UK Banking-as-a-Service-Market Market Size (2024 - 2029)

The UK banking-as-a-service market is experiencing significant growth, driven by the increased adoption of digital banking services, particularly among medium and small-sized enterprises. The pandemic has accelerated the need for a comprehensive digital transformation in the banking sector, enhancing customer experiences through improved digital journeys. As the largest market in Europe, the UK benefits from a robust presence of BaaS platform providers, contributing to its substantial market share. The integration of advanced technologies such as Artificial Intelligence, Blockchain, and API Banking is further propelling the market, offering innovative solutions that enhance efficiency and reduce costs for banks and service providers. This transformation is reshaping the banking landscape, emphasizing personalization and improved customer interactions.

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Market Size of UK Banking-as-a-Service-Industry

uk banking-as a service market size
Study Period 2020 - 2029
Base Year For Estimation 2023
Forecast Data Period 2024 - 2029
Historical Data Period 2020 - 2022
CAGR 7.50 %
Market Concentration Medium

Major Players

uk banking-as a service market share

*Disclaimer: Major Players sorted in no particular order

Banking as a Service in UK Market Analysis

Due to Covid-19, Demand for BaaS platforms increased in medium and small-sized enterprises as there is a rise in an adaption of digital banking services across several domains in UK. The pandemic is likely to spur a widespread and systematic revamping of high-impact digital journeys in the banking sector, such as customer onboarding and product origination, to deliver a truly outstanding digital experience to their customers.

Banking-as-a-service in Europe growing at a significant rate and is expected to grow 3 times in the next few years, United Kingdom is the largest market for banking-as-a-service (BaaS) platforms due to the strong presence of banking-as-a-service (BaaS) platform providers and accounts for approximately 25% of Europe's market share. The changing landscape of the banking and financial services business has led end-users to adopt innovative digital banking solutions that offer ease and efficiency while lowering costs for banks and other service providers, resulting in market growth. The current wave of digital transformation is being driven by newer technologies such as Artificial Intelligence, Robotic Process Automation, Blockchain, API Banking, and Internet of Things which have the potential to dramatically alter the banking landscape. These technologies, when harnessed together, will be able to provide much deeper levels of personalization and enhanced customer experience, transform the banking operations, changing the very essence of how the banking industry operates today.

Banking as a Service in UK Industry Segmentation

BaaS Market is an end-to-end model that allows digital banks and other third parties to connect with banks' systems directly via APIs so they can build banking offerings on top of the providers' regulated infrastructure, as well as unlock the open banking opportunity, reshaping the global financial services landscape. UK Banking-As-A-Service Market is segmented by Component (Platform and Service (Professional Service and Managed Service)), by Type (API based BaaS and Cloud-based BaaS), by Enterprise Size (Large enterprise and Small & Medium enterprise), and by End-user (Banks, NBFC/Fintech Corporations and Others).

By Component
Platform
Service
Professional Service
Managed Service
By Product Type
API based BaaS
Cloud-based BaaS
By Enterprise Size
Large enterprise
Small & Medium enterprise
By End-User
Banks
NBFC/Fintech Corporations
Others
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UK Banking-as-a-Service-Market Size Summary

The UK Banking-as-a-Service (BaaS) market is experiencing significant growth, driven by the increasing adoption of digital banking services, particularly among medium and small-sized enterprises. The pandemic has accelerated the need for digital transformation in the banking sector, prompting a revamp of digital journeys such as customer onboarding and product origination. The UK stands as the largest market for BaaS in Europe, accounting for a substantial portion of the continent's market share. This growth is fueled by the integration of advanced technologies like Artificial Intelligence, Robotic Process Automation, Blockchain, API Banking, and the Internet of Things, which are reshaping the banking landscape by enhancing customer experience and operational efficiency. The demand for embedded finance, particularly in retail, is also on the rise, with the UK leading in the adoption of embedded lending models, allowing consumers to finance purchases more conveniently.

The market is moderately consolidated, with major players dominating but mid-size and smaller companies increasing their presence through technological advancements and product innovations. APIs play a crucial role in facilitating digital transitions for banks, enabling FinTechs and third-party service providers to offer seamless and customized financial services. The large enterprises segment holds a significant market share, driven by the need for reliable service platforms and automation capabilities. Partnerships and collaborations, such as those between PEXA and ClearBank, and Paysafe and Bankable, are further expanding the BaaS offerings, indicating a dynamic and evolving market landscape.

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UK Banking-as-a-Service-Market Market Size - Table of Contents

  1. 1. MARKET INSIGHTS AND DYNAMICS

    1. 1.1 Market Overview

    2. 1.2 Market Drivers

    3. 1.3 Market Restraints

    4. 1.4 Market Opportunities

    5. 1.5 Industry Attractiveness- Porter's Five Forces Analysis

      1. 1.5.1 Threat of New Entrants

      2. 1.5.2 Bargainning Power of Buyers

      3. 1.5.3 Bargainning Power of Suppliers

      4. 1.5.4 Threat of Substitutes

      5. 1.5.5 Intensity of Competative Rivalry

    6. 1.6 Insights into Latest Technological Innovations and Recent Trends in the Industry

    7. 1.7 Consumer Buying Behaviour Analysis

    8. 1.8 Insights on Government Regulations in the Industry

    9. 1.9 Impact of COVID-19 on the Market

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Component

      1. 2.1.1 Platform

      2. 2.1.2 Service

        1. 2.1.2.1 Professional Service

        2. 2.1.2.2 Managed Service

    2. 2.2 By Product Type

      1. 2.2.1 API based BaaS

      2. 2.2.2 Cloud-based BaaS

    3. 2.3 By Enterprise Size

      1. 2.3.1 Large enterprise

      2. 2.3.2 Small & Medium enterprise

    4. 2.4 By End-User

      1. 2.4.1 Banks

      2. 2.4.2 NBFC/Fintech Corporations

      3. 2.4.3 Others

UK Banking-as-a-Service-Market Market Size FAQs

The UK Banking-as-a-Service Market is projected to register a CAGR of greater than 7.5% during the forecast period (2024-2029)

Thought Machine, Starling Bank, Bankable, 11:FS Foundry and ClearBank are the major companies operating in the UK Banking-as-a-Service Market.

UK Banking as a Service Market Report Snapshots

UK Banking as a Service Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)