finance

At 17% CAGR, Fintech-as-a-Service Platform Market Size to Hit USD 949 Bn, Globally by 2028

Written by IhebQld

NEW YORK, Aug. 17, 2022 /PRNewswire/ — As per Zion Market Research study, The global fintech-as-a-service platform market size was worth around USD 232.17 billion in 2021 and is predicted to grow to around USD 949 billion by 2028 with a compound annual growth rate (CAGR) of roughly 17% between 2022 and 2028.

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Fintech-as-a-Service Platform Market: Overview      

Fintech refers to Financial technology and is the technology-driven segment of finance-related industries. It uses applications and software to enhance customer experience by automating processes that are related to financial transactions which result in easier operations for the end-user. Fintech is more widely used than we realize as it has been able to change the way financial transactions are dealt with. Fintech-as-a-service means providing financial technology as a service and the end goal is always to relieve customer problems as quickly and efficiently as possible. For example, Akurateco, a white-label payment gateway, offers a “Cashier platform” allowing merchants from various businesses to access multiple payment solutions with the aid of just one integration.

The benefits of fintech-as-a-service platforms are multifold. These platforms do not require maintenance fees. Since this is a service platform, a user does not necessarily have to pay for these services. It’s the responsibility of the vendor to provide smooth processing. The services have been proven to reduce processing costs by at least 50% because users can route transactions via multiple payment service providers, and the users receive the benefit of choosing the lowest rates from a stack of providers. With the growing need for data and transactional security, many fintech-as-a-service platforms offer excellent prevention against fraud and chargeback. This is one of the major features of these services that are constantly attracting consumers and resulting in a higher user database in such a short period.

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Key Industry Insights & Findings of the Fintech-as-a-Service Platform Market Reports:

  • As per the analysis shared by our research analyst, the Fintech-as-a-Service Platform Market is expected to grow annually at a CAGR of around 17 % (2022-2028).

  • Through the primary research, it was established that the Fintech-as-a-Service Platform Market was valued at approximately USD 232.17 billion in 2021 and is projected to reach roughly USD 949 billion by 2028.

  • The global fintech-as-a-service platform market size is expected to grow owing to the rising investments in the banking & finance sector to upgrade and enhance customer experience.

  • Banks and other financial institutions have been in existence for decades but their technological revolution is a recent event owing to higher customer demand for user-oriented service approaches.

  • More and more financial service providers are undertaking serious and strategic approaches towards delivering as per customer demands, as a result, the global market is witnessing a rise in various partnerships amongst banks and Information technology (IT) service providers.

  • In 2020, the Indian banking sector spent over USD 11 billion on incorporating technology which is a 9.1% increase from the investments in 2019.

  • This trend is expected to provide ample and lucrative growth opportunities in the global market as consumer demands are ever-evolving which is also propelled by the constant innovations undertaken by financial institutes to stay ahead in the competition.

  • The global fintech-as-a-service platform market was dominated by North America in 2021 with over 35.6% of the global market share and is anticipated to follow the same trend during the projection period.

  • Asia-Pacific is projected to register a high CAGR mostly driven by the increased adoption rate of fintech-as-a-service platforms in regions like India, Japan, China, and Singapore. The growth rate may be as high as 18% by 2028.

Zion Market Research published the latest report titled “Global Fintech-as-a-Service Platform Market Segmentation By Technology (Artificial Intelligence, and Blockchain), By End-Use (Investment Banking, Retail Banking, Insurance, Stock Trading Firms, Hedge Funds, and Others), By Type (Fund Transfer, Payments, Personal Loans, Personal Finance, and Others), By Application (Compliance and Regulatory Support, KYC Verification, and Fraud Monitoring) and By Region – Global and Regional Industry Overview, Market Intelligence, Comprehensive Analysis, Historical Data, and Forecasts 2022 – 2028. into their research database.

