Banking as a Platform Market Revenue to boost by 2028, according to Juniper Research

Global revenue from Banking as a Platform services will increase to 49 billion USD globally in 2028, from 4 billion in 2023, according to a new study from Juniper Research.

The study argued BaaP can help traditional banks regain their competitive edge against neobanks.

Through collaboration with innovative vendors, banks can offer new services from partners, including embedded insurance, lifestyle offers with leading brands, or access to HR services for small businesses.

What Is Banking-as-a-Platform?

Juniper Research defines Banking-as-a-Platform as:

A business model that enables third-party partners to build products and services for bank customers, most commonly a technology company that can provide APIs while the bank manages data exchange, oversees authentication and ensures compliance.

Banks can utilise partnerships with industry leaders to build upon their core banking model; helping them compete with fintechs by offering more user-friendly services.

Compared with traditional acquisitions, BaaP partnerships are highly flexible and can be easier to integrate, as banks transition to API-focused models.

By offering a wide range of services via BaaP, banks can gain a competitive edge without having to stray from their core business.

Digital Banks Must Capitalise on BaaP Marketplaces

According to the report, banking marketplaces are the most effective way for banks to adapt to the digital age; helping them create financial services ecosystems that offer personalised customer experiences, without developing services themselves.

For example, Revolut has extensively expanded its lifestyle offerings in-app; creating its own ecosystem of services, without taking on the costs traditional banks have faced in expanding services.

In turn, customers benefit from innovative solutions that are tailored to their needs; increasing satisfaction and improving the stickiness of their banking relationships.

Juniper Research recommends banks evaluate which services are core, and which services can be replaced by working with innovative third parties; enabling banks to improve services being offered, while reducing costs in a difficult economic climate.