Fintech-as-a-Service market to rise 5x by 2032, stimulated

USA, Rockville MD, Aug. 05, 2022 (GLOBE NEWSWIRE) — A recently published study by Fact.MR expects that global Fintech-as-a-Service market to increase at 17% CAGR from 2022 to 2032. By the end of the said assessment period, a valuation of USD 1300 billion is expected for the market. With the incidence weight of cashless transactions increasing exponentially, the market for Fintech-as-a-Service platforms is expected to rise impressively.

From 2017 to 2021, the industry experienced remarkable growth, registering a value CAGR of 17% and ending at $269.2 billion. The demand for AI-based technology for the development of FaaS platforms has increased especially in recent years, given the increasing use of innovative technologies by technology giants. This transition was further accelerated when the COVID-19 pandemic hit as people looked for a contactless transaction.

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

What Drivers Underpin Fintech-as-a-Service Industry Expansion?

Increasing online transaction volumes to market FaaS Distribution across key industries

The global adoption of advanced technologies such as blockchain technology, open banking, cloud and big data analytics, voice bot and digital payments is expected to drive the growth of the market. Banks and financial institutions are looking for ways to implement technological advances in their offerings.

These technological advances have made it possible to invest, borrow, transfer and save money 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 constantly working to advance traditional methods, which means that they are increasingly receiving funding from venture capitalists. These investments are made to promote several benefits offered by the companies such as lowering service costs, increasing processing time, rapid blockchain penetration and automated banking systems. These benefits are often implemented by the fintech platform as a service drives their demand.

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Key segments covered in Fintech-as-a-Service Industry survey

• By type:
  • Fintech-as-a-Service for payment
  • Fintech-as-a-Service for money 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
• After application:
  • KYC verification
  • Fraud monitoring
  • Compliance and regulatory support
  • Other applications

• For end use:
  • Banks
  • Financial loan companies
  • Insurance
  • Other end uses

• By region:
  • North America
  • Latin America
  • Europe
  • Asia Pacific
  • Middle East and Africa

Challenging landscape

Penetrating new geographies, partnering with government agencies or service providers and rebranding initiatives constitute some key 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 payment platform and provider of buy-now-pay-later solutions in Japan, for ¥300 billion or approximately $2.7 billion, mostly 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 provider of open banking technology that offers 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 an implementation agreement whereby Square agreed to acquire all of the issued shares of Afterpay by way of a recommended court-approved arrangement.

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Key players in Finech-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 research

• Fintech-as-a-Service market growth will increase almost 5 times until 2032.
• By Application, Compliance and Regulatory Support segment of Fintech-as-a-Service to flourish at a CAGR of 16.2%
• Financial lending institutions to be top end-use area for Fintech-as-a-Service, growing at over 16.6% CAGR
• North America will emerge as the fastest growing market, expected to flourish at a CAGR of 16.6%

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