United States, Rockville MD – A recently published study by Fact.MR expects the global Fintech-as-a-Service market to augment at a 17% CAGR from 2022 to 2032. By the end of the said assessment period, a valuation of US$ 1,300 Billion is expected for the market. With the incidence emphasis on cashless transactions rising exponentially, the market for Fintech-as-a-Service platforms is expected to rise impressively.

From 2017 to 2021, the industry experienced noteworthy growth, registering a value CAGR of 17% and closing at US$ 269.2 Billion. Demand for AI-based technology for the development of FaaS platforms has especially spiked in the past few years, given the increasing adoption of innovative technologies by tech giants. This transition was further expedited when the COVID-19 pandemic struck since people were looking out for a no-contact transaction.

The notion of a digital economy is prospective to prevail in the coming years. Besides, financial institutions are focusing on developing a secured FaaS platform to offer enhanced protection and value-added functions to their, products. Prominent players are making hefty investments that are prospective to establish an advanced fintech infrastructure.

Which Drivers underpin Fintech-as-a-Service Industry Expansion?

Burgeoning Online Transaction Volumes to Promote FaaS Deployment across Key Industries

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.

Key Segments Covered in the Fintech-as-a-Service Industry Survey

  • By Type :
    • Fintech-as-a-Service for Payment
    • Fintech-as-a-Service for Funds Transfer
    • Fintech-as-a-Service for Loans
    • Fintech-as-a-Service for Other Types
  • By Technology :
    • API-based Fintech-as-a-Service
    • Artificial Intelligence-based Fintech-as-a-Service
    • RPA-based Fintech-as-a-Service
    • Blockchain-based Fintech-as-a-Service
    • Other Technology based Fintech-as-a-Service
  • By Application :
    • KYC Verification
    • Fraud Monitoring
    • Compliance & Regulatory Support
    • Other Applications
  • By End Use :
    • Banks
    • Financial Lending Companies
    • Insurance
    • Other End Uses
  • By Region :
    • North America
    • Latin America
    • Europe
    • Asia Pacific
    • Middle East & Africa

Competitive Landscape

Penetrating new geographies, collaborating with government agencies or service providers and rebranding initiatives comprise some major strategies adopted by prominent Fintech-as-a-Service providers. Some prominent market developments are as follows:

  • In September 2021, PayPal Holdings, Inc. signed an agreement to acquire Paidy, a leading two-sided payments platform and provider of buy now, pay later solutions in Japan, for ¥300 billion or approximately US$2.7 billion, principally in cash. The acquisition will expand PayPal’s capabilities, distribution, and relevance in the domestic payments market in Japan.
  • In October 2021, MasterCard Incorporated agreed to acquire Aiia, a leading European open banking technology provider offering a direct connection to develop and launch new digital solutions that meet the needs of everyday life, work, and play.
  • In August 2021, Square, Inc. and Afterpay Limited entered into a scheme Implementing Deed under which Square agreed to acquire all of the issued shares in Afterpay by way of a recommended court-approved Scheme of Arrangement.

Key players in the Fintech-as-a-Service Market

  • 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

Key Takeaways from Fintech-as-a-Service Market Study

  • Fintech-as-a-Service market growth to rise nearly 5x until 2032.
  • By Application, Compliance & Regulatory Support segment of Fintech-as-a-Service to flourish at a 16.2% CAGR
  • Financial Lending Institutions to be the top end-use area for Fintech-as-a-Service, growing at over 16.6% CAGR
  • North America to emerge as the fastest growing market, expected to flourish at a 16.6% CAGR

Source: FACT.MR