Market Trends of US Banking-as-a-Service Industry
This section covers the major market trends shaping the US Banking-as-a-Service Market according to our research experts:
The Increasing Digital Banking Adoption in US is Driving the Market
BaaS can assist non-banking and fintech organizations in providing online banking services to their clients. They may concentrate on improving their services rather than worrying about bank licenses, regulatory regulations, and other integrations. For their customers, these user-friendly and technologically advanced products provide a better option than traditional banking. With the use of the Banking-as-a-Service, non-banking organizations such as airlines can also offer their customers digital banking services such as mobile bank accounts, debit cards, loans, and payment services, without needing to acquire a banking license of their own, and instead, they can focus on their other core businesses. This increased digital banking adoption by other non-banking organizations in the United States is driving the market for the Banking-as-a-Service industry.
United States is Leader in Open Banking and Open Finance API Adoption
To diversify their revenue streams, banks might use APIs to share data with third-party financial organizations. According to the Cash-free Payment blog, 43% of banks prefer the BaaS model, which allows them to collect fees every API transaction. The BaaS approach benefits fintech companies by allowing them to launch their businesses faster and increasing client trust. Customers trust banks to look after their financial well-being over time, therefore fintech companies partner with banks to capitalize on this confidence and grow their customer base. The Financial Data Exchange (FDX) has announced that its FDX API is currently being used by 16 million North American users for open banking and open finance data exchange.
