According to research by Finastra, a financial solutions company, Banking as a Service (BaaS) is growing exponentially in the Asia Pacific (APAC) region. They discovered that BaaS in APAC represented a $7 trillion USD opportunity for the region in its recently published Banking as a Service: Outlook 2022 – Paving the way for Embedded Finance report, , with many distributors, financial technology (fintech) companies, and others adopting BaaS solutions in their businesses.

The report gathered information from 1,600 finance industry executives who highlighted the potential impact of Banking as a Service in APAC on businesses and the entire financial services ecosystem. The players in the sector include financial institutions taking the role of providers, followed closely by the enablers, which are BigTech and fintech companies that integrate financial solutions into third-party platforms and apps. The remaining players are the distributors, which are industry brands that provide embedded financial solutions to consumers.

Fintech trends in Southeast Asia show that companies migrating to BaaS are expected to grow at a rate of more than 70% per year globally over the next three years. According to current fintech trends, approximately  60-70% of distributors want to increase their spending on financial partnerships. These collaborative approaches can improve the customer experience by innovating new solutions for the marketplace.

Appetite for BaaS solutions

According to Finastra’s report, APAC has a greater appetite for BaaS than the rest of the world. Currently, 88% of senior executives in various industries have implemented or plan to implement banking as a service solution. The figure in the Americas is 87%, while Europe, the Middle East, and Africa (EMEA) are at 80%, indicating that APAC is ahead of the curve. Enablers (50%) are already  at an advanced stage of integrating BaaS, followed by Providers (42%), and Distributors (33%).


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Each of these players has its own vision for Banking as a Service. Providers or financial institutions want to provide specialised digital solutions, a data analytics platform, and compelling products. Enablers seek scalable and secure platforms, specific sector expertise, as well as digitisation and integration. Distributors, on the other hand, want access to marketplaces, to provide an exceptional customer experience, and to collaborate with the rest of the players.

However, poor integration issues and an unpleasant user experience are among the stumbling blocks preventing BaaS from dominating the financial sector.  There are significant challenges, such as integrating providers and addressing a lack of product diversification. The regulatory environment is always a cause for concern, either due to a lack of adequate laws or the presence of stifling laws that prevent the financial sector from thriving.

Future opportunities

There will be $3.6 trillion USD  new market opportunities by 2030. Embedded insurance, embedded lending, and embedded payments will be at the forefront of financial solutions. Small and medium-sized enterprises (SMEs) generate over $250 billion USD in market revenue, but it is expected that BaaS revenues will increase by 30% by 2024. Moreover, more than a third of BaaS providers anticipate an increase in revenue from their offerings of more than 15% per year.

BigTech and fintech companies, as well as other Enablers, believe the sector will grow by more than 50%. Almost half of the respondents in the BigTech and fintech sectors want to collaborate with distributors. Institutions can now reach more customers at lower costs, while distributors can connect with people and create new revenue streams. They can use the analytics features of the BaaS solutions to collect customer data.

Over 46% of APAC distributors intend to offer credit cards to their customers through the use of Banking as a Service features. Savings accounts and payment cards are also popular options.

According to David Palmer, Head of Digital Asset Broker Product at Vodafone, the Internet of Things (IoT) will be connected to approximately 60 billion devices by 2025. This means the market will create an opportunity for BaaS startups to monetise the problem and design solutions to IoT challenges.

Finally, accounting firm Deloitte’s Banking and Capital Markets Outlook 2022 report demonstrate another revenue stream for BaaS startups to make money: green energy. By reducing emissions, Southeast Asia could generate approximately $12.5 trillion USD. Green products are also in high demand across the board. As a result, by providing climate-friendly solutions, BaaS could bring these issues together.


The fintech trends in Southeast Asia indicate that this sector will grow as more people innovate and form new startups to compete in the marketplace. According to Finastra’s research, 80% of regulated financial services companies anticipate development, with another 30% anticipating that the BaaS in APAC landscape will grow by more than half over the next five years.

Southeast Asia benefits from a growing population of people who are tech-savvy and have access to smartphones. Banking as a Service in APAC will revolutionise multiple sectors in the region, with evolving fintech trends highlighting its potential to develop and provide integrated financial services to consumers.