Research from Finastra has revealed almost 85% of respondents are already implementing or planning to implement Banking-as-a Service (BaaS) over the next 12-18 months.
Its Banking as a Service: Outlook 2022: Paving The Way For Embedded Finance report, based on the opinions of 1,600 senior industry executives, revealed more than 80% of regulated financial services providers expect the overall BaaS market to grow. Of these, 30% expect it to grow by more than 50% per year over the next five years.
Angus Ross, Chief Revenue Officer, Banking as a Service at Finastra, said: “There’s no doubt that BaaS is an incredibly exciting opportunity for the entire financial services ecosystem. Financial institutions can reach a greater number of customers at significantly lower cost, while distributor brands can open up new lines of revenue and build deeper relationships with their customers.
“It’s clear from our research that consumers (retail or corporate) are changing where they source financial services and shifting to non-bank channels. This trend will only accelerate as integrating regulated products into the customer journey becomes as simple as creating a social media account.”
The majority of enablers, including bigtechs and fintechs, expect the overall BaaS market to grow by more than 50% over the next five years. Some 40-50% of enablers want to increase their partnerships with distributors and financial services providers by more than 50% in the next five years.