Open Banking Market by Services (Banking & Capital Markets, Digital Currencies, Payments), Deployment (Cloud, On-Premise), Distribution Channel - Global Forecast 2024-2030

Open Banking Market by Services (Banking & Capital Markets, Digital Currencies, Payments), Deployment (Cloud, On-Premise), Distribution Channel - Global Forecast 2024-2030

The Open Banking Market size was estimated at USD 22.57 billion in 2023 and expected to reach USD 26.67 billion in 2024, at a CAGR 18.63% to reach USD 74.66 billion by 2030.

Open banking is a novel banking practice that involves the provision of open access to consumer banking, transactions, and other important financial data from banks and non-bank financial institutions through the utilization of application programming interfaces (APIs) to third-party financial service providers. The primary aim of open banking is to increase innovation in the realm of the financial services industry, thereby offering consumers more options, enhanced service quality, and better rates. The increasing need for financial transparency and tailored banking services, regulatory mandates promoting financial data sharing, and global efforts to enhance customer experiences have led to significant demand for open banking services and solutions. Additionally, the growing adoption of mobile banking and payment platforms fosters further market expansion. However, the lack of standardization across banking APIs and varying degrees of regulatory support for open banking across diverse geographical locations hampered the growth of the industry. Additionally, concerns and issues related to data privacy and security can also pose significant hurdles to achieving customer trust and satisfaction. However, key players are exploring cybersecurity measures in API integration, developing uniform API standards, and investigating blockchain's role in open banking to improve the security and privacy features of open banking. The advent of A.I. and machine learning can be harnessed for insights into customer behavior, risk management, and personalized product recommendations, thereby creating new revenue streams.

Regional Insights

The Americas region, particularly the U.S. and Canada, is characterized by the presence of a robust banking, financial services, and insurance(BFSI) sector, which has driven several advancements in the realm of open banking. Consumer's need for seamless financial experiences has propelled banks and fintech companies to create partnerships voluntarily. Customer purchasing behavior indicates a trend toward mobile banking solutions and personalized financial products. The E.U. is a pioneer in regulating open banking, with Payment Services Directive Two (PSD2) being a significant legislative framework promoting banking data portability and innovation. It has led to the rise of numerous third-party providers (TPPs), creating a competitive environment that caters well to consumer needs for transparency and diversified financial services. E.U. consumers are increasingly adopting digital wallets and peer-to-peer payment systems, pushing the market towards more collaborative banking practices. Additionally, the presence of several established regulations pertaining to digital privacy and financial security has created a highly standardized and robust environment for the growth of open banking. The APAC region supports several government initiatives and supports to improve the BFSI sector, which creates growth opportunities for open banking services or solutions. The Unified Payments Interface (UPI) by the Indian government has advanced the payment space. Investments and research are primarily directed towards scalability to manage the massive volume of transactions while ensuring system stability. Many nations such as Singapore, China, and Japan are publishing guidelines for open banking and outlining plans to make bank data available through APIs, thereby signaling new avenues for the growth of the industry.

Market Insights

Market Dynamics

The market dynamics represent an ever-changing landscape of the Open Banking Market by providing actionable insights into factors, including supply and demand levels. Accounting for these factors helps design strategies, make investments, and formulate developments to capitalize on future opportunities. In addition, these factors assist in avoiding potential pitfalls related to political, geographical, technical, social, and economic conditions, highlighting consumer behaviors and influencing manufacturing costs and purchasing decisions.

Market Drivers

Increasing use of online and mobile payment platforms
Potential demand attributed to centralized services and rapid access to financial procedures
Increasing demand for financial transparency and tailored banking services

Market Restraints

Concern regarding low customer credibility

Market Opportunities

Emergence of big data analytics and AI in the banking sector
Significant growth in the adoption of e-commerce platforms

Market Challenges

Concerns associated with online fraud and cyber attacks

Market Segmentation Analysis

Services: Expansion of smartphones and mobile-based applications leading to the adoption of digital currencies
Distribution Channel: Expansion of bank channels across the world owing to government support and initiatives

Market Disruption Analysis

Porter’s Five Forces Analysis
Value Chain & Critical Path Analysis
Pricing Analysis
Technology Analysis
Patent Analysis
Trade Analysis
Regulatory Framework Analysis

FPNV Positioning Matrix

The FPNV positioning matrix is essential in evaluating the market positioning of the vendors in the Open Banking Market. This matrix offers a comprehensive assessment of vendors, examining critical metrics related to business strategy and product satisfaction. This in-depth assessment empowers users to make well-informed decisions aligned with their requirements. Based on the evaluation, the vendors are then categorized into four distinct quadrants representing varying levels of success, namely Forefront (F), Pathfinder (P), Niche (N), or Vital (V).

