PriyaPatelTLDR:
- Latin America’s Banking as a Service market is projected to reach $2 billion in 2024.
- The growth is driven by the increasing demand for digital banking services in the region.
In Latin America, businesses are adopting Banking-as-a-Service (BaaS) to quickly scale financial services in the digital economy. The market is expected to surpass $2 billion this year, with further growth forecasted in the next five years. The rise in digital payments post-COVID-19 has led to a surge in online banking adoption, making fintech firms key players in the region’s financial sector. Neobanks, fintech startups, and non-financial enterprises are expanding their digital banking capabilities to cater to this growing market demand.
The growth of BaaS in Latin America is heavily influenced by the booming fintech industry in the region. Fintech companies, which rely on access to the interbank system, are among the primary users of BaaS services. Market research suggests that large organizations account for over 50% of the demand, but smaller companies, particularly small and medium-sized enterprises, stand to benefit significantly from simplified access to financial services through BaaS.
Brazil, a key player in the region, is set to introduce regulations for Banking-as-a-Service in 2024. The country has witnessed a surge in digital payment transactions, driven by initiatives like the instant payment system Pix. The regulator is developing a framework for BaaS as part of its financial innovation agenda. Despite the market’s current size being relatively small compared to other regions, experts anticipate sustained growth, primarily fueled by the fintech industry.
