Global Open Banking Market - 2023-2030

Market Overview

Global Open Banking Market reached US$ 20.9 billion in 2022 and is expected to reach US$ 129.8 billion by 2030, growing with a CAGR of 25.7% during the forecast period 2023-2030.

The growth in digital payment systems has created huge opportunities for open banking to grow in the forecast period. The market is expanding due to the shifting payment ecosystem, rising e-commerce platform usage, better broadband access, and increasing application programming interface (API) acceptance.

Furthermore, payment gateway APIs are often used in open banking payments and are utilized by online businesses like Zelle, PayPal, and Venmo to conduct recurring billing leading to a boost in demand for the open banking market.

Furthermore, rapid technological advancements, including cloud computing, APIs, and secure data-sharing protocols, have made open banking more feasible and secure. These technological developments enable seamless integration and sharing of financial data, fostering the growth of open banking ecosystems. The technological advancements have improved the growth of cloud-based platforms thus making it more than 1/3rd share globally.

Market Dynamics

Rising Digital Payments Ecosystem

Digital payments offer convenience and speed, allowing consumers to transact anytime, anywhere. Open banking enhances this convenience by enabling users to initiate payments directly from their bank accounts through authorized third-party providers. This eliminates the need for traditional payment methods and offers a seamless payment experience.

Governments and companies are investing in improving the market share. For instance, regulatory initiatives, such as the Revised Payment Services Directive (PSD2) in Europe, have played a crucial role in boosting both digital payments and open banking. These regulations require banks to provide open access to customer data for authorized third-party providers, fostering competition, innovation, and the adoption of digital payment solutions.

Banking Collaborations for Data Analytics

Growing company collaborations have the potential to boost the Open Banking Market by fostering innovation, enhancing customer experiences, expanding into new markets, leveraging data-driven insights, and ensuring regulatory compliance. These collaborations create a symbiotic relationship between established financial institutions and nimble startups, driving the evolution and adoption of open banking in the financial services industry.

For instance, on May 2, 2023, Amplify Open Banking provider Axway announced a partnership with Envestnet Data and Analytics (D&A), a world leader in data aggregation and analytics, via Envestnet | Yodlee. Axway and Envestnet D&A provide consistent API access via the Financial Data Exchange standard, reducing the need for proprietary APIs.

Security and Data Privacy Concerns

Open banking involves the sharing of sensitive customer financial data with third-party providers. Security breaches, data mishandling, or unauthorized access to customer information can erode customer trust and confidence in open banking. Furthermore, the interconnected nature of open banking ecosystems presents potential vulnerabilities and cybersecurity risks.

Hackers and malicious actors may attempt to exploit weaknesses in APIs, data transmission channels, or data storage systems to gain unauthorized access to sensitive customer information. A high-profile data breach can have severe repercussions, damaging the reputation of banks, fintech companies, and other stakeholders involved in open banking. The fear of data breaches and cybersecurity risks hampers the growth of the open banking market.

COVID-19 Impact Analysis

The COVID-19 pandemic accelerated the adoption of open banking as individuals and businesses sought digital solutions for their financial needs. This shift has expanded the market and created new opportunities for innovation and collaboration among traditional banks, fintech firms, and other financial service providers.

The pandemic created opportunities for the open banking market to expand into new areas. For example, there was an increased demand for digital lending and credit-scoring solutions as individuals and businesses faced financial hardships. Open banking data and advanced analytics enabled lenders to assess creditworthiness more accurately and offer tailored lending solutions.

Segment Analysis

The Global Open Banking Market is segmented based on service, deployment, distribution channel and region.

Growing Bank's Investments On Digital Transformation Initiatives And Upgrading Their Technology Infrastructure

Banking & Capital Markets are expected to grow significantly in the global open banking market. Open banking aligns with the broader digital transformation trend in the banking industry. Traditional banks are investing in technology upgrades, modernizing their infrastructure, and improving digital capabilities.

Open banking catalyzes this transformation, enabling banks to offer seamless digital experiences, modernize legacy systems, and leverage emerging technologies like artificial intelligence and machine learning to deliver innovative financial services. These various banks use open banking as a vital source for their growth.

For instance, on July 08, 2022 , Union Bank of India announced the introduction of the Metaverse Virtual Lounge and Open Banking Sandbox environment at a Mumbai event. The Union Bank of India has introduced the Open Banking Sandbox environment, whereby it will work with Fin Techs and Start-Up partners to create and introduce cutting-edge banking solutions. Sandbox environments give developers and financial technology companies a platform on which to realize their ideas.

Geographical Analysis

Europe's Growing Need For Improved Online Payment Security.

Europe has shown significant growth in the global open banking market and countries like the UK and Germany are expected to contribute up to 54.4% of the regional revenue. TUK has been a pioneer in open banking and has made substantial investments in its implementation. The Open Banking Implementation Entity (OBIE) was established to oversee open banking rollout in the UK.

Furthermore, UK's nine largest banks must provide open access to customer data through APIs. The Competition and Markets Authority (CMA) and the Financial Conduct Authority (FCA) have played key roles in driving open banking adoption and fostering competition and innovation in the financial sector. Germany has adopted open banking, driven by regulatory initiatives such as PSD2. The country has seen the emergence of several fintech companies offering innovative solutions based on open banking principles.

Competitive Landscape

The major global players include: Banco Bilbao Vizcaya Argentaria S.A, Plaid Inc., TrueLayer Ltd, Finleap Connect, Finastra, Tink, Jack Henry & Associates, Inc, Mambu, MuleSoft and NCR Corporation.

Why Purchase the Report?

• To visualize the Global Open Banking market segmentation based on service, deployment, distribution channel and region and understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous open banking market-level data points with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as Excel consisting of key products of all the major players.

The Global Open Banking Market Report Would Provide Approximately 61 Tables, 58 Figures And 217 pages.

Target Audience 2023

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies