are acquiring fintech start-ups to develop their own omnichannel digital banking products to serve their customers and reduce the churn rate.
- For instance, in January 2021, Sopra Steria, a European leader in digital transformation, announced via its subsidiary Sopra Banking Software, the acquisition of Fidor Solutions, the software subsidiary and digital banking specialist of next-generation bank Fidor Bank. This acquisition would significantly accelerate the pace of development and marketing of Sopra Banking Software's digital solutions, in particular by augmenting the user features offered to banks through its Digital Banking Engagement Platform (DBEP) solutions.
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Key Points Covered in Banking-as-a- Service (BaaS) Platform Market Survey
- Who are some of the leading companies offering banking-as-a- service (BaaS) platform?
Some of the leading companies in this landscape are Sterling National Bank, BBVA S.A., Green Dot Corporation, and Starling Bank among others. As per Future Market Insight, nearly 45%-50% of the market share is currently covered by the top 15 players. - How much is the global banking-as-a- service (BaaS) platform market worth?
The banking-as-a- service (BaaS) platform industry was valued at ~US$ 2.5 Bn in 2020, and is estimated to grow at an exceptional pace with a CAGR of 15.7% to reach ~US$ 12.2 Bn in 2031. - What will be the demand outlook/ sales forecast for banking-as-a- service (BaaS) platform?
The sales of banking-as-a- service (BaaS) platform solutions are expected to total ~US$ 2.8 Bn by the end of 2021, and is likely to reach ~US$ 12.2 Bn by 2031. - What was the last 5 year market CAGR?
The market in last 5 years (2016 – 2020) grew by a CAGR of 11.8%. - What is the Global Market Growth Between 2020 and 2021?
The global market growth between 2020 and 2021 is 13.8%. - What are the top 5 countries driving demand?
Top 5 countries driving demand for banking-as-a- service (BaaS) platform include the India, China, U.S., and Malaysia. - How the Europe banking-as-a- service (BaaS) platform industry growth will unfold?
The banking-as-a- service (BaaS) platform industry in Europe is estimated to expand 3.0X over the forecast period.
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