Market Trends of UK Banking-as-a-Service-Industry
This section covers the major market trends shaping the UK Banking as a Service Market according to our research experts:
Demand for Embedded Finance is Driving Banking as a Service
Embedded finance revenue in Europe is about to reach USD 40,000 million in 2022, gaining demand among consumers due to the rising popularity of the buy now pay later lending model. the pandemic has also pushed the demand for embedded lending in crucial industry segments across European countries. Retailers in Europe are embracing new embedded finance offerings, with 56% of vendors launching new products in 2022. In comparison to other European countries, embedded lending is most widespread in the United Kingdom. The United Kingdom was one of the first countries to use embedded lending to finance purchases. Retail finance is seen as a simple way for shoppers in the United Kingdom to spread the expense of large purchases.
Adoption of Banking-as-a-Service Platform in Large Organizations is Boosting the BaaS Market
Application programming interfaces (APIs) have emerged as a lifesaving device for banks by simplifying their digital transitions and permitting swifter pivots and innovations. With API's intervention, FinTechs and other third-party service providers (TPSP) can help banks offer customers a transparent, smooth, and customized financial service along with the existing banking services. The fintechs are given secured access to banking services followed by integrating bank's APIs with the provider's products to further execute seamless white-label banking services using upgraded technology. This is further estimated to drive the BaaS platform sales in the coming years.The use of BaaS platforms in large organizations segment is more than in small and medium-sized enterprises, it accounts for more than 50% market share in Europe and is expected to continue its domination as it is increasing its customer base by investing in digital transformation to offer tech-savvy banking operations. The demand for BaaS platforms in the large enterprises' segment is anticipated to be driven by organizations' growing inclination for reliable service platforms and automation capabilities.
