Almost 9 in 10 senior executives surveyed in APAC are already implementing BaaS solutions or are planning to in the next 12-18 months.
Finastra has published a market assessment report ‘Banking as a Service: Outlook 2022 | Paving the way for Embedded Finance’, which canvassed the opinions of 1,600 senior industry executives, exploring the opportunities presented by Banking-as-a-Service (BaaS).
BaaS allows financial institutions to provide retail or wholesale banking products and services to customers in context, as a service, using an existing licensed institution’s secure, regulated infrastructure with modern API-driven platforms.
The Finastra research reveals that APAC’s appetite for BaaS services exceeds that of EMEA and the Americas.
Across APAC, 88% of senior executives in a number of sectors (including banking, healthcare, retail and technology) said they are already implementing BaaS solutions or are planning to, compared with 80% in EMEA and 87% in the Americas.
Other key findings include:
- Globally, 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.
- Over 46% of APAC distributors currently offer, or plan to offer, credit cards to their customers using Banking-as-a-Service, with other popular offerings including savings accounts (41%) and payment cards (38%).
- In APAC, distributors are spending US$10-$50m per year on financial products and service, a high level of spending which is expected to be sustained throughout 2022.
- BaaS represents a $7 trillion opportunity – distributors, including retailers, e-commerce firms and other consumer brands, are migrating towards BaaS solutions and expect overall growth to exceed 70% per year over the next three years globally; 60-70% of distributors want to increase their spending on financial partnerships (including BaaS)
- The top four key capabilities financial services need to work with distributors, enables and to monetize BaaS includes: an open API platform, an integrated data and analytics platform, specialized digital solutions, and dynamic and compelling offering from a product perspective.
Check out this infographic for more research findings.