Banking-as-a-Service Has Become a $37 Billion Industry
The global banking-as-a-service (BaaS) market reached $37 billion in 2024, according to Allied Market Research. The market is growing at 25% per year and is projected to exceed $74 billion by 2028. BaaS platforms allow any company — from a ride-sharing app to an accounting software provider — to offer banking products like deposit accounts, debit cards, and loans without obtaining a banking licence. The technology and regulatory infrastructure are provided by the BaaS platform, while the non-bank company provides the customer relationship and distribution.
McKinsey estimates that BaaS-distributed financial products will account for 15% of total banking revenue by 2030. That shift represents hundreds of billions of dollars moving from traditional banking channels to embedded, platform-distributed financial services. The growth in digital banking customers is accelerating this trend, as more consumers interact with financial services through non-bank interfaces.
How BaaS Platforms Work
A BaaS platform sits between a licensed bank and a non-bank company that wants to offer financial products. The licensed bank provides the regulatory infrastructure — the banking charter, deposit insurance, and compliance framework. The BaaS platform provides the technology — APIs for account creation, card issuance, payment processing, and lending. The non-bank company provides the customer-facing interface and distribution.
In practice, this means a company like Shopify can offer business bank accounts to its 2 million merchants without becoming a bank. Shopify Balance, powered by BaaS infrastructure, provides deposit accounts, debit cards, and cash flow tools integrated directly into the Shopify admin dashboard. The merchant never interacts with the underlying bank — the experience is entirely Shopify-branded. Fintech revenue growing at 23% annually includes significant contributions from BaaS platforms that enable these kinds of embedded financial products.
Major BaaS Providers
The BaaS market includes both fintech companies and banks that have built platform capabilities. On the fintech side, Unit, Treasury Prime, Bond, and Synctera provide technology platforms that connect non-bank companies to licensed banking partners. Unit, for example, powers banking features for more than 200 companies and has processed billions in transactions since launch.
On the bank side, several institutions have built BaaS as a core business line. Column Financial, a US-chartered bank, was built specifically to operate as a BaaS provider. Cross River Bank powers financial products for companies including Stripe, Affirm, and Coinbase. In the UK, ClearBank provides BaaS infrastructure for more than 200 fintech companies. In Germany, Solarisbank operates as a fully licensed BaaS platform serving companies across the EU. The 30,000 fintech companies operating worldwide include both BaaS providers and the companies that use BaaS to distribute financial products.
Regulatory Scrutiny Is Increasing
US banking regulators have increased their scrutiny of BaaS arrangements following several high-profile failures. In 2024, the FDIC issued consent orders against multiple banks involved in BaaS partnerships, citing inadequate oversight of their fintech partners. The collapse of Synapse Financial, a BaaS middleware provider, left thousands of customers unable to access their deposits and prompted Congressional hearings on the risks of BaaS models.
Regulators are not trying to shut down BaaS — they are trying to ensure that the banks providing the regulatory infrastructure maintain proper oversight of how their licences are used. The Office of the Comptroller of the Currency has published guidance requiring banks in BaaS arrangements to maintain the same level of compliance oversight for fintech-distributed products as they do for their own direct products. This regulatory tightening is raising the bar for BaaS providers but also creating a more sustainable market by eliminating poorly run operations.
The Future of BaaS
BaaS is evolving beyond simple product distribution. The next generation of BaaS platforms offers full-stack financial infrastructure — not just accounts and cards but also lending, insurance, investment, and compliance tools, all accessible through APIs. This comprehensive approach allows non-bank companies to build complete financial ecosystems for their customers without managing multiple vendor relationships.
Fintech venture funding has grown more than 10x in the past decade, and BaaS infrastructure has attracted a significant share. The companies that build reliable, compliant, and comprehensive BaaS platforms will become the invisible backbone of financial services — powering banking products that millions of customers use daily without ever knowing which bank or technology provider sits behind them.