Market Share Analysis

The market share analysis is a comprehensive tool that provides an insightful and in-depth assessment of the current state of vendors in the Open Banking Market. By meticulously comparing and analyzing vendor contributions, companies are offered a greater understanding of their performance and the challenges they face when competing for market share. These contributions include overall revenue, customer base, and other vital metrics. Additionally, this analysis provides valuable insights into the competitive nature of the sector, including factors such as accumulation, fragmentation dominance, and amalgamation traits observed over the base year period studied. With these illustrative details, vendors can make more informed decisions and devise effective strategies to gain a competitive edge in the market.

Recent Developments

Landsbankinn Partners Meniga to Launch Open Banking-powered PIS and AIS Services

Landsbankinn has embarked on a pioneering venture into open banking by establishing a strategic partnership with the UK's prominent digital banking technology specialist, Meniga. This collaboration heralds the launch of pioneering Payment Initiation Services (PIS) and Account Information Services (AIS), revolutionizing how customers interact with their finances.

Atomic Launches New Open Banking Tool Called PayLink

Atomic launched PayLink, a revolutionary suite designed to simplify the transition of recurring payments, enhancing user experience without compromising personal security. Leveraging TrueAuth technology, the innovation tokenizes account login attempts, enabling users to seamlessly update payment details for services like Netflix directly from their banking apps without divulging sensitive information.

IFC and Philippine Central Bank Pave the Way for Banking Transformation with Launch of Open Finance PH Pilot

The Bangko Sentral ng Pilipinas (BSP), in concert with support from the International Finance Corporation (IFC) and the World Bank (WB), has inaugurated the Open Finance PH Pilot, a transformative initiative designed to foster financial inclusivity and enhance collaboration within the financial sector. The Pilot provides a platform for BSP-Supervised Financial Institutions (BSFIs) to voluntarily contribute to creating an interoperable and scalable framework, enabling consumers to exert greater control over their financial data and seamlessly access diverse financial offerings.

Strategy Analysis & Recommendation

The strategic analysis is essential for organizations seeking a solid foothold in the global marketplace. Companies are better positioned to make informed decisions that align with their long-term aspirations by thoroughly evaluating their current standing in the Open Banking Market. This critical assessment involves a thorough analysis of the organization’s resources, capabilities, and overall performance to identify its core strengths and areas for improvement.

Key Company Profiles

The report delves into recent significant developments in the Open Banking Market, highlighting leading vendors and their innovative profiles. These include Alkami Technology Inc., Amplify Platform. by TrillerNet, Banco Bilbao Vizcaya Argentaria, S.A. by PNC Financial Services, Bud Financial, Cashfree Payments India Private Limited, Codat Limited, Cross River Bank, Crédit Agricole CIB, DirectID, Finastra, Fincity by Mastercard, Flinks, GoCardless Ltd., Jack Henry & Associates, Inc., M2P Solutions Private Limited, Minna Technologies AB, Nubank, Plaid Inc. by Visa, Railsbank Technology Ltd., Salt Edge, Stitch, Stripe, Inc., Token.io Ltd., TrueLayer Ltd., and Yodlee by Envestnet.

Market Segmentation & Coverage

This research report categorizes the Open Banking Market to forecast the revenues and analyze trends in each of the following sub-markets:

Services
Banking & Capital Markets
Digital Currencies
Payments
Value Added Services
Deployment
Cloud
On-Premise
Distribution Channel
Aggregators
App Market
Bank Channel
Region
Americas
Argentina
Brazil
Canada
Mexico
United States
California
Florida
Illinois
New York
Ohio
Pennsylvania
Texas
Asia-Pacific
Australia
China
India
Indonesia
Japan
Malaysia
Philippines
Singapore
South Korea
Taiwan
Thailand
Vietnam
Europe, Middle East & Africa
Denmark
Egypt
Finland
France
Germany
Israel
Italy
Netherlands
Nigeria
Norway
Poland
Qatar
Russia
Saudi Arabia
South Africa
Spain
Sweden
Switzerland
Turkey
United Arab Emirates
United Kingdom

Please Note: PDF & Excel + Online Access - 1 Year