GVR Report cover Banking-as-a-Service Market Size, Share & Trends Report

Banking-as-a-Service Market Size, Share & Trends Analysis Report By Product Type (API-, Cloud-based BaaS), By Component (Platform, Services), By Enterprise Size (Large, SME), By End-use (Banks, NBFC), And Segment Forecasts, 2022 - 2030

  • Report ID: GVR-4-68039-973-8
  • Number of Report Pages: 130
  • Format: PDF, Horizon Databook
  • Historical Range: 2017 - 2020
  • Forecast Period: 2022 - 2030 
  • Industry: Technology

Report Overview

The global banking-as-a-service market size was valued at USD 19.65 billion in 2021 and is expected to expand at a Compound Annual Growth Rate (CAGR) of 16.2% from 2022 to 2030. The primary reasons propelling the market expansion are rising demand for financial services, rapid digitalization, and the availability of Application Programming Interfaces (APIs). Another reason for the expansion of the industry is the rising popularity of online banking. Consumer preference is shifting towards using online banking to access various services, including cash transfers, account statements, and online purchases.

U.S. banking-as-a-service market size, by product type, 2020 - 2030 (USD Million)

Due to this, fintech businesses are concentrating on offering improved digital services to customers for greater convenience and customer satisfaction. Banking-as-a-Service (BaaS) platforms have become a key element of open banking, where banks make their Application Programming Interfaces (APIs) available to outside developers so they may build new services and offer account holders more options for financial transparency. As a result of this API technology, retail banking is rapidly evolving, which is also altering how incumbents and customers interact. In addition to seizing the open banking opportunity before their rivals, tech-savvy legacy banks that develop their own BaaS platforms will now open up a new source of income by monetizing their platforms.

Traditional banks have gradually shifted away from their reliance on paper in recent years in favor of a more secure, digital administration of their operations. However, licensed banks have several limitations, including infrastructure and technology, to provide consumers with personalized services. In addition, as a result of the risk associated with getting banking licenses, the number of non-finance and newer fintech companies offering customers more personalized services has significantly increased. Moreover, government agencies worldwide are continually urging businesses that provide digital financial services to improve product offerings, which are expected to accentuate industry growth.

BaaS is made possible by the easy integration of financial products and services into other customer activities, frequently on digital platforms that aren’t financial. Customers utilize these platforms more frequently to access services including e-commerce, health, travel, retail, and telecom. Thus, a non-banking financial company can offer financial products and services under its brand so that customers experience purchasing from that brand, even though a financial institution is offering the financial product. A financial institution can create a platform for this purpose based on affordable, scalable, cloud-native technology, which will lower its cost to serve consumers.

The high cost associated with the adoption of BaaS technology, however, might impede the industry’s expansion. Moreover, increased cyberattacks on personal banking data may hinder industry growth. On the other hand, it is anticipated that the rising demand for BaaS infrastructure to enhance business values is expected to offer lucrative opportunities for industry growth during the forecast period. Moreover, the integration of Artificial Intelligence (AI) in the BaaS platform is creating a positive outlook for the market.

COVID-19 Impact Analysis

The COVID-19 pandemic has significantly accelerated the shift toward digital banking. Digital banking was a crucial component of retail banking before the pandemic, but clients have been shifting online in significantly greater numbers throughout the outbreak. Nonbank organizations are increasingly providing financial services, including bank accounts or digital wallets, lending, and payments. Embracing embedded finance provided by nonbanks aims at client retention, creating a positive outlook for the industry, which bodes well for its growth.

Component Insights

The platform component segment dominated the global industry in 2021 and accounted for the largest share of more than 57.90% of the overall revenue. Banking-as-a-Service platforms enable companies to embed financial services traditionally offered by the banks. The services include opening a monetary account, issuing cards, and even loans. BaaS platforms can integrate these services directly into the company’s existing software. The BaaS platforms enable customers to manage cash flows, pay bills, and access funding through the company’s website. The enhanced customer experience, increase in brand loyalty, and product branding & marketing are a few of the BaaS platform’s benefits, which contribute to the segment growth.