Industry Dynamics:

Fintech-as-a-Service Platform Market: Growth Drivers

The global fintech-as-a-service platform market size is expected to grow owing to the rising investments in the banking & finance sector to upgrade and enhance customer experience. In today’s digital world, almost all sectors have undergone intense technological advancements by leveraging the benefits offered by technology in easing operations while also providing excellent business output results. Banks and other financial institutions have been in existence for decades but their technological revolution is a recent event owing to higher customer demand for user-oriented service approaches. The shift of consumer preference towards digital technology is anticipated to aid global market growth. More and more financial service providers are undertaking serious and strategic approaches towards delivering as per customer demands, as a result, the global market is witnessing a rise in various partnerships amongst banks and Information technology (IT) service providers. This is also coupled with the need to provide excellent financial services even to the remotest places that were left untouched until a few years ago.

In 2020, the Indian banking sector spent over USD 11 billion on incorporating technology which is a 9.1% increase from the investments in 2019. Such a positive approach coupled with the rising number of fintech-as-a-service platform providers is anticipated to become a major global market growth driver.

Fintech-as-a-Service Platform Market: Restraints

Since fintech-as-a-service platforms deal with huge sums of money, there is a tendency of general lack of trust amongst end-consumers towards the complete adoption of FaaS systems. The prevalent skepticism is expected to restrict the global market growth.

FaaS systems cater to financial entities and deal with monetary transactions. To gain higher credibility, they have to strictly follow the various regulations that are in place for finance or related institutes. These rules differ from one country to another as the government’s compliance rules. The problem rises in international transactions or when domestic companies try to expand into foreign countries. Such restricted growth is projected to withhold the global market from attaining its full potential.

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Global Fintech-as-a-Service Platform Market: Opportunities

Due to the rising digitalization, consumer demands have shifted from conventional needs to modern ones. Such drastic change in consumer needs has encouraged fintech-as-a-service platform providers to deliver customized solutions to their clients. This trend is expected to provide ample and lucrative growth opportunities in the global market as consumer demands are ever-evolving which is also propelled by the constant innovations undertaken by financial institutes to stay ahead in the competition.

The increase in cross-border payments may also encourage the adoption of FaaS platforms. As per estimates, more than 40% of large enterprises use fintech-as-a-service platforms for real-time payments which is an indication of higher acceptance of these services.

Global Fintech-as-a-Service Platform Market: Challenges

Since fintech initiatives, as well as FaaS platforms, deal with sensitive data related to money and user information, they are highly prone to security attacks. Since traditional banks were more physical, data privacy was not much of an issue, however, with all types of data being transferred to online systems, the security risk is higher. The fintech-as-a-service platform has to make sure that they use top-notch security systems to safeguard its clients’ details. In case, platforms are unable to do so, a data breach may have huge negative implications which may result in large customers losing their trust in these services.

Global Fintech-as-a-Service Platform Market: Segmentation

  • The global fintech-as-a-service platform market is segmented based on technology, end-use, type, application, and region.

Based on technology, artificial intelligence and blockchain are the two main global market segments. Blockchain is more widely used by maximum players. Over 28% of the global market was dominated by blockchain technology in 2021 owing to its higher use by large-scale enterprises. Benefits associated with blockchain are expected to drive segmental growth during the forecast period.

Based on end-use, the global market segments are investment banking, retail banking, insurance, stock trading firms, hedge funds, and others. Insurance generated over 30% of the global market revenue in 2021 because of high applications for insurance companies to handle claim processing and risk assessment.

Based on type, the global market is divided into funds transfer, payments, personal loans, personal finance, and others. Payments held around 40.20 % of the global market revenue in 202 aided by the integration of AI technology and mobile-based payment methods instead of traditional banking.

Based on application, the global market segments are compliance & regulatory, KYC verification, and fraud monitoring. In 2021, compliance and regulatory support generated 31.9% of global market revenue which was propelled by the rise in online customer support provided by financial institutions to upgrade customer service and streamline their operations.

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List of Key Players in Fintech-as-a-Service Platform Market:

Key questions answered in this report:

  • What are the growth rate forecast and market size for Fintech-as-a-Service Platform Market?

  • What are the key driving factors propelling the Fintech-as-a-Service Platform Market forward?

  • What are the most important companies in the Fintech-as-a-Service Platform Market Industry?

