Latin America Banking as a Service Platform Industry Outlook for 2023 and 2033

The banking as a service platform business size in Latin America is set to reach US$ 831.01 million in 2023. Demand for banking as a service platform solutions in Latin America is projected to surge at a CAGR of 21.8%, taking the total valuation to US$ 5,985.84 million by 2033.

Attributes Key Insights
Base Value, 2022 US$ 697.60 million
Estimated Latin America Banking as a Service Platform Size, 2023 US$ 831.01 million
Projected Value, 2033 US$ 5,985.84 million
Value CAGR (2023 to 2033) 21.8%

Banking-as-a-service (BaaS) platform, a technology-driven solution, is witnessing a higher demand across Latin America. This is because it allows businesses, including fintech companies and non-banking entities, to access and utilize banking services and infrastructure through APIs (Application Programming Interfaces).

BaaS platforms provide a modular and scalable approach, enabling businesses to integrate banking functionalities into their applications or systems without their banking infrastructure. By leveraging BaaS platforms, companies can offer various banking services such as account management, payments, lending, and card issuance, enhancing their product offerings.

BaaS platforms streamline the integration of banking services. By doing this, they enable businesses to focus on their core competencies while relying on the platform's banking infrastructure and capabilities.

BaaS platforms enable non-banking entities, such as e-commerce platforms, marketplaces, or consumer apps, to embed financial services within their offerings. This includes seamlessly integrating payment processing, lending, or other financial functionalities into their platforms.

BaaS platforms can empower neobanks and challenger banks to launch their services quickly by leveraging the existing banking infrastructure provided by the platform. Neobanks can focus on building user interfaces and customer experiences while relying on the BaaS platform for core banking services.

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Other Drivers Propelling the Demand for Latin America Banking as a Service Platforms

  • Growing consumer preference for online banking and digital financial solutions is expected to drive demand for banking as a service (BaaS) platforms in Latin America.
  • The rise of innovative fintech solutions is advancing traditional banks to collaborate with BaaS platforms for enhanced product offerings.
  • Favorable regulatory environments and government initiatives are encouraging the growth of BaaS in Latin American countries.
  • Financial institutions in Latin America are embracing BaaS to enhance operational efficiency, reduce costs, and achieve scalability in providing innovative financial services.
  • BaaS platforms are crucial in advancing financial inclusion efforts by enabling more accessible access to banking services for underserved populations in Latin America.
  • Rising acceptance of Application Programming Interfaces (APIs).
  • Increase in the use of online payment systems brought about by digitalization has driven the rise in digital wallets and mobile payment applications for BaaS platforms.

Challenges in the Latin America Banking as a Service Platform Business

  • Increasing incidence of online fraud and cyberattacks
  • Data security, financial privacy, and standardization Of APIs
  • Insufficient digital infrastructure in some areas of Latin America challenges the widespread adoption of Banking as a Service (BaaS) platforms. 
  • Heightened concerns about cybersecurity and data privacy hinder the rapid adoption of BaaS solutions as users and institutions are cautious about potential vulnerabilities.
  • Government regulation and restrictions can limit the scope of banking as a service platform in Latin America.
  • Diverse and evolving regulatory landscapes create complexity and compliance challenges for BaaS providers, impacting their operations and expansion.
  • The absence of standardized protocols and interoperability frameworks in the Latin American banking sector limits seamless integration and collaboration between financial institutions and BaaS platforms.
  • Traditional banking institutions may need help adopting BaaS models, slowing the transition due to cultural and organizational challenges in embracing innovative financial technologies.
Sudip Saha
Sudip Saha

Principal Consultant

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Opportunities in the Latin America Banking as a Service Platform Industry

  • Significant segments of the Latin American population remain underserved, presenting a substantial growth opportunity for banking as a service (BaaS) platforms to expand financial inclusion. 
  • Opportunities for cross-border partnerships and collaborations between BaaS providers and financial institutions can foster regional integration and enhance the efficiency of financial services in Latin America.
  • The increasing acceptance of fintech platforms in Latin America allows BaaS platforms to collaborate with innovative startups and offer advanced financial services.
  • Identifying and catering to niche markets, such as micro-enterprises and small businesses, allows BaaS providers to tailor their offerings and capture specific segments.

Latest Trends in the Latin America Banking as a Service Platform Business

  • Latin American countries are witnessing a growing trend of embracing open banking frameworks, facilitating collaboration and interoperability among financial institutions and Banking as a Service (BaaS) platforms.
  • Increasing interest in blockchain technology for enhancing security and transparency is a notable trend, addressing data integrity and privacy concerns.
  • BaaS providers in Latin America are placing a heightened emphasis on improving user experience, leveraging advanced technologies like artificial intelligence to offer personalized and seamless financial services.
  • BaaS platforms are forming strategic partnerships with fintech startups, traditional banks, and other stakeholders to create comprehensive financial ecosystems that cater to diverse needs.
  • BaaS platforms in Latin America incorporate green banking practices, such as digital-only services and reduced paper usage, aligning with global ecological goals.

