Banking-as-a-Service Aggregators: Are Embedded Finance Platforms the Next Roll-Up Theme?

In 2024 alone, embedded finance transactions globally reached an estimated US$7 trillion in annualised volume, encompassing payments, deposits, credit, and insurance services embedded directly into non-financial platforms. With industry forecasts pointing to sustained, structural growth, the race to build scalable financial infrastructure and secure ecosystem access has intensified.  

The embedded banking market alone is projected to expand from approximately US$24.8 billion in 2025 to US$182.9 billion by 2035, representing a compound annual growth rate exceeding 22%. In parallel, embedded finance transactions in the United States are expected to reach US$7 trillion by 2026, underscoring the rapid shift of financial services away from traditional bank-centric distribution models. 

The next phase of embedded finance will not be defined solely by product innovation, but by who controls regulated balance-sheet access, developer distribution, and compliance infrastructure at scale. 

This shift has profound implications for how the sector consolidates. Increasingly, Banking-as-a-Service (Baas) aggregators are emerging as natural consolidation vehicles, positioning embedded finance as a potential roll-up theme comparable to what occurred in cloud infrastructure, payments processing, and enterprise software platforms over the last decade. 

From Embedded Features to Financial Infrastructure Control 

Embedded finance initially gained traction by improving customer experience. Platforms reduced friction by integrating payments, lending, or wallets directly into commerce, SaaS, and marketplace workflows. That phase delivered rapid adoption, but it also exposed structural limits. 

As volumes scaled, platform operators encountered constraints tied to licensing, compliance, settlement risk, and capital efficiency. These constraints are not easily solved through incremental product iteration. They require ownership or orchestration of regulated financial infrastructure. 

BaaS platforms sit precisely at this intersection. Providers such as Galileo Financial Technologies, a subsidiary of SoFi Technologies, deliver account issuance, payment processing, and ledgering capabilities to fintechs and enterprises across North America. Marqeta, headquartered in Oakland, has built global card-issuing and tokenisation infrastructure serving companies like Block and Uber. These platforms abstract regulatory and banking complexity, but more importantly, they centralise control over financial rails. 

As embedded finance matures, platforms that rely on fragmented vendor stacks face rising costs and operational fragility. This dynamic increasingly favours aggregation. 

Why Consolidation Economics Are Strengthening 

Three structural forces are reinforcing the consolidation thesis across embedded finance infrastructure. 

Regulatory fixed costs are rising faster than revenue per customer, as compliance requirements across KYC, AML, consumer protection, and data governance are expanding across jurisdictions. Firms that can spread these costs across thousands of clients gain a durable unit-economics advantage. Smaller providers struggle to maintain margins without scale or acquisition. 

Distribution has become developer-driven rather than brand-driven: BaaS platforms that embed deeply into developer workflows, SDKs, and orchestration layers benefit from high switching costs and long revenue tails. Stripe Treasury, for example, leverages Stripe’s existing developer ecosystem to extend financial account functionality to platforms globally, reinforcing distribution leverage that is difficult to replicate organically. 

Balance-sheet access is becoming strategic, not commoditised: As credit, deposits, and interest-bearing products become embedded, platforms must coordinate closely with sponsor banks. Aggregators that manage multiple bank relationships and risk frameworks can optimise capital usage and pricing, creating advantages unavailable to single-bank or single-product providers. 

Together, these dynamics reward platforms that expand horizontally through acquisition rather than vertically through isolated product launches. 

Evidence of an Emerging Roll-Up Pattern 

While embedded finance consolidation remains in its early stages, tangible signals are already visible across the ecosystem. 

Among infrastructure startups, acquisition interest has intensified around API-first platforms that hold regulatory licenses or have deep bank integrations. In India, firms such as Setu and Decentro have become critical connective layers between banks and fintech applications, positioning them as natural targets for consolidation by larger payment processors and financial software providers. 

M2P Fintech, based in Chennai, has developed a comprehensive BaaS stack encompassing cards, lending, and payments, serving banks and fintechs across Asia and the Middle East. Its strategy reflects a deliberate move toward breadth in infrastructure rather than single-product specialisation. 

Fiserv and FIS continue to expand their embedded finance capabilities through platform extensions and acquisitions. At the same time, global banks such as JPMorgan Chase have deepened partnerships with data aggregators and fintech platforms to secure distribution and data access across embedded use cases. 

Although not explicitly labelled as roll-ups, these moves reflect classic consolidation behaviour driven by infrastructure economics. 

Why Embedded Finance Is Uniquely Suited to Aggregation 

Not all fintech segments are suitable for roll-up strategies. Embedded finance does, for three reasons. 

Technical modularity enables integration at speed: APIs, microservices, and standardised compliance workflows reduce post-acquisition integration risk relative to traditional financial services M&A. 

Customer overlap is limited across verticals: A BaaS platform serving a logistics marketplace does not displace one serving a healthcare SaaS provider. Aggregation expands addressable markets without eroding existing revenue. 

Regulatory approvals compound in value: Each acquired license, bank partnership, or jurisdictional approval increases the strategic optionality of the platform, raising barriers to entry for competitors. 

These characteristics create conditions where acquisition synergies are operationally real, not merely financial in nature. 

Strategic Implications for Executives and Investors 

For executives operating in or adjacent to the embedded finance sector, the implications are immediate. 

Platforms must decide whether they aim to become aggregators or acquisition candidates. Remaining in a subscale while regulatory and capital demands increase is an increasingly fragile position. 

Banks evaluating BaaS strategies should recognise that distribution and developer mindshare matter as much as balance sheet strength. Owning the customer interface is less critical than owning the infrastructure layer that others depend on.  

For investors, valuation frameworks must adjust. Revenue growth alone is insufficient. The defensibility of compliance systems, bank relationships, and the depth of orchestration will increasingly determine long-term value creation. 

Conclusion: The Infrastructure Layer Becomes the Battleground 

Embedded finance is entering a phase where infrastructure ownership matters more than surface-level innovation. As regulatory intensity rises and scale economics sharpen, Banking-as-a-Service aggregators are emerging as the natural consolidators of the ecosystem. 

The fragmentation visible today masks an underlying convergence toward fewer, more powerful infrastructure platforms. Those that successfully aggregate licenses, bank access, compliance systems, and developer distribution will shape how financial services are embedded across the global digital economy.