  • What segments does the Fintech-as-a-Service Platform Market cover?

  • How can I receive a free copy of the Fintech-as-a-Service Platform Market sample report and company profiles?

Report Scope:

Report Attribute

Details

Market size value in 2021

USD 232.17 Billion

Revenue forecast in 2028

USD 949 Billion

Growth Rate

CAGR of almost 17 % 2022-2028

Base Year

2020

Historic Years

2016 – 2021

Forecast Years

2022 – 2028

Segments Covered

By Product Type, By Application, And By End Use

Forecast Units

Value (USD Billion), and Volume (Units)

Quantitative Units

Revenue in USD million/billion and CAGR from 2022 to 2028

Regions Covered

North America, Europe, Asia Pacific, Latin America, and Middle East & Africa, and Rest of World

Countries Covered

U.S., Canada, Mexico, U.K., Germany, France, Italy, Spain, China, India, Japan, South Korea, Brazil, Argentina, GCC Countries, and South Africa, among others

Companies Covered

Mastercard Incorporated, Rapyd Financial Network, PayPal Holdings, Inc., Solid Financial Technologies, Inc., Railsbank Technology Ltd., Block, Inc., Synctera Inc., Upstart Holdings, Inc., Envestnet, Inc., and Braintree

Report Coverage

Market growth drivers, restraints, opportunities, Porter’s five forces analysis, PEST analysis, value chain analysis, regulatory landscape, market attractiveness analysis by segments and region, company market share analysis, and COVID-19 impact analysis.

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Recent Developments:

  • In April 2022, United States Agency for International Development (USAID) launched a digital investment program, to mobilize private capital to aid digital finance along with internet service providers in developing economies. This program aims to promote competition coupled with advancement in the use of secure network equipment while also reducing the gender digital divide with the help of inclusive, safe, and affordable digital services.

  • In July 2021, Rapyd Financial Network Ltd. announced that it will acquire Iceland-based payment solution provider Valitor from Arion Bank. The transaction cost Rapyd industries USD 100 million. The acquisition is expected to empower customers from different industries to integrate omnichannel payments with complete streamlining. It will also assist the consumers to expand in new markets, and unlock revenue & growth potential while also flattening FX fees.

Regional Dominance:

The global fintech-as-a-service platform market was dominated by North America in 2021 with over 35.6% of the global market share and is anticipated to follow the same trend during the projection period. The rising trend of higher demand for digital financial services is anticipated to aid regional growth. As per a poll conducted by Mastercard, over 51% of USA citizens use contactless payment methods. The regional market growth may also be attributed to the presence of a higher number of service providers and increased investments in the financial sector.

Asia-Pacific is projected to register a high CAGR mostly driven by the increased adoption rate of fintech-as-a-service platforms in regions like India, Japan, China, and Singapore. The growth rate may be as high as 18% by 2028. The regions have witnessed a high rise in fintech companies which are backed by government policies and the higher rate of returns in these regions. In the 1st QN of 2022, the region registered investment of over USD 3.4 billion in fintech-related startups.

Global Fintech-as-a-Service Platform Market is segmented as follows:

Fintech-as-a-Service Platform Market: By Technology Outlook (2022-2028)

  • Artificial Intelligence

  • Blockchain

Fintech-as-a-Service Platform Market: By End-Use Outlook (2022-2028)

  • Investment Banking

  • Retail Banking

  • Insurance

  • Stock Trading Firms

  • Hedge Funds

  • Others

Fintech-as-a-Service Platform Market: By Type Outlook (2022-2028)

  • Fund Transfer

  • Payments

  • Personal Loans

  • Personal Finance

  • Others

Fintech-as-a-Service Platform Market: By Application Outlook (2022-2028)

Fintech-as-a-Service Platform Market: By Region Outlook (2022-2028)

North America

Europe

  • France

  • The UK

  • Spain

  • Germany

  • Italy

  • Rest of Europe

Asia Pacific

  • China

  • Japan

  • India

  • South Korea

  • Southeast Asia

  • Rest of Asia Pacific

Latin America

  • Brazil

  • Mexico

  • Rest of Latin America

Middle East & Africa

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