Global API Banking Market Size, Share & Industry Trends Analysis Report By Component (Solution and Service), By Deployment (On-premise and Cloud), By Enterprise Size, By Regional Outlook and Forecast, 2023 - 2030

Global API Banking Market Size, Share & Industry Trends Analysis Report By Component (Solution and Service), By Deployment (On-premise and Cloud), By Enterprise Size, By Regional Outlook and Forecast, 2023 - 2030

The Global API Banking Market size is expected to reach $131.7 billion by 2030, rising at a market growth of 24.2% CAGR during the forecast period.

Numerous people access their bank accounts through mobile browsers or smartphones. As smartphone adoption increases, more individuals will use digital banking in the near future, increasing the requirement for a platform solution among banks. The North America region acquired $9,344.4 million in 2022, as a result of digitization of banking, regulatory initiatives, FinTech partnerships, and customer-focused solutions. To capitalize on the opportunities presented by this changing landscape, businesses in this region are employing strategies like API marketplaces, developer outreach programs, standardization efforts, and secure API management.

The major strategies followed by the market participants are Product launches as the key developmental strategy to keep pace with the changing demands of end users. For instance, In February, 2023, Oracle Corporation announced the launch of new services for demand deposit account processing. These include Oracle Banking Accounts Cloud Service, Oracle Banking Payments, and Oracle Banking Enterprise Limits and Collateral Management Cloud. Additionally, In November, 2022, Razorpay Software Private Limited announced the launch of RazorpayX Digital Lending 2.0, a digital lending solution that works in compliance with RBI guidelines. The solution features a full-stack lending suite for automated money transfers.

Based on the Analysis presented in the KBV Cardinal matrix; Google LLC is the forerunner in the Market. In March, 2022, Google LLC introduced Google Cloud Contact Center AI Platform, an extension to its Contact Center AI end-to-end solution. The features of the new extension include compatibility with Android and iOS, multiple channel management, AI-driven customer needs prediction, and Automated scheduling. Companies such as Oracle Corporation, Infosys Limited, IBM Corporation are some of the key innovators in the Market.

Market Growth Factors

Digital transformation and customer experience

Banks are investing substantially in digital transformation to meet changing consumer expectations and remain competitive. API is crucial to this transformation because it enables institutions to provide customers with a seamless omnichannel experience. Through API integration, banks can provide services like real-time balance updates, transaction history, fund transfers, and personalized recommendations throughout multiple channels, such as mobile apps, websites, and other digital touchpoints. In addition, the end-to-end digitalization of services has always posed a challenge for legacy institutions. Banks rely on physical documents for onboarding and Know Your Customer (KYC) checks. Consequently, the growing digitalization of the financial industry would increase API adoption, resulting in market expansion.

Open banking measures

API banking is becoming more popular as a result of open banking legislation like the Revised Payment Services Directive (PSD2) of the European Union and comparable programs in other countries. In order to compete, innovate, and work together with FinTech firms, these regulations require banks to make their customer data as well as payment infrastructure available through APIs. Additionally, API allows FinTech businesses and third-party developers to securely access banking data, create new financial products & services, and provide clients with tailored experiences. Application programming interfaces (APIs) are used by open banking services to perform a secure data transfer of financial information. As a result, these elements have played a vital role in expanding the market.

Market Restraining Factors

Data security and privacy concerns with open banking APIs

Ensuring the security and confidentiality of consumer data and transactions is a significant implementation challenge and risk associated with open banking APIs. Open banking APIs necessitate the disclosure of sensitive and personal data, such as account information, balances, preferences, transactions, and identity, to multiple third-party providers. This increases the data's exposure and susceptibility to potential intrusions, fraud, and abuse. Service providers must implement robust and dependable security measures, such as encryption, authentication, authorization, and monitoring, to protect the data and prevent unauthorized access or alteration. This may impede the growth of the market during the forecast period.

Component Outlook

By component, the market is segmented into solution and service. In 2022, the solution segment held the highest revenue share in the market. This is due to the open banking initiatives mandated by regulators in multiple regions. Open banking requires banks to provide a secure and standardized application programming interface (API) that enables authorized third-party providers to access consumer data and initiate payments.

Deployment Outlook

Based on deployment, the market is fragmented into on-premise and cloud. In 2022, the cloud segment garnered a significant revenue share in the market. This is due to its scalability and adaptability, which enables financial institutions and banks. With API operating on cloud infrastructure, banks can scale their resources up or down in response to fluctuating demand. In addition, cloud-based API banking enables the seamless integration of third-party systems, FinTech applications, and partner platforms.

Enterprise Size Outlook

On the basis of enterprise size, the market is bifurcated into large enterprises and small and medium-sized businesses. In 2022, the large enterprise segment dominated the market with the maximum revenue share. API banking enables large businesses to provide customers with more customized and seamless services. Enterprises can provide a comprehensive and user-friendly experience by integrating with multiple financial and non-financial applications. API banking promotes rapid innovation by enabling collaboration between large enterprises, fintech firms, and other third-party developers.

