Fintech-as-a-Service Market Size, Share & Trends Analysis Report By Type (Payment, Fund Transfer, Loan), By Technology (Artificial Intelligence, Blockchain), By Application, By End-use, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global fintech-as-a-service market size was valued at USD 232.14 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 17.2% from 2022 to 2030. Fintech-as-a-Service (FaaS) solutions include everything from card issuing, to payment processing to fraud prevention. The growth of the market can be attributed to the factors such as the increasing adoption of Artificial Intelligence (AI) technologies, mobile payment, and rising investments in fintech infrastructure. The rising consumer inclination toward digital financial services is also driving the growth of the market.

The global adoption of advanced technologies such as blockchain technology, open banking, cloud & big data analytics, voice bot, and digital payments is anticipated to drive the growth of the market. Banks and financial institutions are looking for ways to implement technological advancements in their offerings. These technological advancements have made it possible to invest, borrow, transfer, and save funds virtually. Thus, technological advancements in the fintech sector are expected to drive the growth of the fintech-as-a-service platform market.

Fintech companies are continuously working on advancing traditional methods due to which they are increasingly receiving funding from venture capitalists. These investments are made to foster multiple benefits offered by the companies such as lowering service costs, increasing processing time, swift blockchain penetration, and automated banking systems. These benefits are often implemented by the fintech platform as a service is driving their demand.

Multiple government entities around the world are constantly encouraging companies that provide digital financial services to enhance their offerings. For example, in April 2022, USAID launched a new finance program ‘Digital Invest’ which is aimed at utilizing private capital for internet service providers (ISPs) and digital finance serving traditionally excluded consumer populations worldwide. As a result, the market will have significant growth opportunities during the forecast period.

With the increased digitization of these financial services, consumers are concerned about their security and privacy. However, an improved UI experience embedded with better data security and privacy among the users is anticipated to create opportunities for the growth of the market. Moreover, the inability to adapt to the changing technology among elderly users is also expected to hinder the growth of the market.

COVID-19 Impact Analysis

The outbreak of COVID-19 played a decisive role in driving the growth of the market over the projected period. The adoption of contactless payment methods and digitized financial services increased as people were confined to their homes. Consumers across the globe were adopting contactless payment methods as a safe mode of transaction. At the same time, several retail stores also adopted contactless payments as part of their efforts to ensure a safe and secure way of payment for the customers. The increased adoption of digital fintech services such as digital wallets during the pandemic bode well for the fintech platform as a service.

Type Insights

The payment segment dominated the market in 2021 and accounted for a share of 40.10% of the global revenue. The increasing integration of AI technology and API into mobile-based payment services for traditional banking is anticipated to push the segment's growth. The innovative efforts being deployed by various tech-based companies to enhance their respective products also bodes well for the segment growth. For example, Google introduced the release of voice-to-text features in November 2021, allowing users to use voice commands to add their account information to the platform to initiate payments.

The fund transfer segment is anticipated to witness significant growth during the forecast period. Fund transfer is mainly associated with transferring and receiving money using technology-based payment systems. The growing popularity of fund transfer apps worldwide is expected to trigger the demand thereby driving the growth of the segment. The efforts are being pursued by various fintech companies worldwide to develop fund transfer apps with modern user interfaces that ensure a better customer experience. These factors are fueling the segment growth.

Technology Insights

The blockchain segment dominated the market in 2021 and accounted for a share of more than 28.16% of the global revenue. The increasing demand for blockchain technology is particularly rising among large enterprises. Several large enterprises are trying to adopt blockchain due to its greater transparency and its automation benefits. Financial institutions are adopting blockchain technology for the enhanced security and efficiency it offers. With blockchain technology, users can be sole owners of their wealth, and only they can access their assets which provide added security to both financial institutions and end-users. The benefits offered by blockchain are expected to drive the growth of the segment.

The artificial intelligence segment is expected to register the fastest growth during the forecast period. The rising adoption of AI among various companies due to improved decision making, query resolution, less processing time, and better efficiency is driving the segment growth. Moreover, AI drives innovation among companies which is resulting in customized, fast, and safer services with a higher level of customer satisfaction and global reach. Such enhancements being pursued by several companies to gain a competitive advantage and strengthen their market position are expected to drive the growth of the segment.