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2018 to 2022 Latin America Banking as a Service Platform Demand Outlook Vs. 2023 to 2033 Forecast

From 2018 to 2022, the banking as a service platform business experienced a CAGR of 16.0%. It attained a total valuation of  US$ 697.60 million at the end of 2022. This was due to increased demand for BaaS, rapid digitalization, regulatory backing, and a thriving fintech ecosystem.

During this time, an increasing number of customers and financial institutions adopted BaaS solutions. This is due to their ease, cost-effectiveness, and ability to promote financial inclusion. Recognizing the revolutionary potential of BaaS, regional governments established open banking programs and promoted the integration of digital financial services.

Future Forecast for Latin America Banking as a Service Platform Business

Over the forecast period, the banking as a service platform business in Latin America is expected to rise at a CAGR of 21.8%. Total sales in the region are expected to reach US$ 5,985.84 million by 2033.

The demand for BaaS platforms in Latin America is improving significantly. New developments in digital infrastructure, continuous regulatory backing, and the maturation of the fintech ecosystem will drive long-term growth.

The anticipated timeframe will most likely see rapid adoption of BaaS as financial institutions prioritize technological innovation to remain competitive. Collaboration between traditional banks and fintech firms will likely increase, resulting in a more robust and linked financial environment.

Semi Annual Update

The table presents the expected CAGR of Latin America banking as a service platform business over several semi-annual periods spanning from 2022 to 2033. In the first half (H1) of the decade from 2022 to 2032, the business is predicted to surge at a CAGR of 15.9%, followed by a slightly higher growth rate of 16.1% in the second half (H2) of the same decade. Moving into the subsequent period, from H1 2023 to H2 2033, the CAGR is projected to increase to 21.7% in the first half and remain relatively moderate at 21.9% in the second half.

Particular Value CAGR
H1 15.9% (2022 to 2032)
H2 16.1% (2022 to 2032)
H1 21.7% (2023 to 2033)
H2 21.9% (2023 to 2033)

Country-wise Insights

Increasing Alliances and Joint Ventures in Finance Industry Driving Demand in Mexico

The banking as a service platform in Mexico is projected to surge at a CAGR of 24.0% through 2033. Mexico's notable fintech industry expansion will likely impact the BaaS sector. Fintech firms increasingly offer cutting-edge financial services by collaborating with conventional banks or by offering BaaS solutions on their own.

Mexico's regulatory framework has a significant impact on the BaaS sector. Regulation revisions or modifications may affect the uptake and advancement of BaaS systems. It is essential to be updated with the regulatory landscape that oversees financial services in Mexico.

Fintech startups, technology businesses, and conventional banks frequently collaborate on BaaS projects. Like many other nations, Mexico is committed to enhancing financial inclusion. BaaS platforms can help achieve this objective by offering cutting-edge and easily accessible financial services.

Category-wise Insights

The table below highlights growth projections of top segments in Latin America banking as a service platform business. Based on solution, the banking as a service platform segment is set to lead the business during the assessment period, thriving at a CAGR of 21.5% through 2033. Based on enterprise size, the small and mid-sized organizations segment is set to showcase a significant CAGR of 22.6% through 2033.

Several Financial Institutions Across Latin America Prefer Banking as a Service Platforms

Solution Value CAGR
Banking as a Service Platform 21.5%
Banking as a Service APIs 23.0%
Services 20.4%

The adoption of banking as a service (BaaS) platforms in Latin America has witnessed significant momentum, and the trend is expected to continue through 2033. Growing number of financial institutions are actively participating in this transformative trend, collectively contributing to the segment's leading share.

Traditional banks, recognizing the potential for innovation and enhanced service delivery, are increasingly embracing BaaS models. This is because these BaaS models help them to streamline their operations, reduce costs, and offer a broader array of digital financial services.

As per the latest analysis, the banking as a service platform segment is projected to grow at 21.5% CAGR during the assessment period. It will likely hold a dominant share of 45.3% by the end of 2033.

Small and Mid-Sized Organizations Remain Leading Users of BaaS Platforms

Organization Size Value CAGR
Small and Mid-sized Organizations 22.6%
Large Organizations 21.2%

The emerging growth of small and mid-sized organizations has increased the development potential for an important trend in today's business scene. Smaller businesses are discovering new options for expansion and innovation as technology advances become more integrated.

Small and medium-sized businesses, which are generally known for their agility and adaptability, are embracing digital tools and technology to compete on a larger scale. This is driving demand for BaaS platforms in these businesses.