The services segment is anticipated to witness a significant growth rate during the forecast period. BaaS is reshaping the value chain of banking by enabling distributors to offer banking products and services through third-party platforms. Services provided by BaaS usually include integration, deployment, and maintenance of the platform, which comes with cloud storage, database management, hosting platforms, user authentication, and push notifications. BaaS providers offer services streamlining the software process while offering clients end-to-end support. The efficiency and simplicity of use provided by the services are expected to drive their adoption over the forecast period.

Product Type Insights

The cloud-based BaaS segment dominated the industry in 2021 and accounted for the maximum share of more than 57.10% of the global revenue. The segment is also anticipated to register the fastest growth rate during the forecast period. Along with promptly bringing new digital features into users’ hands, the BaaS cloud provides other advantages. Consistent policy enforcement, automatic provisioning, and traffic monitoring can also assist digital businesses more effectively in satisfying their stringent service commitments. Utilizing cloud technology to streamline digital operations can lessen reputational harm from service interruptions, which is anticipated to provide unique opportunities for the segment’s growth.

The API-based BaaS segment is anticipated to grow significantly over the forecast period. BaaS API allows secure data exchange between a fintech company and the bank. This enables companies to offer banking services to the users on their interfaces of the app or web, which is expected to provide opportunities for segment growth. The strong efforts being made by different fintech companies to improve the BaaS ecosystem are also driving the segment’s growth. For instance, in September 2021, a leading payment startup, Cashfree, unveiled its BaaS API offering called Accounts. This API is designed to assist neo-banks and fintech platforms in integrating banking services into their products easily.

Enterprise Size Insights

The large enterprises segment dominated the global industry in 2021 and accounted for the largest share of more than 60.85% of the overall revenue. To provide consumers with supplementary financial solutions, many large enterprises are investing in banking capabilities. Finastra, a provider of financial IT software, conducted interviews with 50 top corporate executives and a poll of 1,600 more people, finding that 85% of respondents had already implemented or intended to deploy BaaS capabilities. In addition, BaaS enhances the platforms and products that businesses use daily with contextualized, integrated banking services that are likely to drive segment growth.

The small & medium enterprises segment is expected to register a significant CAGR over the forecast period. The advantage of integrated finance, from an SME’s point of view, is that they can use the financial services whenever they need them, without having to open another app or website to initiate a bank transfer or complete a loan application. In addition, the embedded finance solution offered by a platform might also include value-added services like financial management and analytics tools. SMEs are more interested in financial products that don’t require a significant financial decision, like overdrafts and loans, than they are in transactional embedded finance products, such as accounts and cards.

End-use Insights

The banks segment dominated the global industry in 2021 and accounted for the maximum share of more than 34.75% of the overall revenue. BaaS can assist banks with cost-saving measures in addition to revenue generation. Banks are not required to spend money on technical advancement. Consequently, they can benefit from collaborations with other parties as they already have access to ready-to-go solutions. Strategic partnerships are anticipated to support banks in future investments and profit projections. Moreover, the dominance can also be attributed to the fact that banks have access to enormous funding capacity and the trust of their customers.

Global banking-as-a-service market share, by end-use, 2021 (%)

The Non-Banking Financial Companies (NBFC) end-use segment is anticipated to grow at the fastest CAGR over the forecast period. The NBFCs are increasingly adopting BaaS platforms to offer payment services. Due to significant capital requirements to obtain a banking license, the NBFCs are more inclined to integrate BaaS platforms into their products. Moreover, not everyone has access to the resources needed to maintain legacy systems and follow legal requirements. The BaaS model helps by linking directly with a bank and enables non-bank players and businesses to get around banking licensing regulations. Financial startups may get off the ground much faster without having to contend with a bank’s IT infrastructure, creating a positive outlook for segment growth.

Regional Insights

North America dominated the global industry in 2021 and accounted for the maximum share of more than 34.10% of the overall revenue. The growth is attributed to the efforts of technology companies present in the region, such as PayPal Holdings, Inc. and Green Dot Bank, among others, to establish the BaaS market. For instance, in April 2022, Finastra, a U.K.-based company, announced a BaaS collaboration with Microsoft to offer alternative lending solutions to Small and Medium Enterprises (SMEs). Through this collaboration, SME owners can easily and smoothly acquire pertinent and worthwhile business financing.