Application Insights

The compliance and regulatory support segment dominated the market in 2021 and accounted for a share of over 31.89% of the global revenue. Several financial institutions worldwide are rolling out customer support within the app as part of the efforts to streamline their operations and enhance customer experience. Furthermore, rising incidents of fraud and money laundering across the globe are also forcing these companies to offer better customer support. Thereby, driving the segment growth during the forecast period.

The KYC verification segment is anticipated to grow at a promising CAGR of 17.7% during the forecast period. The increasing illegal activities and number of frauds are among the major factors that are expected to drive the growth of the segment. KYC is an important and regulatory aspect that validates the personal information provided by users to verify their credibility. Moreover, KYC also ensures that the business evaluates clients’ financial situations and tracks their accounts for fraudulent transactions.

End-use Insights

The insurance segment dominated the market in 2021 and accounted for a share of 30.04% of the global revenue. The use of fintech-as-a-service platforms helps insurance companies to get accurate risk calculation and claim processing which is expected to drive the growth of the segment. Furthermore, insurers are partnering with fintech enterprises to lower processing costs and time to retain clients. The growing demand for fintech-as-a-service platforms in the insurance industry is anticipated to drive the market during the forecast period.

The financial lending companies are expected to register a CAGR of 17.0% during the forecast period. The rising consumer preference for using financial instruments at convenience from their home is boosting the segment growth. In addition, tech-enabled platforms help financial institutions to offer services such as lending, borrowing, fixed deposits, and others. Moreover, the rising adoption of digital lending platforms bodes well for the growth of the market.

Regional Insights

North America dominated the fintech-as-a-service market in 2021 and accounted for a share of over 34.57% of the global revenue. The growing preference for digital financial services across North America is projected to propel the growth of the regional market. For instance, according to MasterCard Contactless Consumer Polling, 51% of U.S. customers use some type of contactless payment option. The changing consumer preference toward digital payment methods and fintech services is driving the market’s growth.

Asia Pacific is expected to grow at the highest CAGR of 18.0% during the forecast period. The growth of the regional market is attributed to rising awareness about the benefits of FaaS platforms in countries such as China, India, and Japan. Governments and venture capitalists are aggressively funding fintech firms to promote the use of digital services and fintech-as-a-service platforms. For instance, in 2022, funding for fintech companies in the Asia Pacific region raised USD 3.3 billion in the first quarter.

Key Companies & Market Share Insights

The market is highly competitive due to the existence of various dominant players. These players are investing aggressively in R&D activities to enhance their product offerings. They are seeking different strategies, including strategic partnerships, to improve their offerings. For instance, in July 2021, Rapyd Financial Network Ltd., a U.K.-based fintech company, announced its agreement with Arion Bank in Iceland, to acquire an Iceland-based payment solution company, Valitor. With this acquisition, Rapyd Financial Network Ltd.’s payment capabilities and issuing portfolio will be enhanced and the services will be offered throughout Europe. Some prominent players in the global finance-as-a-service market include:

• PayPal Holdings, Inc.

• Block, Inc.

• Mastercard Incorporated

• Envestnet, Inc.

• Upstart Holdings, Inc.

• Rapyd Financial Network Ltd.

• Solid Financial Technologies, Inc.

• Railsbank Technology Ltd.

• Synctera Inc.

• Braintree

Fintech-as-a-Service Market Report Scope

Global Fintech-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 this study, Grand View Research has segmented the global fintech-as-a-service market report based on type, technology, application, end-use, and region:

• Type Outlook (Revenue, USD Billion, 2017 - 2030)

  • Payment

  • Fund Transfer

  • Loan

  • Others

• Technology Outlook (Revenue, USD Billion, 2017 - 2030)

  • API

  • Artificial Intelligence

  • RPA

  • Blockchain

  • Others

• Application Outlook (Revenue, USD Billion, 2017 - 2030)

  • KYC Verification

  • Fraud Monitoring

  • Compliance & Regulatory Support

  • Others

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

  • Banks

  • Financial Lending Companies

  • Insurance

  • Others

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

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

  • Middle East & Africa