The developing ecosystem of fintech solutions, such as digital payment systems and banking as a service (BaaS) platforms, is lowering the barriers to entry for small and mid-sized financial enterprises. These firms can now access sophisticated financial services without requiring extensive infrastructure, allowing them to concentrate on core capabilities and growth goals.

The global shift toward remote work has given smaller firms the freedom to access talent pools beyond geographical boundaries, boosting innovation and diversification. As a result, the target segment is set to thrive at a CAGR of 22.6% over the forecast period.

Competitive Landscape

Leading firms are focusing on providing tailored banking-as-a-service platform options to meet the specific needs of their clientele. Businesses may have an accurate, cost-effective, and efficient data infrastructure that meets their demands using this approach.

Recent Developments the Latin America Banking as a Service Platform Business

  • In August 2022, Cuenca partnered with MasterCard to offer loans to millennials and centennials in Mexico. This partnership represents a new journey for Cuenca as it continues to provide fast, reliable, convenient, and safe digital financial services for everyone in Mexico.
  • In January 2023, Dock, a financial technology infrastructure innovator in Latin America, launched Dock One. This integrated cloud-based platform for banking and payments allows companies to quickly scale business operations anywhere in the world by offering financial services enablement to their customers.
  • In October 2021, EBANX acquired Juno, a Brazilian fintech company that provides banking services to small and medium-sized businesses. The acquisition will allow EBANX to offer its merchants a broader range of services, including digital accounts, payments, and collections.

Key Strategies Adopted by the Players

  • Product Innovation

Companies investing in research and development create cutting-edge banking as a service platform solution that offers improved efficiency, security, and scalability. They are incorporating technologies like AI and cloud integration into their solutions to meet evolving needs of customers.

  • Strategic Partnerships and Collaborations

Companies form strategic partnerships and collaborations with other technology companies, cloud service providers, and local businesses.

  • Expansion into Emerging Regions

Leading players often expand their business into emerging regions. This diversification allows them to tap into new customer bases and support businesses in emerging economies with their banking as a service platform services.

  • Mergers and Acquisitions

Companies in the banking as a service platform business are implementing mergers and acquisitions to expand their offerings and acquire new technologies and customer bases. Vendors are developing smaller banking-as-a-service platforms to expand their presence or merge with competitors to consolidate their position. These strategic moves help vendors gain a share and access new capabilities.

Scope of Report

Attribute Details
Estimated Business Value (2023) US$ 831.01 million
Projected Business Value (2033) US$ 5,985.84 million
Anticipated Growth Rate (2023 to 2033) 21.8%
Historical Data 2018 to 2022
Forecast Period 2023 to 2033
Quantitative Units Revenue in US$ million, Volume in ‘000 Units, and CAGR from 2023 to 2033
Report Coverage Revenue Forecast, Volume Forecast, Company Ranking, Competitive Landscape, Growth Factors, Trends and Pricing Analysis
Segments Covered Solution, Organization Size, End User, Region
Key Companies Profiled Alau Technologies SAU; Banco Sabadell SA; Bicecrop SA; Creditjusto; Creditas; Cuenca Tecnologia Financiera SA de CV; DOCK; EBANX; GIRE SA; Klar SA de CV; Maximo Pay SAC

Latin America Banking as a Service Platform Business Segmentation by Category

By Solution:

  • Banking as a Service (BaaS)
  • Banking as a Service APIs
    • Core banking APIs
    • Lending APIs
    • Card Issuance APIs
    • Payment Gateways APIs
    • KYC APIs
  • Services
    • Payment Processing Services
    • Digital Banking services
    • KYC Services
    • Customer Support Services

By End User:

  • Banks
  • Fintech corporation
  • Investment firms
  • Enterprise
  • Others

By Organisation Size:

  • Small and Mid-sized Organizations
  • Large Organizations

By Region:

  • Mexico
  • Brazil
  • Argentina
  • Chile
  • Peru
  • Colombia
  • Venezuela
  • Rest of Latin America

Frequently Asked Questions

How big is the banking as a service platform business in Latin America?

The business is set to reach US$ 831.01 million in 2023.

What is the demand outlook for BaaS platforms in Latin America?

Demand for BaaS platforms is set to rise at 21.8% CAGR through 2033.

Which end-user will dominate the BaaS platform business in Latin America?

Banks will hold a dominant revenue share through 2033.

What is the predicted valuation in 2033?

Latin America BaaS platform business is set to reach US$ 5,985.84 million in 2033.

Which enterprise size is estimated to show promising growth?

Small and mid-sized organizations are estimated to show promising growth.

What are BaaS providers in Latin America?

Alau Technologies SAU, Banco Sabadell SA, and Bicecrop SA are key vendors.