Regional Outlook

Region wise, the market is analysed across North America, Europe, Asia-Pacific, and LAMEA. In 2022, APAC region covered a considerable revenue share in the market. This is a result of the initiatives taken by regulatory authorities in Asia-Pacific, like the Monetary Authority of Singapore (MAS) and the Reserve Bank of India (RBI), to promote open banking and encourage API usage in the financial sector. These regulations have facilitated the growth of API banking services and increased their market penetration.

The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Google LLC (Alphabet Inc.), BankProv (PROVIDENT BANCORP, INC.), TIBCO (The Information Bus Company) Software. Inc., FidyPay (Jambopay Express Pvt Ltd), Oracle Corporation, Razorpay Software Private Limited, Infosys Limited, IBM Corporation, SAP SE and Salesforce, Inc

Recent Strategies Deployed in API Banking Market

Product Launches and Product Expansions:

Feb-2023: Oracle Corporation announced the launch of new services for demand deposit account processing. These include Oracle Banking Accounts Cloud Service used for account processing using Oracle Coherence Datagrid Infrastructure, Oracle Banking Payments Cloud Service used for account processing using Oracle Coherence Datagrid Infrastructure, and Oracle Banking Enterprise Limits and Collateral Management Cloud Service used for centralizing the collateral management and limits definition process.

Nov-2022: Razorpay Software Private Limited announced the launch of RazorpayX Digital Lending 2.0, a digital lending solution that works in compliance with RBI guidelines. The solution features a full-stack lending suite for automated money transfers.

Apr-2022: IBM Corporation introduced IBM z16, a solution used for analysing transactions. The IBM z16 features IBM Telum Processor used for AI-powered inferencing. The solution has a variety of applications including Loan approvals, AI-powered Clearing and settlement, and centralized retail learning.

Mar-2022: Google LLC introduced Google Cloud Contact Centre AI Platform, an extension to its Contact Centre AI end-to-end solution. The features of the new extension include compatibility with Android and iOS, multiple channel management, AI-driven customer needs prediction, and Automated scheduling.

Jul-2021: Razorpay Software Private Limited Released Mandate HQ, a solution intended to facilitate the financial institutions for enabling recurring payments. The Mandate HQ features integration with different banks and facilitates compliance with RBI guidelines.

Feb-2021: Google LLC unveiled Apigee X, an API management solution. The Apigee X features compatibility with Google’s Cloud Identity Access Management platform and Cloud Armor. In addition, the solution has an integration facility with Google Cloud’s network and security tools.

Partnerships, Collaborations & Agreements:

Aug-2022: BankProv signed a partnership with Fortress Trust, a banking solutions provider, to develop Banking-as-a-Service (BaaS) solutions. The combined expertise of the two companies would provide customers with enterprise-grade offerings.

Jun-2022: BankProv partnered with Etana Trust Company, a digital asset custodian, to establish a connection between digital assets and legacy financial systems. The partnership would allow BankProv to develop banking solutions for the digital and fiat markets.

Jun-2022: IBM Corporation announced a partnership with Atos, a French IT company, to develop cloud adoption solutions for companies in Financial Services Industry. The partnership would provide the customers of the two companies with solutions for cybersecurity in financial transactions.

Apr-2022: FidyPay came into partnership with Yes Bank, a commercial banking company headquartered in India, to develop solutions regarding the digital facilitation of a wide variety of businesses. The partnership expands the geographical footprint of FidyPay.

Mergers & Acquisition:

Mar-2022: Razorpay Software Private Limited acquired Izealiant Technologies, a software company based in India. The acquisition enhances Razorpay’s banking solutions and would allow it to provide its customers with innovative payment banking solutions.

Trials and Approvals:

Jul-2022: Razorpay Software Private Limited received approval from ̉Reserve Bank of India (RBI) for its payment aggregator (PA) license.

Scope of the Study

Market Segments covered in the Report:

By Component

• Solution
• Service

By Deployment

• On-premise
• Cloud

By Enterprise Size

• Large Enterprises
• Small & Medium-sized Enterprises

By Geography

• North America
• US
• Canada
• Mexico
• Rest of North America
• Europe
• Germany
• UK
• France
• Russia
• Spain
• Italy
• Rest of Europe
• Asia Pacific
• China
• Japan
• India
• South Korea
• Singapore
• Malaysia
• Rest of Asia Pacific
• LAMEA
• Brazil
• Argentina
• UAE
• Saudi Arabia
• South Africa
• Nigeria
• Rest of LAMEA

Companies Profiled

• Google LLC (Alphabet Inc.)
• BankProv (PROVIDENT BANCORP, INC.)
• TIBCO (The Information Bus Company) Software. Inc.
• FidyPay (Jambopay Express Pvt Ltd)
• Oracle Corporation
• Razorpay Software Private Limited
• Infosys Limited
• IBM Corporation
• SAP SE
• Salesforce, Inc.

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