Banking-as-a-Service Market New Pathways for Research and Innovation are Being Opened by Trends

 Banking-as-a-service is an end-to-end approach that facilitates FinTech companies and other third party organizations to connect with a bank’s system employing APIs. This helps organizations to build innovative financial services upon the provider bank’s regulated infrastructure while enabling open banking services. In addition to this, various industries such as e-commerce, travel, health, telecom, and retail are using banking-as-a-service platform to boost business sales.

Furthermore, increase in use of digital transformation technology in banks and streamlining financial services are some of the important factors to boost the growth of the global banking-as-a-service market. In addition, improvement in fund transaction services across the U.S. and different developing nations positively impacts banking-as-a-service market growth.

According to a recent report published by Allied Market Research, titled, “Global Banking-as-a-service Market By Component, Type, Enterprise Size, and End User: Global Opportunity Analysis and Industry Forecast, 2021–2030,” the global banking-as-a-service market size was valued at $2.41 billion in 2020, and is projected to reach $11.34 billion by 2030, growing at a CAGR of 17.1% from 2021 to 2030.

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However, increase in vases of cyber-attacks on the personal financial information is hampering the market growth. On the contrary, surge in demand for banking-as-a-service infrastructure to improve business values and integration of artificial intelligence in banking-as-a-service platform are expected to offer remunerative opportunities for expansion of the market during the forecast period.

Depending on end user, the banks segment dominated the market in 2020, and is expected to continue this trend in the upcoming years, owing to increase in number of customers in bank to access various financial services such as saving, money transferring, and cash withdrawing.  However, FinTech corporations/NBFC is expected to provide lucrative opportunities for the global market, owning to increase in collaboration between NBFC and FinTech start-ups, which boosts the lending capabilities of NBFCs.

Region wise, the banking-as-a-service market was dominated by Europe in 2020, and is expected to retain its position during the forecast period, owing to expansion of FinTech infrastructure and hefty investments from private & public players in this region. However, Asia-Pacific is expected to witness significant growth in the near future, owning to increase in use of third-party payment service by several consumers across China, Japan, and India.

COVID-19 Impact Analysis

The outbreak of COVID-19 is anticipated to have a positive impact on growth of banking-as-a-service market share. Significant rise in adoption of open banking technology by banks and financial institutions has been observed, owing to rise in need to share financial details with consumers during the COVID-19 outbreak. In addition, several banks, retails, and financial institutions across North America have been adopting banking-as-a-service to improve the efficiency of payment clearing, which propels the growth of the market.

In addition, governments across developing countries of Asia-Pacific are adopting banking-as-a-service technology to boost digitization of banking services among end users, which would help them to improve the overall economy. Moreover, most of the financial service providers have started looking at banking-as-a-service as emerging technology, which drives the growth of banking-as-a-service market trends during COVID-19 outbreak.

Key Findings Of The Study

• By enterprise, the large enterprise segment was the major share contributor in 2020.
• Region wise, Europe generated highest revenue in 2020.
• Depending on end user, the banks segment was the key revenue generator in 2020.

The key players profiled in the banking-as-a-service market analysis are Bankable, BBVA, ClearBank, Green Dot., MatchMove Pay Pte. Ltd, Pi1, SolarisBank, Starling Bank, Square Inc., and Treasury Prime. These players have adopted various strategies to increase their market penetration and strengthen their position in the banking-as-a-service industry.