A new study from Juniper Research forecasts that global BaaS (Banking-as-a-Service) platform revenue will grow by 158% by 2028.
Juniper Research estimates that BaaS platform revenue generated from account/card issuing and transaction fees will grow to $94 Billion Globally by 2028, up from $36.4 billion this year.
Furthermore, revenues in the segment are growing much faster than earlier predicted. In 2022, Juniper Research forecast that the total BaaS platform revenue would rise from $11 billion in 2022 to $38 billion only by 2027. Thus, current growth rates significantly exceed an impressive predicted level of 240%.
The firm, which specializes in fintech market research, believes that the main expansion will come from API deployment across eCommerce and freelance platforms. Connecting consumers to innovative financial tools, these deployments will unlock additional revenue streams for BaaS providers.
At the same time, the cost of compliance for BaaS providers will rise as enhanced KYC (Know Your Customer) processes increase the scope of compliance programmes. Therefore, smaller fintech companies might find it more challenging to succeed in the BaaS space.
The report highlights that BaaS platforms are one possible way to boost financial inclusion. They can cater to the financial needs of gig workers and freelancers with specialised banking products tailored to users with irregular income streams, such as short-term loans.
“Financial inclusion is driven by accessibility, and BaaS helps serve specific industries or demographics overlooked by traditional banks’ all‑encompassing approach. This allows businesses to stand out and focus on being inclusive to their specific audience; driving growth,” said research author Daniel Bedford.
Last year’s survey among European SMEs revealed that over half of European business leaders expect BaaS to ultimately substitute traditional banking. The most sought-after BaaS products were identified as foreign exchange (48%), Buy Now, Pay Later (48%), SME lending (47%), and loyalty schemes (46%).
