Open Banking Market Size
Open Banking Market size was worth USD 20.2 billion in 2022 and is expected to grow at a rate of CAGR 20.5% during the period 2023-2032. Increasing demand for digital banking is driving the growth of the market. Advanced technologies facilitate innovation, drive operational efficiency, improve customer experience, increase market reach, support data-driven decision-making, facilitate collaboration, and drive industry transformation. Embracing and utilizing these developments are crucial for organizations to remain competitive and maintain sustainable growth in the fast-changing business environment.
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Open banking is a model where third-party financial service providers are permitted to access customer banking information, subject to the consent of the customer, through Application Programming Interfaces (APIs) offered by incumbent banks. Open banking facilitates increased collaboration, innovation, and competition in the financial services sector. Open banking is based on collaboration between incumbent banks, fintech startups, technology providers, and regulators. Incumbent banks serve as custodians of data, whereas fintech companies use the data to create innovative products.
| Report Attribute | Details |
|---|---|
| Base Year | 2022 |
| Open Banking Market Size in 2022 | USD 20.2 Billion |
| Forecast Period | 2023 to 2032 |
| Forecast Period 2023 to 2032 CAGR | 20.5% |
| 2032 Value Projection | USD 122.1 Billion |
| Historical Data for | 2018 - 2022 |
| No. of Pages | 300 |
| Tables, Charts & Figures | 274 |
| Segments covered | 300 Financial Services, Deployment Model, and Distribution Channel |
| Growth Drivers |
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| Pitfalls & Challenges |
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What are the growth opportunities in this market?
The more we depend on digital identification, the more careful we must be about how we safeguard our privacy and secure our data. As much of our personal data now exists and gets exchanged in a digital format, we need good security to safeguard against data loss and identity theft. Rules imposed by the government regarding privacy and fear of individuals' data misuse can render the use of open banking difficult. Additionally, there are no pre-established rules or standards for open banking, something that can limit various systems' compatibility. Various industries, businesses, and regions have their own regulations and practices, and it's difficult to build one universal digital identity process that can be used across the board. This absence of rules can hinder the utilization of open banking and make it less effective.
COVID-19 Impact
The COVID-19 pandemic has hastened the need for open banking as consumers & businesses have looked for digital alternatives, personalized financial management options, remote offerings, and new products. The pandemic hastened digitalization in many sectors such as banking and finance. Legacy banks were pushed to accelerate their digital plans and adopt open banking to improve their online offerings and provide innovative products to customers. The growing use of contactless payments and the demand for easy & accessible financial services pushed the adoption of open banking, which steered the future direction of the financial sector.
Open Banking Market Trends
Data-driven insights are used to refer to the use of customer financial information to drive insights and deliver personalized financial services. Open banking combined with data-driven insights can facilitate personalized customer interaction. By understanding customer preferences and financial needs, financial service providers can deliver targeted offers, notifications, and alerts, enhancing the overall customer experience & engagement. Data-driven insights in the market enable the development of personalized financial management tools, targeted product recommendations, risk assessment, fraud detection, enhanced customer engagement, regulatory compliance, and continuous improvement.
Hey there! Open banking is getting increasingly popular, and it's attracting all kinds of new entrants. It's not banks anymore – fintech startups, tech giants, payment firms, and even non-financial companies are entering the fray. Why the hurry? Well, for starters, there are simply more companies entering the fray. And they're not just staying in their own corners – they're collaborating and sharing ideas. This equals more services in a broader sense, not only in one nation but around the world. And with emerging technologies such as AI and blockchain being thrown into the picture, things can only get better. And guess what? It doesn't only help the companies. You, the client, get more customized financial services designed just for you. Banks and firms are forced to innovate and collaborate, creating a more competitive and vibrant financial universe.
Open Banking Market Analysis
Discover more about the major segments influencing this market
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The banking & capital market segment held more than 30% of the open banking market share in 2022. Drivers such as compliance with regulatory requirements, infrastructure & customer base, improved customer experience, innovation & partnership, access to capital & investment, expansion of markets, and security & trust are fueling the growth of the banking & capital market segment. This segment introduces credibility, professionalism, and extensive financial services to the open banking space, advancing its overall growth.
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Bank channel segment represented 25% of the open banking market share during 2022 due to pre-existing customer relations, trust & credibility, awareness & education, open APIs integration, opportunities to cross-sell & upsell, compliance, and the rendering of value-added services. Participants in the open banking ecosystem derive their capabilities, customer base, and infrastructure supporting the usage of open banking services.
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North America open banking market share of more than 30% in 2022. North America has a strong fintech ecosystem with strong fintech and technology companies that are interested in financial innovation. These fintech as a service provider companies use open banking to create new products & services like digital wallets, personal finance apps, and investment platforms.
The existence of a successful fintech industry bolsters the region's open banking growth. Open banking regulations in North America, including the Canadian Consumer Data Right (CDR) and prospective open banking rule implementation in the U.S., are driving market size. Such regulatory measures foster competition, innovation, and consumers' rights over data, an environment conducive to open banking uptake.
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Open Banking Market Share
Major companies operating in the open banking market are
- Finicity (Mastercard)
- Plaid
- Tink
- Yodlee (Envestnet)
- MuleSoft (Salesforce)
- Virtusa Corp.
- Tibco Software
- F5, Inc
- TCS
- Worldline S.A.
- Capgemini
- Oracle
- Accenture.
These companies are focused on strategic partnerships, new product launches, and commercialization efforts for market expansion. They are also heavily investing in research to introduce innovations and garner the maximum market revenue.
Open Banking Industry News
- In July 2023, Fintonic launched OpenInsights to promote open banking data analytics. It specializes in designing advanced open banking services and data analytics for companies & financial entities.
This open banking market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Million) from 2018 to 2032, for the following segments
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Market, By Banking Services
- Banking & capital markets
- Payments
- Digital currencies
- Value-added services
Market, By Deployment Model
- On-premises
- Cloud
- Hybrid
Market, By Distribution Channel
- Bank channel
- App market
- Distributors
- Aggregators
The above information has been provided for the following regions and countries
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Netherlands
- Asia Pacific
- China
- India
- Japan
- South Korea
- ANZ
- Southeast Asia
- Latin America
- Brazil
- Mexico
- Argentina
- MEA
- South Africa
- UAE
- Saudi Arabia
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