Banking-as-a-Service Market Trends by Region

Asia Pacific is expected to register the fastest growth rate during the forecast period. The fast-paced growth of this region can be attributed to a rise in awareness levels about the advantages of BaaS in nations like China, India, and Japan. Various initiatives by organizations worldwide to promote BaaS in Asia Pacific are also anticipated to aid the region’s expansion. For instance, in July 2022, Finastra announced offering HSBC’s Foreign Exchange (FX) services to mid-tier banks in the Asia Pacific (APAC) region by utilizing its own FusionFabric.cloud platform under a BaaS experience.

Key Companies & Market Share Insights

The key players are taking strategic initiatives as part of their efforts to improve their offerings. Market leaders are pursuing various initiatives, including strategic alliances, the launch of new products, and mergers & acquisitions. For instance, in November 2021, BM Technologies, Inc., a U.S.-based BaaS fintech, announced the acquisition of First Sound Bank, a community business bank. The combined business, which will be known as BMTX Bank, would be a fintech-based financial institution focused on nationwide digital customer service, backed by its community banking segment, which is anticipated to keep operating in the greater Seattle region.

In another instance, in April 2022, a German company, Mondu, partnered with Raisin Bank, a BaaS provider, to provide the Buy Now, Pay Later (BNPL) services to online B2B marketplaces and merchants. The BNPL product from Mondu now enables reasonable payment arrangements through direct interaction with online retailers’ checkout procedures. Mondu manages the processing of payments and related services if a business customer utilizes one of the accepted payment options. Some of the prominent players in the global banking-as-a-service market are:

  • Green Dot Bank

  • Solarisbank AG

  • PayPal Holdings, Inc.

  • Fidor Solutions AG

  • Moven Enterprise

  • The Currency Cloud Ltd.

  • Treezor

  • Bnkbl Ltd.

  • MatchMove Pay Pte Ltd.

  • Block, Inc.

Banking-as-a-Service Market Report Scope

Report Attribute


Market size value in 2022

USD 22.49 billion

Revenue forecast in 2030

USD 74.55 billion

Growth rate

CAGR of 16.2% from 2022 to 2030

Base year of estimation


Historical data

2017 - 2020

Forecast period

2022 - 2030

Quantitative units

Revenue in USD million/billion and CAGR from 2022 to 2030

Report coverage

Revenue forecast, company market share, competitive landscape, growth factors, and trends

Segments covered

Component, product type, enterprise size, end-use, region

Regional scope

North America; Europe; Asia Pacific; Latin America; MEA

Country scope

U.S.; Canada; Germany; U.K.; China; India; Japan; Brazil

Key companies profiled

Green Dot Bank; Solarisbank AG; PayPal Holdings, Inc.; Fidor Solutions AG; Moven Enterprise; The Currency Cloud Ltd.; Treezor; Bnkbl Ltd.; MatchMove Pay Pte Ltd.; Block, Inc.

Customization scope

Free report customization (equivalent to up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope

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Global Banking-as-a-Service Market Segmentation

The report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For the purpose of this study, Grand View Research has segmented the banking-as-a-servicemarket report based on component, product type, enterprise size, end-use, and region:

Global Banking-as-a-Service Market Segmentation

  • Component Outlook (Revenue, USD Million, 2017 - 2030)

    • Platform

    • Services

  • Product Type Outlook (Revenue, USD Million, 2017 - 2030)

    • API-Based Banking-as-a-Service

    • Cloud-Based Banking-as-a-Service

  • Enterprise Size Outlook (Revenue, USD Million, 2017 - 2030)

    • Large Enterprises

    • Small & Medium Enterprises

  • End-use Outlook (Revenue, USD Million, 2017 - 2030)

    • Banks

    • NBFC

    • Government

    • Others

  • Regional Outlook (Revenue, USD Million, 2017 - 2030)

    • North America

      • U.S.

      • Canada

    • Europe

      • Germany

      • U.K.

    • Asia Pacific

      • China

      • India

      • Japan

    • Latin America

      • Brazil

    • Middle East & Africa

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