New Banking Models Are Opening Markets That Did Not Exist a Decade Ago
Banking innovation generated $245 billion in new revenue opportunities in 2024, according to Boston Consulting Group’s Global Financial Services Report. These opportunities span embedded finance, banking-as-a-service, open banking, and real-time payment infrastructure — categories that barely existed before 2015. The common thread is that fintech-driven banking platforms are making it possible to offer financial services in contexts and to customers that traditional banks never reached.
Embedded finance alone is projected to generate $230 billion in revenue by 2028, according to Lightyear Capital. Companies like Shopify, Uber, and Amazon now offer banking products — loans, payments, deposit accounts — directly within their platforms. They do this by connecting to banking infrastructure provided by fintech companies like Stripe Treasury, Unit, and Bond.
Banking-as-a-Service Is Expanding the Market
Banking-as-a-service (BaaS) platforms allow non-bank companies to offer regulated financial products without obtaining their own banking licence. The global BaaS market reached $37 billion in 2024, according to Allied Market Research, and is growing at 25% per year. This model has created financial opportunities for both the platform providers and the companies that use them.
In the United States, companies like Synapse, Column, and Lead Bank provide the regulated infrastructure that allows fintechs to launch deposit accounts, issue debit cards, and originate loans. In Europe, Solarisbank and Railsbank serve a similar function. The model works because it reduces the time and cost to launch financial products from years and tens of millions of dollars to weeks and a few hundred thousand dollars. Fintech revenue is growing at 23% annually, and BaaS is one of the fastest-growing segments within that figure.
Open Banking Creates New Revenue Streams
Open banking regulations in the EU, UK, Australia, and Brazil have created a new category of financial services built on shared account data. More than 7 million UK consumers now use open banking-connected apps, according to the Open Banking Implementation Entity. These apps aggregate accounts, automate savings, optimise bill payments, and provide credit assessments based on real transaction data rather than credit scores alone.
For banks, open banking creates both threats and opportunities. Banks that build strong API platforms can generate fee income from third-party developers who access their data and payment rails. BBVA, for example, earns revenue from its Open Platform, which provides APIs to more than 60 partner companies. Banks that resist open banking risk losing customer engagement to aggregator apps that offer better visibility across multiple financial relationships.
Real-Time Payments Are Changing Commerce
Real-time payment systems now operate in more than 70 countries, according to FIS Global. India’s UPI, Brazil’s Pix, and the EU’s SEPA Instant are processing billions of transactions monthly. These systems create opportunities for businesses that can build services on top of instant payment rails — from point-of-sale financing to real-time invoice settlement.
Brazil’s Pix system processed 42 billion transactions in 2024, up from 29 billion in 2023, according to the Central Bank of Brazil. The system has reduced the country’s dependence on cash and card networks, lowering payment costs for small businesses by an estimated 30%. Fintech companies that integrate with real-time payment rails are building new products — including instant lending, micro-insurance, and loyalty programs — that were not possible with batch-processed payment systems.
Who Benefits Most
The biggest financial opportunities from banking innovation are going to three groups. First, fintech infrastructure companies — the “picks and shovels” providers — that sell technology to banks and non-bank companies. Second, non-financial companies that embed banking products into their existing customer relationships. Third, consumers in emerging markets who gain access to financial services for the first time through fintech platforms.
Traditional banks are not excluded, but they need to move faster. Fintech venture funding has grown more than 10x in the past decade, and the companies receiving that capital are building the infrastructure on which the next generation of banking will run. The $245 billion in new revenue that banking innovation created in 2024 is just the beginning of a structural shift in how financial services are designed, delivered, and monetised.
