Fintech as a Service (FaaS) refers to a business model that allows organizations to outsource financial technology (fintech) services to a third party. This strategy enables businesses to use fintech services flexibly and cost-effectively, improving their financial operations.
The main types of fintech as a service are banking, payment, insurance, investment, lending, and others. Banking refers to the sector of commercial enterprises that manage money, credit, and various other financial affairs for individuals as well as corporate entities. They use various technologies such as artificial intelligence (AI), blockchain, robotic process automation (RPA), application programming interfaces (API), and others, which are used in various applications, including fraud monitoring, KYC (Know Your Account) verification, compliance and regulatory support, and others. Several end-users are included, such as banks, financial institutions, insurance companies, and others.
The global fintech as a service (FaaS) market is segmented -
1) By Type: Banking, Payment, Insurance, Investment, Lending, Other Types
2) By Technology: Artificial Intelligence (AI), Blockchain, Robotic Process Automation (RPA), Application Programming Interfaces (API), Other Technologies
3) By Application: Fraud Monitoring, KYC Verification, Compliance And Regulatory Support, Other Applications
4) By End-User: Banks, Financial Institutions, Insurance Companies, Other End-Users
The global fintech as a service market is expected to grow from $277.36 billion in 2022 to $327.51 billion in 2023 at a compound annual growth rate (CAGR) of 18.1%. The Russia-Ukraine war disrupted the chances of global economic recovery from the COVID-19 pandemic. The war between these two countries has led to economic sanctions on multiple countries, surge in commodity prices, and supply chain disruptions, causing inflation across goods and services and resulted in increased interest rates affecting many markets across the globe. The fintech as a service market is expected to reach $625.78 billion in 2027 at a CAGR of 17.6%.
The increase in the shift towards digital banking and payments is expected to propel the growth of fintech as a service market going forward. Digital banking refers to banking done using a digital platform, eliminating all paper-based transactions, including demand drafts, pay-in slips, and checks. Fintech as a Service (FaaS) plays a significant role in digital banking by providing mobile applications, web-based platforms, APIs, and more sophisticated applications that use artificial intelligence and machine learning to provide financial advice. FaaS also offers digital banking solutions, which enable companies to provide their customers with online banking services. For instance, in July 2023, according to a report shared by Finder.com, an Australia-based independent comparison website, an estimated 93% of Brits were using online banking in 2022. Around another 5.3 million Brits (10%) intend to get a digital-only bank account in 2023. By 2028, the number of digital-only bank account holders is predicted to be 22.6 million (43%). Therefore, the increase in the shift towards digital banking and payments is driving the growth of fintech as a service market.
Major players in the fintech as a service market are Stripe Inc., Rapyd Financial Network Ltd., Visa Inc., Mastercard Incorporated, Fiserv Inc., Block Inc., Fidelity National Information Services Inc., Global Payments Inc., NCR Corporation, Broadridge Financial Solutions, Worldline SA, Diebold Nixdorf Incorporated, Coinbase Global Inc, WEX Inc., Jack Henry and Associates Inc., Chime Financial Inc., Finastra, Green Dot Corporation, Envestnet Inc., Adyen NV, Temenos AG, Revolut Ltd., Marqeta Inc., Airwallex Pty Ltd., Plaid Inc., Finix Payments Inc., Square Capital LLC, Dwolla Inc., Synctera Inc., and Solid Financial Technologies Inc.
Technological innovations are a key trend gaining popularity in the fintech as a service market. Major companies operating in the fintech as a service market are focused on innovating technologically advanced solutions to strengthen their position in the market. For instance, in April 2023, Valley National Bank, a US-based regional bank holding company, launched a new fintech innovation platform powered by NayaOne. Through a straightforward and user-friendly onboarding process, the platform is already integrated with the goods and services of numerous financial businesses. It offers a set of tools for producing and using synthetic data, enabling Valley and its fintech partners to quickly test-drive novel solutions in a controlled, secure environment.
In March 2023, TD Bank Group, a Canada-based banking and financial services business, acquired Cowen Inc. for an undisclosed sum. The acquisition strengthens TD Securities' long-term growth strategy in the United States and expands its current operations with products and services that are very complementary. Cowen Inc. is a US-based fintech company that offers equity and debt financing, investment banking, and other financial-related services.
North America was the largest region in the fintech as a service market in 2022. The regions covered in fintech as a service report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The countries covered in the fintech as a service market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Italy, Spain, Canada.
The fintech as a service market includes revenues earned by financial services such as white-label E-Wallet platforms, card acceptance, payment acceptance, payouts, and remittances. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
The fintech as a service market research report is one of a series of new reports from The Business Research Company that provides fintech as a service market statistics, including fintech as a service industry global market size, regional shares, competitors with a fintech as a service market share, detailed fintech as a service market segments, market trends, and opportunities, and any further data you may need to thrive in the fintech as a service industry. This fintech as a service market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.