Global Fintech-as-a-Service Platform Market Growth, Size & Share | Generate revenues of USD 949 billion by 2028 | Zion
Global Fintech-as-a-Service Platform Market Overview
Fintech-as-a-Service Platform Market- Zion Market Research
The global market size for fintech-as-a-service platforms was worth around USD 232.17 billion in 2021 and a CAGR of approximately 17% between 2022-2028.
—Zion Market Research
SUITE N202, NEW YORK, USA, Dec. 14, 2022 /EINPresswire.com/ — The global fintech-as-a-service platform market is expected to grow due to the increasing number of users using mobile applications for financial transactions. The rise has been aided by the rise in the number of smartphone manufacturers offering smart phones at affordable prices, which in turn has helped global market penetration by increasing customer reach even in the most remote locations. According to Emizentech statistics, more than 44% of global transactions were conducted through mobile applications. Tipalti Inc. stated that more than 64.2% of consumers in the financial sector use some form of fintech-as-a-service platform. Looking at the high potential of the global market, more FaaS platform providers can be seen entering the market. As of 2022, India has more than 6,600 FaaS-related startups, and the number is predicted to grow further in the coming years. As of November 2021, the United States had over 10,755 fintech unicorns according to reports published by Statista.
The credibility issues along with regulatory compliance may limit the global market expansion. The FaaS vendors that create customized services are expected to provide global market growth opportunities during the forecast period. The data privacy and security issues are expected to challenge the global market value growth.
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Global Fintech-as-a-Service Platform Market Overview
The fintech-as-a-service platform allows a company to use a fintech application programming interface (API) to embed various financial capabilities into the company’s pre-existing products, applications and other services. FaaS platforms enable white label acceptance, card issuance, e-wallet platforms, identity verification, payments and remittances, merchant services, virtual accounts, fraud detection and other customer-facing services. Using a fintech-as-a-service platform, organizations to develop infrastructure, licensing and compliance, integration of various financial systems and other related activities are performed by a third party, thereby improving the company’s operational efficiency. FaaS platforms have managed to change the traditional banking methods and have driven them towards a more future-oriented approach.
Many fintech players are now offering their APIs to other key players in the global market, which has resulted in higher growth in fintech-as-a-service platforms. Leveraging the benefits offered by these systems has proven to help businesses improve their end-to-end processes and systems. Since FaaS platforms allow complete management and delivery of end results, the global market has managed to leave a lasting impact on the international financial industry. Many leading research papers have emphasized the importance of adopting FaaS platforms, especially for financial institutions. The advanced technology is able to automate the entire lending process where minimum human intervention is required to complete the protocol. The systems also allow streamlining of the documentation process, which is an integral part of secure financial transitions. These are processes that take a long time, but are also important. By using technology to automate these processes, with no room for error, organizations will be able to reduce the processing time of the entire procedure and stay ahead of the competition.
Covid-19 had a positive impact on the global market value. This was driven by the regulations set by governments to maintain social distancing. Since majority of the banks or financial institutions were physically closed for operations, there was an increase in the demand for digitization of almost all segments of the banking and financial institutions. The higher FaaS adoption rate was seen in 2020 and 2021 due to strict regulations restricting transportation and movement of people.
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The Key Target Audiences of the Global Fintech-as-a-Service Platform Market Report: (Who Can Buy Our Report)
Global Fintech-as-a-Service Platform market consulting firms and research institutes
Industry Leaders & Companies aims to enter the Fintech-as-a-Service Platform market
Universities and students
Service providers, product providers, solution providers and other players in the Fintech-as-a-Service Platform market
Public bodies and associated private firms
People interested in learning about the Fintech-as-a-Service Platform market
The global fintech-as-a-service platform market is segmented based on end-use, technology, application, type, and region.
Based on end use, the global market segments are investment banking, retail banking, insurance, equity trading firms, hedge funds, and others. Insurance generated over 30% of the global market revenue in 2021 due to high applications from insurance companies to handle claims processing and risk assessment.
Based on technology, artificial intelligence and blockchain are the two most important global market segments. Blockchain is more widely used by maximum players. Over 28% of the global market was dominated by blockchain technology in 2021 due to its higher adoption by large-scale enterprises. Benefits associated with blockchain are expected to drive segment growth during the forecast period.
Based on application, the global market segments are compliance and regulation, KYC verification, and fraud monitoring. In 2021, compliance and regulatory support generated 31.9% of global market revenue driven by the increase in online customer support provided by financial institutions to upgrade customer service and streamline their operations.
Based on type, the global market is segmented into remittance, payments, personal loans, personal finance, and others. Payments held around 40.20% of global market revenue in 202 helped by the integration of AI technology and mobile-based payment methods instead of traditional banking.
Recent developments:
In July 2021, Railsbank technology, an API developer, raised around USD 70 million during a fundraising event held by Anthos Capital, a leading US-based investment firm. With the funds raised, the company aims to dive into the fintech-as-a-service sector and improve the customer experience with excellent solutions.
In July 2021, Rapyd Financial Network Ltd announced that they will buy the Iceland-based payment solution provider Valitor from Arion Bank. The transaction cost Rapyd industries $100 million. The acquisition is expected to enable customers from various industries to integrate omnichannel payments with complete streamlining. It will also help consumers expand into new markets, unlocking revenue and growth potential while flattening foreign exchange fees.
In April 2022, the United States Agency for International Development (USAID) launched a digital investment program to mobilize private capital to help digital finance alongside internet providers in developing economies. This program aims to promote competition combined with progress in the use of secure network equipment, while reducing the digital gender divide through inclusive, secure and affordable digital services.
In July 2022, Finalis, a US-based investment banking platform that enables private market participants to execute deals with full compliance, managed to raise USD 10.7 million through seed funding with the help of various venture capital firms, namely The Fund, Chaac Ventures, ANIMO Ventures, Ulu Ventures and Tribe Capital. The capital raised is expected to fuel the expansion of Finalis while helping to develop a technologically advanced deal-making platform.
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Global Fintech-as-a-Service Platform Market Regional Analysis
North America is projected to dominate the global fintech-as-a-service platform market due to the presence of several players in this region. In the US, 9 out of 10 citizens use FaaS platforms for their financial transactions. The proportion of consumers in the US grew by 88% in 2021 compared to 58% in 2020, according to Plaid’s survey published in Fortune. The 105 fintech unicorns in this region account for more than 45% of global fintech unicorns. Such figures are an indication of the potential this region has for global market growth.
Asia-Pacific region may also register high revenues mainly driven by India being claimed to be the region with the highest adoption rate in 2021. This is driven by excellent government initiatives to drive the fintech market in the Indian territory while helping them to improve the global team that is expected to drive regional growth in the coming years.
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