Digital banking and challenger banks saw tremendous growth in 2019. From startup funding and user growth, to billion-dollar valuations, the banking market is thriving.
Revolut, a UK based digital banking app expanded into new markets, drastically increased the size of their team, and has grown to at least 8 million users. N26, a German-based challenger bank, raised $470 million in 2019 valuing the company at $3.5B. Marqeta, an API-based card issuing platform, became one of the top 25 largest payment card issuers in the U.S., issuing their 140 millionth card in December. Chime, a leading challenger banking app in the US, announced they have reached 5 million users, and they are integrated into The Bancorp’s BaaS platform.
A direct result of these success stories is the rise of Banking as a Service (BaaS).
Strategic partnerships also played an important role in the growth of this market and will continue to do so in 2020. Ron Shevlin recently stated in a Forbes article:
“Ironically, the winning banking (and fintech) strategy for the new decade isn’t walling off customers with “moats”—it’s creating service bridges and data tunnels to other providers of services (both financial and non-financial). The winners will be the banks and fintechs that define identifiable segments of the market, figure out that segment’s unique needs, and serve them.”
What Mr. Shevlin stated is so true. While BaaS providers had a great 2019, to continue their growth and success for the long term, integrating with other banks and fintechs is vital. Here at Hydrogen, we understand the importance of this which is why we play the role of the “BaaS enabler”, meaning we integrate with numerous BaaS providers, add orchestration, and make it easy for any organization to quickly build banking applications.
To learn more, we’ve recently published a report called, “BaaS to the Future: The Rise of Banking as a Service (BaaS) in Fintech” which you can download for free by clicking the button below.
In this report we cover:
- An overview of the BaaS market;
- BaaS use cases;
- Global activities broken down by regions;
- Key players;
- Market trends; and
- Where Hydrogen fits into the BaaS ecosystem
To get your free copy of the report, click on the button below.