" class="no-js "lang="en-US"> 89% of European brands will rely on BaaS providers to unlock €297bn in embedded banking revenues - Fintech Finance
Wednesday, May 29, 2024

89% of European brands will rely on BaaS providers to unlock €297bn in embedded banking revenues

New data from OpenPayd, a leading global Banking-as-a-Service (BaaS) platform, spotlights an imminent embedded banking boom. While only 7% of large European companies offer embedded banking services today, 48% have specific plans to launch them in the next three years. 89% of those organisations will partner with BaaS providers to bring embedded banking services to market.

One in five (20%) UK-based firms offer embedded banking services today, a number set to climb to 67% in the next three years. In Germany, while only 3% of firms currently offer embedded banking services, that will rise to 69% in three years. 50% of Italian, 46% of French and 39% of Spanish companies all plan on offering embedded banking services in the next three years. The remainder report giving serious consideration to launching embedded banking services, but do not have specific plans in place. Critically, every firm surveyed had discussed the possibility.

European brands anticipate that embedded banking services will make a major contribution to year-on-year revenue growth. On average, organisations anticipate a 2% revenue bump in the first year, ramping to 16% growth in five years. In total, European firms expect embedded banking to generate €297bn in additional revenues over the next five years.

For nearly nine in 10 (89%) companies planning their launches, collaborating with a BaaS provider is the favoured route for building embedded banking products. Almost two thirds (65%) of these companies also intend on building new, internal fintech teams to work alongside them.

“European businesses that have embraced embedded banking services are already seeing the result. They’re experiencing material revenue growth and setting the pace for adoption”, said Barry O’Sullivan, Head of Payments and Banking infrastructure at OpenPayd.

“We’re also seeing a clear role emerging for BaaS providers as the enabler for embedded banking projects. That brings with it enormous opportunity and responsibility. It’s critical that BaaS providers are bringing the technology, the licences and the compliance oversight to ensure the success of their partners.”

The full report Embedded Finance in 2023 can be downloaded here.

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