Table of Content
1. Executive Summary
    1.1. Industry Outlook
    1.2. Demand Side Trends
    1.3. Supply Side Trends
    1.4. Analysis and Recommendations
2. Business Overview
    2.1. Coverage / Taxonomy
    2.2. Definition / Scope / Limitations
3. Key Trends
4. Pricing Analysis
    4.1. Software Pricing Models
        4.1.1. Subscription-based
        4.1.2. Perpetual Licenses
5. Background
    5.1. Macro-Economic Factors
    5.2. Forecast Factors - Relevance and Impact
    5.3. Value Chain
    5.4. COVID-19 Crisis - Impact Assessment
        5.4.1. Current Statistics
        5.4.2. Short-Mid-Long Term Outlook
        5.4.3. Likely Rebound
    5.5. Key Dynamics
        5.5.1. Drivers
        5.5.2. Restraints
        5.5.3. Opportunities
6. Business Industry Analysis 2018 to 2022 and Forecast 2023 to 2033, By Solution
    6.1. Introduction / Key Findings
    6.2. Historical Size (US$ million) Analysis By Solution, 2018 to 2022
    6.3. Current and Future Size (US$ million) Analysis and Forecast By Solution, 2023 to 2033
        6.3.1. Power Systems
        6.3.2. Banking as a Service APIs
        6.3.3. Services
            6.3.3.1. Payment Processing Services
            6.3.3.2. Digital Banking Services
            6.3.3.3. KYC Services
            6.3.3.4. Customer Support Services
            6.3.3.5. Current Accounts Management
            6.3.3.6. Loyalty and Rewards
            6.3.3.7. Others
                6.3.3.7.1. Credit Card/Debit Card Payments
                6.3.3.7.2. Digital Lending Services
                6.3.3.7.3. Compliance Reporting
    6.4. Attractiveness Analysis By Solution
7. Industry Analysis 2018 to 2022 and Forecast 2023 to 2033, Organization Size
    7.1. Introduction / Key Findings
    7.2. Historical Size (US$ million) Analysis By Type, 2018 to 2022
    7.3. Current and Future Size (US$ million) Analysis and Forecast By Type, 2023 to 2033
        7.3.1. Small and Mid-sized Organizations
        7.3.2. Large Organizations
    7.4. Attractiveness Analysis By Type
8. Business Analysis 2018 to 2022 and Forecast 2023 to 2033, By End User
    8.1. Introduction / Key Findings
    8.2. Historical Size (US$ million) Analysis By End User, 2018 to 2022
    8.3. Current and Future Size (US$ million) Analysis and Forecast By End User, 2023 to 2033
        8.3.1. Banks
        8.3.2. FinTech Corporation
        8.3.3. Investment Firms
        8.3.4. Enterprises
        8.3.5. Others
    8.4. Attractiveness Analysis By End User
9. Industry Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country
    9.1. Introduction / Key Findings
    9.2. Historical Size (US$ million) Analysis By Country, 2018 to 2022
    9.3. Current and Future Size (US$ million) Analysis and Forecast By Country, 2023 to 2033
        9.3.1. Mexico
        9.3.2. Brazil
        9.3.3. Argentina
        9.3.4. Chile
        9.3.5. Peru
        9.3.6. Colombia
        9.3.7. Venezuela
        9.3.8. Rest of Latin America
    9.4. Attractiveness Analysis By End User
10. Structure Analysis
    10.1. Industry Analysis by Tier of Companies
    10.2. Industry Share Analysis of Key Vendors
11. Competition Analysis
    11.1. Competition Dashboard
    11.2. Competition Deep Dive
        11.2.1. Business Overview
        11.2.2. Solution Portfolio
        11.2.3. Key Partners/Client Footprint
        11.2.4. Industry Coverage
        11.2.5. Go-To-Market Approach and Strategies
        11.2.6. Recent Developments (Partnerships, Mergers)
    11.3. Major Hardware Vendors in Latin America:
        11.3.1. Banco Inter SA
        11.3.2. Alau Technology SAU
        11.3.3. Banco Sabadell SA
        11.3.4. BICECORP SA
        11.3.5. Credijusto
        11.3.6. Creditas
        11.3.7. Cuenca Tecnología Financiera SA de CV
        11.3.8. DOCK
        11.3.9. EBANX
        11.3.10. GIRE SA
        11.3.11. Inteligencia en Finanzas
        11.3.12. Klar SA de CV
        11.3.13. Maximo Pay SAC
        11.3.14. MEXARREND
        11.3.15. BBVA API
        11.3.16. Nu Holdings Ltd
        11.3.17. Rappi Inc
        11.3.18. Revolut Ltd
        11.3.19. Servicios Broxel SAPI de CV.
12. Assumptions and Acronyms Used
13. Research Methodology
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