Banking as a Service Market Set to Record Significant Growth with a Value of USD 3863.91 Billion, Recording a 28.78% CAGR Over the Forecast Period, Primarily Driven by Rapid Digital Transformation, Projects Kings Research

The global banking as a service market is anticipated to grow at a staggering CAGR of 28.78% through the projection period. Several key factors fostering market growth include the growing presence of prominent players and fast-paced digital transformation.

Dubai, UAE, Nov. 06, 2023 (GLOBE NEWSWIRE) -- According to a recent report published by Kings Research, the global Banking as a Service Market was valued at USD 540.86 billion in 2022 and is projected to reach USD 3863.91 billion by 2030, growing at a CAGR of 28.78% from 2023 to 2030. The industry is experiencing significant growth due to technological advancements, rapid digital transformation, and the rising presence of key players.

Banking as a Service becomes feasible through the seamless integration of financial products and services into non-financial digital platforms. Clients frequently utilize these platforms for various activities, including retail, e-commerce, travel, health, and communications services. This makes it possible for non-banking financial enterprises to provide financial products and services under their own brand, enhancing the client experience.

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Trending Now: Solid and Lewis & Clark Bank Join Forces to Accelerate Fintech Innovation

In September 2023, Lewis & Clark Bank, a technologically advanced bank with a proven track record in FinTech partnerships, and Solid, a leading provider of Banking as a Service (BaaS), announced a strategic agreement to speed up the development and introduction of innovative financial products and services.

Solid’s customers will have access to Lewis & Clark Bank's account, payment, and loan systems through the relationship. This will make it easier for customers of Solid to launch their financial products and services and adhere to regulatory standards.

Global Banking as a Service Market Snapshot:

Report CoverageDetails
Forecast Period2023-2030
Base Year2022
Market Value (2022)USD 540.86 Billion
Forecasted Value (2030)USD 3863.91 Billion
No. of Pages120
Segments CoveredEnterprise, End-User, and Geography
DriversGrowing Adoption of Banking as a Service by Large Enterprises to Augment Market Expansion
Increasing Application of Banking as a Service in Banks to Foster Market Progress
OpportunityInnovative Marketing Strategies to Drive Banking as a Service Market Growth

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Competitive Landscape

Major companies operating in global banking as a service industry are concentrating on a number of strategies, including partnerships, mergers and acquisitions, product developments, and joint ventures, to enhance their market shares across various geographies. Strategic initiatives implemented by key players include expansion efforts and investments, such as supply chain optimization, construction of new production facilities, and investments in R&D activities.

For instance, in May 2022, Oracle FS expanded its reach by securing new contracts for its Flexcube core banking system. These deals involved Caixa Economica da Misericordia de Angra do Heroismo in Portugal and Signature Bank, a FinTech startup in Nigeria. The renowned Portuguese bank opted for a comprehensive suite of Oracle FS solutions, while the Nigerian startup chose to implement Flexcube to bolster its operational capabilities.

Key players in the global banking as a service market include:

  • Solaris SE
  • Currencycloud
  • Bnkbl Ltd trading as Bankable.
  • Prime Treasury Services PTY. LTD
  • Green Dot Corporation
  • MatchMove Pay Pte Ltd
  • PayPal Holdings, Inc.
  • Sopra Banking Software
  • Treezor
  • Twilio Inc

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Growing Adoption of Banking as a Service by Large Enterprises to Augment Market Expansion 

Based on enterprise, the large enterprise segment is anticipated to dominate the global banking as a service market, accounting for a valuation of USD 2.56 billion by 2030. Prominent corporations are increasingly embracing banking as a service (BaaS) due to its capacity to provide financial services without necessitating extensive technological development or rigorous regulatory adherence. This strategic shift can yield cost reductions and expedite the introduction of financial products to market, enhancing a business's ability to efficiently cater to evolving consumer demands.

Moreover, there is a growing need to seamlessly integrate banking services into existing operational frameworks and workflows. This imperative arises from the widespread adoption of embedded finance and the proliferation of FinTech capabilities. In order to sustain competitiveness, businesses must integrate banking as a service into their established infrastructure.

Increasing Application of Banking as a Service in Banks to Foster Market Progress

Based on end-users, the banks segment is anticipated to grow at a robust CAGR of 29.96% over the forecast period owing to the rising utilization of banking as a service (BaaS) in banks. Banks play a pivotal role as both consumers and providers of BaaS. This adoption allows them to curtail operational expenses, expand their operations, and offer a wide variety of financial services to their customer base. By outsourcing services and establishing strategic collaborations with fellow financial institutions, banks can concentrate on their core strengths while ensuring adherence to regulatory standards. The inherent flexibility and scalability of BaaS make it an attractive option for banks aiming to improve their efficiency and competitiveness in a rapidly evolving market, ultimately driving the growth of the segment.

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Innovative Marketing Strategies to Drive Banking as a Service Market Growth

The banking as a service (BaaS) sector encompasses major participants such as BBVA and Solaris Bank, as well as smaller private companies. Prominent companies have been adopting effective marketing tactics to gain a competitive edge. These businesses have implemented pricing strategies, particularly for middle-class consumers in addition to promoting financial services to higher-income groups.

For instance, a BaaS provider might give a low-cost digital banking option that appeals to younger generations, who have grown up with technology and are more likely to feel at ease transacting money online. Other examples of cutting-edge marketing strategies could be incentives such as cashback benefits for using certain banking products or referral bonuses, utilizing targeted advertising through social media platforms, or even combining both approaches.

Europe Dominated the Banking as a Service Market Due to Increasing Demand for Improved Customer Service

Europe dominated the global banking as a service market with a valuation of USD 204.1 million in 2022. The global adoption of banking as a service represents a widespread trend, with financial institutions across the world embracing it to enhance their operational efficiency and improve customer services. The level of adoption varies considerably, driven by factors such as market demand, regulatory conditions, and technological capabilities, rather than being bound by specific geographic regions.

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Key Points from TOC:

Chapter 1 Introduction of The Global Banking as a Service Market 
Chapter 2 Executive Summary
Chapter 3 Research Methodology
Chapter 4 Global Banking as A Service Market Outlook
Chapter 5 Impact of Russia-Ukraine War
Chapter 6 Global Banking as a Service Market, By Enterprise
Chapter 7 Global Banking as a Service Market, By End-Use
Chapter 8 Global Banking as a Service Market, By Geography
Chapter 9 North America 
Chapter 10 Europe
Chapter 11 Asia-Pacific
Chapter 12 Middle East & Africa
Chapter 13 Latin America 
Chapter 14 Global Banking as a Service Market Competitive Landscape
Chapter 15 Company Profiles

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