Adaptable Platforms, Strong Alliances: BaaS consolidation in action

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Grab, merge, or unite – 2023 is fast becoming the year of consolidation in the Banking-as-a-Service (BaaS) realm.

It’s no surprise, really. The demand for agile and expandable infrastructures is at an all-time high in the fintech sector. And with technology evolving at warp speed, financial institutions are being pushed to think on their feet and embrace change. That’s where BaaS swoops in to save the day – offering a shortcut by providing off-the-shelf, adaptable, and secure platforms that can be swiftly deployed to unlock new revenue streams and customer experiences. 

Whether it’s about reaching greater heights economically or seizing opportunities to boost one’s market position, the trend of consolidation is undeniably upon us. The first half of 2023 is in full swing, with over ten strategic BaaS acquisitions already in the bag. We uncover the three key aspects shaping the BaaS consolidation wave and reveal the fascinating patterns emerging from this frenzy.

Adaptable Platforms, Strong Alliances: BaaS consolidation in action

1. Catalysts of the BaaS consolidation movement

The BaaS integration movement is being supercharged through strategic power plays as follows:

    • Velocity and versatility: In the race for survival, FIs and tech platforms recognize the need for speed and adaptability to satisfy customers and outpace the competition. By acquiring BaaS platforms, they can swiftly introduce innovative products and services, ensuring a speedy journey to market.

    • From core to more: Whether it be core banking systems, payment processing or compliance, these versatile BaaS platforms empower FIs to expand their services, reach untapped customer segments, and explore fresh avenues of revenue generation.

    • Digital makeover: In the quest to meet the expectations of tech-savvy customers, financial institutions are putting digital transformation at the forefront. Through strategic BaaS acquisitions, traditional players are revamping operations and simplifying processes to develop robust tech stacks that accelerate their digital journey.

2. BaaS buyers spearheading consolidation

The fintech industry is heating up as BaaS providers get snapped up left and right. The acquisitions so far in 2023, including notable examples such as:

    • Marqeta’s acquisition of fintech infrastructure startup Power

    • acquisition of banking application development startup Builder Bank by Central Bank-approved SCD QI Tech, and 

    • US-based Fifth Third Bank’s acquisition of embedded payment platform Rize Money

– all highlight the dominance of tech companies and banks in the BaaS consolidation trend. While tech companies are leveraging BaaS synergies to bring innovation, navigate regulations, and expand their respective fintech ecosystems, banks are using these partnerships to modernize their operations, simplify processes, and offer top-notch customer experiences. These acquisition trends are expected to create new power centres in the BaaS segment.

3. BaaS consolidation blurs geographical boundaries

The global wave of BaaS consolidation is breaking boundaries and expanding its reach. Exciting developments include Brazil’s Banco BV acquiring Bankly, Weavr’s acquisition of Comma Payments in the UK, and Bond’s acquisition by FIS in the US. These regions are emerging as frontrunners in the BaaS revolution.

Consolidation: To be continued…

Buckle up, folks! The BaaS consolidation trend isn’t slowing down anytime soon. After a whirlwind of global consolidation in the BaaS segment in the first half of 2023, we’re expecting this trend to keep its momentum throughout 2023. This consolidation is all about scaling up, enhancing capabilities, and delivering top-notch digital banking experiences. So, keep your eyes peeled for more exciting BaaS action in the coming months!


Founder & CEO | sanjeev@whitesight.net

Sanjeev is a fintech aficionado who loves to explore the depths of the industry as much as he loves to explore the depths of the ocean in his scuba gear. He is the founder and CEO at WhiteSight, bringing a wealth of research and advisory experience to the fintech world.

Senior Branding Associate

Kshitija is a senior branding associate at WhiteSight, crafting branding strategies and fintech content. When she's not conjuring up new ideas for the company, you can find her dabbling in new hobbies and documenting her experiences through writing and short films.

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